SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-K

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                         Commission File No. 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.
   of incorporation or                                              Employer
   organiztion)                                                  Identification
                                                                          No.)

                 P. O. Box 1087, 937 North Pleasantburg Drive
                       Greenville, South Carolina  29602
         (Address of Principal Executive Offices, including zip code)

                                (864) 242-2265
             (Registrant's Telephone Number, Including Area Code)

          Securities Registered Pursuant to Section 12(b) of the Act:
                                     NONE

          Securities Registered Pursuant to Section 12(g) of the Act:
                Title of Class:  COMMON STOCK, $1.00 PAR VALUE

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 if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K is not contained herein, and will not be contained, to the
best  of registrant's knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-K or any amendment to
this  Form  10-K.                    X
                                  -------

The  aggregate  market  value  of  voting  and nonvoting common equity held by
non-affiliates of the Registrant computed by reference to the closing price of
such  stock  as  quoted on the NASDAQ National Market, as of February 28, 1998
was  approximately  $20.3  million.  For purposes of the foregoing calculation
only,  all directors and executive officers of the Registrant have been deemed
affiliates.

As  of  February  28,  1998,  there  were 1,441,510 shares of the Registrant's
Common  Stock,  $1.00  par  value,  outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

(1)          Portions  of the Registrant's Definitive Proxy Statement for 1998
Annual  Meeting  of  Shareholders  is  incorporated  by reference in Part III.

<PAGE>
                                    PART I


NOTE  REGARDING  FORWARD-LOOKING  STATEMENTS
     Summit Financial Corporation's ("the Company") Annual Report on Form 10K,
specifically  certain  of  the statements set forth under "Item 1 - Business",
"Item  7  -  Management's  Discussion  and Analysis of Financial Condition and
Results  of  Operations",  "Item 7A - Quantitative and Qualitative Disclosures
about  Market  Risk",  and  elsewhere  in  this  Form  10K,  and the documents
incorporated  herein  by  reference,  contains  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.  Such forward-looking statements are based
on  current  expectations,  estimates  and  projections  about  the  Company's
industry,  management's  beliefs and certain assumptions made by the Company's
management.    Words  such  as  "anticipates",  "expects", "intends", "plans",
"believes",  "estimates", or variations of such words and similar expressions,
are  intended  to  identify  such  forward-looking  statements.    Readers are
cautioned  that  any  such  forward-looking  statements  are not guarantees of
future  performance  and involve a number of risks and uncertainties, and that
actual  results  could  differ  materially  from  those  indicated  by  such
forward-looking statements.  Important factors that could cause actual results
to  differ  materially from those indicated by such forward-looking statements
include,  but  are not limited to, the following:  (1) that the information is
of a preliminary nature and may be subject to further and/or continuing review
and  adjustment; (2) changes in the financial industry regulatory environment;
(3)  changes  in  the  economy  in  areas  served  by  the  Company  and  its
subsidiaries;  (4)  the  impact  of  competition;  (5)  the  management of the
Company's  operations;  (6)  changes  in  the market interest rate environment
and/or  the  Federal  Reserve's  monetary  policies;  (7) loan prepayments and
deposit  decay rates; and (8) the other risks and uncertainties described from
time  to  time  in  the  Company's  periodic  reports filed with the SEC.  The
Company  disclaims  any  obligation  to update any forward-looking statements.


ITEM  1.          BUSINESS

GENERAL
     Summit  Financial  Corporation (the "Company") was incorporated under the
laws  of  the  State  of  South  Carolina  on  May  26,  1989.  The  Company,
headquartered  in  Greenville,  South  Carolina,  is  a  financial institution
holding company formed under the Bank Holding Company Act of 1956, as amended.
Subsidiaries of the Company are Summit National Bank (the "Bank", "Summit"), a
national  bank  organized  in  1990,  and  Freedom Finance, Inc. (the "Finance
Company",  "Freedom"),  a  consumer  finance  company  organized in 1994.  The
Company  engages  in no significant operations other than the ownership of its
two  subsidiaries.  The Company conducts its business from two banking offices
and  twelve  consumer  finance  offices  throughout  South  Carolina.

     The  Bank targets individuals and small-to-medium-sized businesses in the
Upstate  of  South  Carolina  that  require  a  full  range of quality banking
services  typically  provided by the larger regional banking concerns, but who
prefer  the  personalized service offered by a locally-based institution.  The
Bank  currently  has its headquarters and two full-service branch locations in
Greenville,  South Carolina.  Summit provides a full range of deposit services
that  are  typically available in most banks and savings and loan associations
including  checking  accounts,  NOW  accounts, individual retirement accounts,
savings  and  other  time  deposits  of various types ranging from daily money
market  accounts to longer-term certificates of deposit.  Deposits of the Bank
are  insured  up to $100,000 by the Federal Deposit Insurance Corporation (the
"FDIC").    The  Company  has  no  material concentration of deposits from any
single  customer  or group of customers.  Other services which the Bank offers
include  safe  deposit boxes, bank money orders, wire transfer facilities, and
various  cash  management  and electronic banking programs.  In 1997, the Bank
incorporated  Summit Investment Services, Inc. as a wholly-owned subsidiary to
provide a full range of nondeposit investment products including annuities and
mutual  funds,  full and discount brokerage services, and financial management
services.

     The  Bank also offers a full range of short-to-intermediate-term, secured
and  unsecured  commercial  and personal loans for business, agriculture, real
estate,  home  improvement  and  automobiles, credit cards, letters of credit,
personal investments and home equity lines of credit.  It is the Bank's intent
to  originate quality, profitable loans which will benefit the area's economy,
provide a reasonable return to our shareholders, and promote the growth of the
Bank.    Management  strives  to maintain quality in the loan portfolio and to
accept  only  those credit risks which meet the Bank's underwriting standards.
No  significant portion of the Company's loan portfolio is concentrated within
a  single  industry  or  group  of  related  industries.

     The  Finance  Company makes and services installment loans to individuals
with loan principal amounts generally not exceeding $1,000 and with maturities
ranging  from  three  to  eighteen  months.    The  Finance  Company, which is
headquartered  in  Greenville, South Carolina, currently has 12 branch offices
throughout South Carolina.  The Finance Company's loan customers are primarily
in  the  low-  to-middle  income  brackets  and  are engaged in widely diverse
occupations.   A loan investigation and credit history review is made for each
borrower,  either  through  credit  reporting  agencies or directly by Company
employees.    Freedom  also makes available to borrowers credit life, accident
and health insurance, and property insurance directly related to the extension
of  credit  to  the  individual. The business of the Finance Company is rather
seasonal  and  the  amount of loans outstanding increases significantly at the
end  of  each  calendar  year due to the seasonal loan demand, while the first
quarter  of  the  calendar  year  often  results in substantial loan paydowns.

     With  the  exception  of  the  loans  acquired to expand Freedom's branch
network,  the  Company  has  pursued  a  strategy  of  growth through internal
expansion  since  its  inception.  At December 31, 1997, the Company had total
assets  of  $160.3  million,  total  deposits  of $140.9 million, net loans of
$117.0  million and shareholders' equity of $13.4 million.  This compares with
total assets of $134.2 million, total deposits of $117.8 million, net loans of
$101.2 million and shareholders' equity of $11.6 million at December 31, 1996.

     As  a  bank  holding  company, the Company is a legal entity separate and
distinct  from  its  subsidiaries.    The  Company  coordinates  the financial
resources  of the consolidated enterprise and maintains financial, operational
and  administrative  systems  that  allow centralized evaluation of subsidiary
operations  and  coordination  of  selected  policies  and  activities.    The
Company's  operating revenues and net income are derived from its subsidiaries
through  fees  for  services  performed  and  interest  on advances and loans.

TERRITORY  SERVED  AND  COMPETITION
     THE  BANK:    Summit  National Bank and its subsidiary, Summit Investment
Services,  Inc.,  are  located  in  Greenville,  South Carolina.  The extended
market  area  encompasses  Greenville  County,  with the principal market area
being  the  urban  areas  of Greenville County.  Greenville, South Carolina is
located  in  the  fast growing Interstate-85 corridor between Charlotte, North
Carolina  and  Atlanta,  Georgia.    The  economy  of  Greenville is primarily
industrial in nature and the area is considered one of the Southeast's leading
manufacturing  centers.

     Greenville,  South  Carolina  is  a highly competitive commercial banking
market  in  which  all of the largest banks in the state are represented.  The
competition  among  the  various financial institutions is based upon interest
rates offered on deposit accounts, interest rates charged on loans, credit and
service  charges, the quality of services rendered, the convenience of banking
facilities,  and, in the case of loans to large commercial borrowers, relative
lending  limits.

     Many  of  the competitor banks in the Bank's market area are subsidiaries
of  bank  holding  companies which own banks in other southeastern states.  In
the  conduct  of  certain  areas  of  business, the Bank may also compete with
savings  and loan associations, credit unions, insurance companies, securities
firms,  leasing  companies and other financial institutions, some of which are
not  subject  to  the  same degree of regulation and restrictions as the Bank.
The  Bank  may  also  compete  with  out-of-state financial institutions which
operate  loan  production  offices,  originate  mortgages, accept money market
deposits,  and  provide  other  financial  services.    The  Bank's investment
subsidiary  competes  with  larger  brokerage  houses  and financial planners,
discount  brokers  and  internet  brokerage  service  providers.

     Many  of  these  competitors  have  substantially  greater  resources and
lending  abilities  due to their size than the Bank or its subsidiary have and
these  competitors may offer services, such as international banking and trust
services,  that  the  Bank  is not currently providing.  Moreover, most of the
competitors  have  multiple  branch  networks  located throughout the extended
market area, while the Bank currently has only two locations, which could be a
competitive disadvantage.  As a result, the Bank does not generally attempt to
compete for the banking relationships of larger corporations, but concentrates
its efforts on small and medium-sized businesses and individuals.  The Company
believes  that  the Bank is able to compete effectively in this market segment
by  offering  competitive  pricing  of  services  and  quality, experience and
personal  treatment  in  the  execution  of  services.

     The Bank and its subsidiary are not dependent upon a single or a very few
customers,  the  loss  of  which  would  have  a  material  adverse  effect.

     THE  FINANCE  COMPANY:    Freedom Finance, Inc. serves its customers from
locations  in  Bishopville, Columbia, Conway, Florence, Greenville, Kingstree,
Lake  City,  Manning,  Moncks  Corner, St. George, and Sumter, South Carolina.
Competition  between consumer finance companies is not generally as intense as
that  among  banks, however, this segment of the market has become over-served
in  areas of South Carolina.  Consumer finance companies in the state of South
Carolina are allowed only one outstanding loan per customer and the amounts of
such  loans  are  restricted  by  state  law  according to the type of license
granted by the South Carolina State Board of Financial Institutions.  Numerous
other  finance companies which offer similar types of loans are located in the
areas  served  by  Freedom.

     Although  the  Finance  Company competes directly with national, regional
and  local consumer finance companies, the Company views locally owned finance
companies as its principal competition.  The principal areas of competition in
the  consumer  finance  industry  are  convenience  of  services to customers,
effectiveness of advertising, effectiveness of administration of loans and the
cost  of borrowed money.  Many of the finance companies competing with Freedom
may  have  substantially  greater  resources  and  lending  abilities than the
Finance Company and may have more branches within the specific market areas in
which  they  and  the  Finance Company compete.  The Company believes that the
Finance  Company  is  able  to  compete  effectively  in  its current markets.

EMPLOYEES
     As  of  December  31, 1997, the Company employed a total of two executive
officers.    Additionally,  the  Company  and  its  subsidiaries  employed  67
full-time employees.  Management considers its relations with its employees to
be  good.

SUPERVISION  AND  REGULATION
     GENERAL:    The  Company  and  its subsidiaries are extensively regulated
under  federal  and  state  law.    These  laws  and regulations are primarily
intended  to  protect consumer borrowers and depositors, not shareholders.  To
the  extent  that  the following information describes statutory or regulatory
provisions,  it  is  qualified  in its entirety by reference to the particular
statutes  and  regulations.    Any  change  in  the applicable laws may have a
material  effect  on the business and prospects of the Company.  The operation
of  the  Company  may be affected by legislative and regulatory changes and by
the  monetary policies of various regulatory authorities.  The Federal Reserve
examines  the  Company  and  may  examine  the  Bank  and  Finance  Company.

     THE COMPANY:  The Company is a bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended (the "BHCA"), and as such, is
under  the  supervisory  and regulatory authority of the Board of Governors of
the Federal Reserve System (the "Federal Reserve").  As a bank holding company
registered  under the laws of the South Carolina Bank Holding Company Act, the
Company  is  also  subject  to  regulation  by  the  State  Board of Financial
Institutions.   Thus, the Company is required to file annual reports and other
information  with  the  Federal  Reserve and the South Carolina State Board of
Financial  Institutions  regarding  its  financial  condition,  results  of
operations, management and intercompany relationships and transactions between
the  Company  and  its  subsidiaries.

     Under  the  BHCA,  the Company's activities and those of its subsidiaries
are  limited to banking, managing or controlling banks, furnishing services to
or  performing services for its subsidiaries or engaging in any other activity
that  the  Federal  Reserve  determines to be so closely related to banking or
managing  or  controlling banks as to be a proper incident thereto.  In making
such  determinations,  the Federal Reserve is required to consider whether the
performance  of  such activities by a bank holding company or its subsidiaries
can  reasonably be expected to produce benefits to the public, such as greater
convenience  and  increased  competition or gains in efficiency, that outweigh
possible  adverse effects, such as undue concentration of resources, decreased
or  unfair  competition,  conflicts  of interest or unsound banking practices.
The  BHCA requires prior Federal Reserve approval for, among other things, the
acquisition  by  a  bank  holding  company  of direct or indirect ownership or
control  of  more  than  5%  of  the voting shares or substantially all of the
assets of any bank, or for a merger or consolidation of a bank holding company
with  another  bank  holding  company.

     Under  the  policy  of  the  Federal Reserve with respect to bank holding
company operations, a bank holding company is required to serve as a source of
financial  strength  to  its  subsidiary depository institutions and to commit
resources  to support such institutions in circumstances where it might not do
so  absent such policy.  The Federal Deposit Insurance Corporation Improvement
Act  of  1991  ("FDICIA"), requires that a bank holding company guarantee that
any  "undercapitalized"  (as  defined  in  the  statute)  insured  depository
institution  subsidiary  will comply with the terms of any capital restoration
plan  filed  by such subsidiary with its appropriate federal banking agency up
to  the  lesser of (i) an amount equal to 5% of the institution's total assets
at  the  time the institution became undercapitalized, or (ii) the amount that
is  necessary (or would be necessary) to bring the institution into compliance
with  all applicable capital standards as of the time the institution fails to
comply  with  such  capital  restoration  plan.

     Under  Section 5(e) of the BHCA, the Federal Reserve has the authority to
terminate  any  activity  of a bank holding company that constitutes a serious
risk  to  the  financial  soundness  or stability of any subsidiary depository
institution  or  to terminate its control of such subsidiary.  Further, FDICIA
grants  federal bank regulatory authorities additional discretion to require a
bank holding company to devest itself of any bank or nonbank subsidiary if the
agency  determines  that  divesture  may  aid  the  depository  institution's
financial  condition.

     In  July  1996,  South  Carolina  enacted  the South Carolina Banking and
Branching  Efficiency Act (the "Act") which provides that, except as otherwise
expressly  permitted  by federal law and in limited circumstances specified in
the  Act,  a company may not acquire a South Carolina bank holding company (as
defined  in  the  Act)  or  a  bank chartered under the laws of South Carolina
unless  the  company  obtains  prior approval for the State Board of Financial
Institutions  (the  "State  Board").    The  company  proposing  to  make  the
acquisition  must  file  with the State Board a notice or application that the
company filed with the responsible federal bank supervisory agency and pay the
fee,  if  any,  prescribed  by the State Board.  In addition, the company must
publish  prior  notice of the application once in a daily newspaper of general
circulation  in  South Carolina and provide an opportunity for public comment.
If  the  company  proposing  to  make  the acquisition is an out-of-state bank
holding  company,  it must qualify to do business in South Carolina or appoint
an agent for service of process in South Carolina.  The Act also provides that
approval  of the State Board must be obtained before an interstate bank merger
involving  a  South  Carolina  bank  may  be  consummated.

     The  passage  of  the  Riegle-Neal  Interstate  Banking  and  Branching
Efficiency  Act  of  1994 (the "Riegle-Neal Act") has increased the ability of
bank  holding  companies  and  banks to operate across state lines.  Under the
Riegle-Neal  Act,  with  the approval of the Board of Governors of the Federal
Reserve  System, and subject to nationwide and statewide concentration limits,
the  Company  and any other bank holding company located in South Carolina may
acquire  a  bank located in any other state and a bank holding company located
outside  of South Carolina may acquire any South Carolina-based bank, provided
the  acquirer  is adequately capitalized and adequately managed, as defined in
the  Riegle-Neal  Act.

     The  Company  is  an  "affiliate"  of  the Bank within the meaning of the
Federal  Reserve  Act,  which imposes restrictions on loans by the Bank to the
Company, on investments by the Bank in the stock or securities of the Company,
and on the use of such stock or securities as collateral for loans by the Bank
to  any  borrower.  The Company and the Bank are subject to Section 23A of the
Federal  Reserve  Act.    Section  23A  defines  "covered transactions", which
includes  extensions  of credit, and limits a bank's covered transactions with
any  affiliate  to  10%  of  such  bank's  capital  and  surplus.  All covered
transactions  with  all  affiliates  cannot  in  the aggregate exceed 20% of a
bank's  capital  and  surplus.   All covered and exempt transactions between a
bank  and  its affiliates must be on terms and conditions consistent with safe
and  sound  banking practices, and banks and their subsidiaries are prohibited
from  purchasing  low-quality  assets  from  the  bank's affiliates.  Finally,
Section 23A requires that all of a bank's extensions of credit to an affiliate
be  appropriately secured by acceptable and adequate collateral, as defined in
the  regulation.   The Company and the Bank are also subject to Section 23B of
the Federal Reserve Act, which generally limits covered and other transactions
among  affiliates to terms and circumstances, including credit standards, that
are substantially the same or at least as favorable to a bank holding company,
a  bank  or  a subsidiary of either as prevailing at the time for transactions
with  unaffiliated  companies.

     THE  BANK:    The  Company's  subsidiary bank, Summit National Bank, is a
nationally chartered financial institution, and as such, is subject to various
statutory  requirements,  supervision  and  regulation,  of which regular bank
examinations  are  a part, promulgated and enforced primarily by the Office of
the  Comptroller  of  the Currency (the "Comptroller").  These statutes, rules
and  regulations relate to insurance of deposits, required reserves, allowable
investments,  loans,  mergers, consolidations, issuance of securities, payment
of  dividends, establishment of branches, and other aspects of the business of
Summit  National  Bank.

     The Comptroller is responsible for overseeing the affairs of all national
banks  and  periodically examines national banks to determine their compliance
with  law  and  regulations.  The Comptroller monitors all areas of the Bank's
operations,  including  loans,  mortgages,  issuance  of  securities,  capital
adequacy,  risk  management,  payment  of  dividends,  and  establishment  of
branches.    In  addition,  the  Comptroller  has authority to issue cease and
desist  orders  against  national banks which are engaged in unsafe or unsound
practice in the conduct of their business.  Federal banking laws applicable to
all  depository financial institutions, among other things, (i) afford federal
bank  regulatory  agencies  with  powers to prevent unsafe and unsound banking
practices;  (ii)  restrict preferential loans by banks to "insiders" of banks;
(iii)  require  banks  to  keep information on loans to major shareholders and
executive  officers,  and  (iv)  bar  certain  director and officer interlocks
between  financial  institutions.

     The Comptroller also administers a number of federal statutes which apply
to  national  banks  such  as the Depository Institution Management Interlocks
Act,  the  International  Lending  Supervision  Act  of 1983 and the Community
Reinvestment Act of 1977 ("CRA").  CRA requires that, in connection with their
examinations  of  financial  institutions,  the Comptroller shall evaluate the
record  of  the  Bank  in  meeting  the  credit  needs of the local community,
including  low and moderate income neighborhoods, consistent with the safe and
sound  operation of the Bank.  These factors are also considered in evaluating
mergers,  acquisitions,  and  applications  to  open  a  branch facility.  The
federal  banking  agencies, including the Comptroller, issued a new joint rule
which  became  effective  for  the  Bank  in  1997  related  to  evaluating an
institution's  CRA  performance.  The new rule evaluates institutions based on
their  actual  performance  (rather  than efforts) in meeting community credit
needs.    Subject  to  certain  exceptions,  the  Comptroller assesses the CRA
performance of a bank by applying lending, investment, and service tests.  The
Comptroller  assigns  a rating to a bank based on the bank's performance under
the  tests.    To evaluate compliance with the lending, investment and service
tests,  subject  to  certain exceptions, banks will be required to collect and
report  to  the  Comptroller  extensive  demographic  and  loan  data.  Summit
National  Bank  received  a  satisfactory  rating  in  its  most  recent  CRA
examination.

     The  Bank  is  also  a  member  of  the FDIC, which currently insures the
deposits of each member bank to a maximum of $100,000 per depositor.  For this
protection, each bank pays a semiannual statutory assessment and is subject to
the  rules  and  regulations  of the FDIC.  Further, the FDIC is authorized to
impose  one  or  more  special  assessments  in any amount deemed necessary to
enable  repayment  of  amounts  borrowed  by  the  FDIC from the United Stated
Department  of  the Treasury.  The FDIC has broad authority to prohibit Summit
National  Bank  from  engaging  in unsafe or unsound banking practices and may
remove  or  suspend  officers or directors of a bank to protect its soundness.
The  FDIC  requires  insured  banks  to  maintain specified levels of capital,
maintain certain security devices and procedures and to file quarterly reports
and  other  information  regarding  its  operations.

     Effective  January  1, 1996, the FDIC implemented a risk-based assessment
schedule,  having  assessments ranging from 0.00% to 0.27% of an institution's
average  assessment  base.    The  actual  assessment  to  be  paid  by  each
FDIC-insured  institution  is  based  on  the  institution's  assessment  risk
classification,  which  is  determined  based  on  whether  the institution is
considered  "well  capitalized",  "adequately  capitalized",  or
"undercapitalized",  as  terms  have  been  defined  in  applicable  federal
regulations  adopted  to  implement the prompt corrective action provisions of
the  Federal  Deposit  Insurance  Corporation  Improvement Act ("FDICIA"), and
whether  such  institution  is  considered  by  its  supervisory  agency to be
financially  sound  or  to  have supervisory concerns.  In addition, effective
January  1,  1997,  the  Deposit Insurance Funds Act of 1996 (the "Funds Act")
implemented  a  separate  Financing Corporation ("FICO") assessment to service
the  interest  on  its  bond obligation from the Savings Association Insurance
Fund  ("SAIF") assessment resulting from the Fund Act.  The amount assessed on
individual institutions by the FICO will be in addition to the amount paid for
deposit  insurance  according to the FDIC's risk-related assessment schedules.
FICO  assessment rates for the first semiannual period of 1997 are set at 1.30
basis  points  annually  for  Bank Insurance Fund ("BIF") assessable deposits.
These  rates  may be adjusted quarterly to reflect changes in assessment bases
for  the  BIF  and SAIF.  Based on the Bank's current financial condition, the
current  FDIC  assessment  rate for the Bank is at the lowest available level.

     FDICIA,  which  became effective December 19, 1991, contains broad powers
for  federal  banking  regulators  to take certain enforcement actions against
problem  institutions  as  well  as  imposing  significant  restrictions  on
undercapitalized  financial  institutions,  including  establishing  a
capital-based  supervisory system for prompt corrective action ("PCA").  Under
the  PCA provisions, regulatory agencies can require submission and funding of
a capital restoration plan by an undercapitalized institution, place limits on
its  activities, require the raising of additional capital, and can ultimately
require  the  appointment  of  a conservator or receivor of the institution if
deemed  necessary  and  prudent  by  the  regulatory  agency.

     FDICIA  also  makes some changes to the deposit insurance coverage rules;
limits the use of brokered deposits by certain banks; establishes a risk-based
deposit insurance premium system; provides pass-through protection for certain
types  of  pension plans; and mandates the promulgation of uniform regulations
that  establish  standards  for  real estate lending.  The enacted legislation
includes  the  Truth  in  Savings  Act;  imposes  new  accounting,  audit  and
examination  requirements  for  banks  with  assets greater than $150 million;
revises  existing  and imposes new provisions with regard to transactions with
insiders;  and  authorizes  certain bank and thrift cross-industry mergers and
acquisitions.

     In  conjunction  with  the FDICIA, in September 1992, the Federal Reserve
Board  approved  a  final  rule  which  establishes  the  capital  levels that
determine  a  bank's  PCA  capital  category.    Under the final capital level
definitions,  the  Bank  is  currently in the "well-capitalized" category.  In
December  1992,  a  final  rule  was  issued  requiring  insured  depository
institutions  to  develop  and  implement  internal procedures to evaluate and
control  both  credit  and  settlement exposure to financial institutions with
which  they  do  business.

     During 1994, the Comptroller issued new regulations including (1) a final
rule  increasing  the  threshold  level  for  the requirement of appraisals on
commercial  real  estate  loans to properties securing loans totaling at least
$250,000  and  other  amendments  to  appraisal requirements effective June 7,
1994;  (2) new examination procedures for "noncomplex" banks effective October
1, 1994; and (3) guidelines for financial derivatives, specifically addressing
the  various  risks  associated  with  such.

     In  June 1995, the FDIC approved a final rule to implement the portion of
Section  305  of  FDICIA  that  requires  regulators  to revise the risk-based
capital  standards  to ensure that they take adequate account of interest rate
risk.  An exemption from the reporting requirement is offered to banks meeting
certain  size  and  risk  profile  criteria.

     Interest  and  certain  other  charges collected or contracted for by the
Bank  is  subject  to  state  usury  laws  and certain federal laws concerning
interest  rates.    The  Bank's operations are also subject to certain federal
laws  applicable  to credit transactions, such as the federal Truth-In-Lending
Act governing disclosures of credit terms to consumer borrowers; CRA requiring
financial  institutions  to  meet  their  obligations to provide for the total
credit  needs  of  the  community;  the  Home  Mortgage Disclosure Act of 1975
requiring  financial  institutions to provide information to enable the public
to determine whether it is fulfilling its obligation to meet the housing needs
of  the  community  it  serves;  the  Equal Credit Opportunity Act prohibiting
discrimination  on  the  basis  of race, creed, or other prohibited factors in
extending  credit; the Fair Credit Reporting Act of 1978 governing the use and
provisions  of  information  to  credit  reporting  agencies;  the  Fair  Debt
Collection  Act governing the manner in which consumer debts may be collected;
and the rules and regulations of the various federal agencies charged with the
responsibility  of  implementing  such  federal  laws.

     The  deposit  operations  of  the  Bank  are also subject to the Right to
Financial  Privacy  Act  which  imposes  a duty to maintain confidentiality of
consumer  financial  records  and  prescribes  procedures  for  complying with
administrative  subpoenas  of  financial  records,  and  the  Electronic Funds
Transfer  Act and Regulation E issued by the Federal Reserve to implement that
act  which governs automatic deposits to and withdrawals from deposit accounts
and customers' rights and liabilities arising from the use of automated teller
machines  and  other  electronic  banking  services.

     THE  FINANCE  COMPANY:  The Company's subsidiary finance company, Freedom
Finance,  Inc., is a consumer finance company licensed by and regulated by the
State  Board  of  Financial Institutions for South Carolina.  Accordingly, the
Finance  Company  is  subject  to  annual  examinations by the State Board and
various  regulatory  requirements,  including annual reporting, annual license
renewal, limitations of one loan per customer and other regulations pertaining
to the extension of credit.  Specifically, state laws and regulations apply to
maximum  loan  amounts,  terms,  interest  rates and credit insurance charges.
These  laws  and regulations are subject to both repeal and revision from time
to  time,  often  in  response to pressures exerted by consumer rights groups.

     Effective  January  1,  1996,  South Carolina Senate Bill 602 imposed new
regulations  related  to  additional  reporting  requirements,  limits on loan
renewals,  elimination  of  nonrefundable  charges  on  loans  exceeding $150,
adjustment of credit life insurance rates, and certain adjustments in interest
rates  on  loans in excess of $150.  Senate Bill 602 also includes a provision
for  mandatory  reviews  of  the  effect  of  the  new  regulations.

CAPITAL  REQUIREMENTS
     Pursuant  to  the general supervisory authority conferred by the BHCA and
the directives set forth in the International Lending Supervision Act of 1983,
the  Federal  Reserve and Comptroller have adopted risk-based capital adequacy
guidelines for banks and bank holding companies subject to their regulation as
a means for determining the adequacy of capital based on the risks inherent in
carrying  various  classes  of assets and off-balance sheet items.  Failure to
meet  minimum capital requirements can initiate certain mandatory and possibly
additional discretionary actions by regulators that, if undertaken, could have
a  material  effect  on  the  financial  statements.    Under capital adequacy
guidelines  and  the  regulatory  framework  for prompt corrective action, the
Company  and  the  Bank  must  meet  specific  capital guidelines that involve
quantitative  measures of the Company's and the Bank's assets, liabilities and
certain  off-balance  sheet  items  as  calculated under regulatory accounting
practices.    The  Company's and the Bank's capital amounts and classification
are  also subject to qualitative judgments by the regulators about components,
risk  weightings,  and  other  factors.

     Quantitative  measures  established  by  regulation  to  ensure  capital
adequacy  require  the  Company  and  the Bank to maintain minimum amounts and
ratios  of  total  and  Tier  I  capital  (as  defined  in  the regulation) to
risk-weighted  assets  (as defined) and to total assets.  Management believes,
as  of  December  31,  1997,  that  the  Company and the Bank meet all capital
adequacy  requirements  to  which  they are subject.  At December 31, 1997 and
1996,  the  Company  and  the  Bank are both categorized as "well capitalized"
under  the  regulatory  framework  for  prompt  corrective  action.    To  be
categorized  as  "well  capitalized",  the  Company and the Bank must maintain
minimum total risk-based, Tier I risk-based and Tier I leverage ratios.  There
are  no current conditions or events that management believes would change the
Company's  or  the  Bank's  category.

     The  Company's  and  the  Bank's  actual  capital  amounts  and ratios at
December  31, 1997 and 1996 as well as the minimum calculated amounts for each
regulatory defined category are included in this report under Part II, Item 8.
"Financial  Statements  and  Supplemental  Data"  as  Note  16 to the Notes to
Consolidated  Financial  Statements.

MONETARY  POLICY
     The  earnings  of  the  Company  and it's bank subsidiary may be affected
significantly  by  the  monetary  policies  of the Federal Reserve Board which
regulates  the money supply in order to mitigate recessionary and inflationary
pressures.    Among the techniques used to implement these objectives are open
market operations in United States Government securities, changes in the rates
paid  by banks on bank borrowings, changes in the reserve requirements against
bank  deposits  and  limitations on interest rates which banks may pay on time
and  savings  deposits.   These techniques are used in varying combinations to
influence  overall  growth  and  distribution  of  bank loans, investments and
deposits,  and  their  use  may also affect interest rates charged on loans or
paid  on  deposits.

DIVIDENDS
     The  holders  of  the Company's common stock are entitled to receive cash
dividends  when  and  if  declared  by the Board of Directors out of the funds
legally  available  therefor.    The  Company  is  a legal entity separate and
distinct  from  its  subsidiaries  and  depends  in  large part for its income
available  to distribute to shareholders on the payment of cash dividends from
its  subsidiaries.    While  the  Company  is  not  presently  subject  to any
regulatory  restrictions  on dividends, the Bank is subject to such regulatory
cash  dividend  restrictions.

     Specifically,  approval  of  the  Comptroller  of  the  Currency  will be
required  for  any  cash dividend to be paid to the Company by the Bank if the
total of all cash dividends, including any proposed cash dividend, declared by
the  Bank  in  any calendar year exceeds the total of its net profits for that
year  combined with its retained net profits for the preceding two years, less
any  required  transfers  to  surplus.    Additionally,  the National Bank Act
provides that a national bank cannot pay cash dividends or other distributions
to  shareholders  out  of  any  portion of its common stock or preferred stock
accounts  and that a bank shall pay no cash dividend in an amount greater than
its net profits then on hand, after deduction of its losses and bad debts.  As
of  December  31,  1997,  no  cash dividends have been declared or paid by the
Bank.   At December 31, 1997, the Bank had available retained earnings of $3.3
million.

     The  Company  has  issued  stock  distributions  to its shareholders.  On
November  17,  1997,  the  Board  of Directors approved the Company's sixth 5%
stock  distribution  which  was issued on December 30, 1997 to shareholders of
record as of December 15, 1997.  This distribution resulted in the issuance of
68,296  shares  of  the  Company's  $1.00  par  value  common  stock.

SELECTED  STATISTICAL  FINANCIAL  INFORMATION
     The  Company,  through the operations of the Bank, offers a wide range of
financial related services to individual and corporate customers.  The Bank is
subject  to  competition  from other financial institutions.  The Bank is also
subject  to the regulations of certain federal agencies and undergoes periodic
examinations  by  those  regulatory  authorities.   The Company has no foreign
operations.

     The  consolidated  financial  statements  of  the Company are prepared in
conformity  with  generally  accepted accounting principles.  In preparing the
consolidated  financial  statements,  management is required to make estimates
and  assumptions that affect the reported amounts of assets and liabilities as
of the date of the balance sheet and revenues and expenses for the period. The
consolidated  selected  statistical  financial  data provided on the following
pages  presents  a  more detailed review of the Company's business activities.

NET  INTEREST  INCOME  ANALYSIS
-------------------------------
     Net interest income, the difference between the interest earned on assets
and  the  interest  paid  for liabilities used to support those assets, is the
principal  source  of the Company's operating income.  Net interest income was
$7.0  million,  $5.6  million,  and  $4.0  million  for  1997, 1996, and 1995,
respectively.    The  Company's  average  interest rate spread, the difference
between  the  average  interest rate earned on interest-earning assets and the
average interest paid on interest-bearing liabilities, has increased in recent
years  because  of  the Company's balance sheet structure and the increases in
rates on interest-earning assets.  The increase in net interest income in 1997
is  directly related to the increase in the average loan and deposit volume of
the  Bank of 25% and 24%, respectively.  Net interest income increased in 1996
also  related  to the higher average loan and deposit volume of the Bank which
was  up  from  1995  by  33%  and  32%,  respectively.

     For  the  year ended December 31, 1997, the Company's net interest margin
was  4.94%,  compared  to  4.81% in 1996 and 4.41% for 1995.  The net interest
margin is calculated as net interest income divided by average earning assets.
The  increase  in  1997  is  primarily  related  to  the  general  rising rate
environment  experienced  as  the  prime rate increased from 8.25% to 8.50% in
March  1997.    Although the prime rate dropped during 1995 and into 1996, the
increase  in  the  net  interest  margin  between  1995 and 1996 was primarily
related  to  the contribution of the higher level of Finance Company loans and
increases  in  Freedom's  margin  during  1996.

     The Company believes it has emphasized proper management of interest rate
spreads  to  offset  the  higher cost of deposits recently realized due to the
Bank's  loan  demand  and  competition  in  the Bank's primary marketplace for
deposits.    The  Company  manages  interest  rate  spreads  by monitoring the
maturity  of  assets  and  related liabilities, interest rates, risk exposure,
liquidity,  funding  sources,  and  capital  resources.  The objective of such
monitoring is to maximize net interest income over an extended period of time,
while  maintaining  associated  risk  within  prescribed  policy  limits.

     The  following table presents the average balances, the average yield and
the  interest  income  earned on interest-earning assets, and the average rate
and  the  interest  paid  or  accrued  on  interest-bearing liabilities of the
Company  for  the  last three years.  Also presented is the average yields and
rates for interest-earning assets and interest-bearing liabilities at December
31,  1997.    Tabular presentation of all average statistical data is based on
daily  averages.




<TABLE>
<CAPTION>


                                    AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS
                                                  (DOLLARS IN THOUSANDS)


                                                        1997      1997     1997      1996     1996      1996     1995
                                            Average    -----    --------   -----     -----   --------   -----    -----
                                          Yield/Rate   Average   Income/   Yield/   Average   Income/   Yield/   Average
                                           12/31/97    Balance   Expense    Rate    Balance   Expense    Rate    Balance
                                          -----------  -------   --------  ------   --------  --------  ------   -------
<S>                                       <C>          <C>       <C>       <C>      <C>       <C>       <C>      <C>
ASSETS
Earning Assets:
Loans (net of unearned income) . . . . .       10.30%  $110,812  $ 11,491   10.37%  $ 88,481  $  8,924   10.04%  $ 66,451
  (1)
Investment securities (taxable). . . . .        6.35%    18,597     1,173    6.31%    20,641     1,241    6.01%    17,212
Investment securities. . . . . . . . . .        7.11%     2,705       135    7.56%       589        29    7.08%         -
 (non-taxable) (2)
Investment in stock (3). . . . . . . . .        6.07%       685        45    6.57%       600        39    6.47%       510
Federal funds sold . . . . . . . . . . .        5.55%     7,542       410    5.44%     3,834       207    5.41%     3,787
Interest-bearing deposits with . . . . .        5.66%     2,220       127    5.72%     1,892       107    5.64%     2,158
 banks                                    -----------   -------  --------  -------   -------  --------  -------   -------
     Total earning assets. . . . . . . .        9.41%   142,561  $ 13,381    9.43%   116,037  $ 10,547    9.05%    90,118
                                          ===========            ========  =======            ========  =======
Non-earning assets                                        7,101                        5,960                        5,168
                                                       --------                     --------                     --------
     Total average assets                              $149,662                     $121,997                     $ 95,286
                                                       ========                     ========                     ========
LIABILITIES & SHARE-
HOLDERS' EQUITY
Liabilities:
Interest-bearing deposits:
  Interest checking. . . . . . . . . . .        2.32%  $  6,793  $    171    2.52%  $  5,383  $    118    2.19%  $  4,148
  Savings. . . . . . . . . . . . . . . .        2.82%     1,532        43    2.81%     1,635        47    2.86%     1,535
  Money market accounts. . . . . . . . .        4.76%    31,873     1,451    4.55%    23,843       987    4.14%    18,338
  Time deposits > $100M. . . . . . . . .        5.85%    27,872     1,616    5.80%    22,566     1,279    5.67%    16,795
  Other time deposits. . . . . . . . . .        5.91%    48,958     2,859    5.84%    40,673     2,322    5.71%    29,939
                                          -----------  --------  --------  -------  --------  --------  -------  --------
     Total interest-bearing deposits . .        5.34%   117,028     6,140    5.25%    94,100     4,753    5.05%    70,754
Securities sold under repurchase . . . .        5.42%       789        42    5.38%     1,398        73    5.20%       916
  agreements and federal funds
   purchased
Other borrowings . . . . . . . . . . . .        6.69%     3,383       222    6.53%     2,041       138    6.78%     2,000
                                          -----------  --------  --------  -------  --------  --------  -------  --------
     Total interest-bearing liabilities.        5.37%   121,200  $  6,404    5.28%    97,539  $  4,964    5.09%    73,670
                                          ===========            ========  =======            ========  =======
Non-interest bearing liabilities:
  Non-interest bearing deposits                          14,222                       12,263                        9,916
  Other non-interest bearing                              1,740                        1,148                        1,414
liabilities                                            --------                     --------                     --------
     Total liabilities                                  137,162                      110,950                       85,000
Shareholders' equity                                     12,500                       11,047                       10,286
                                                       --------                     --------                     --------
     Total average liabilities                         $149,662                     $121,997                     $ 95,286
 and equity                                            ========                     ========                     ========
Net interest margin (4)                                          $  6,977    4.94%            $  5,583    4.81%
                                                                 ========  =======            ========  =======
Interest rate spread (5)                                                     4.15%                        3.96%
                                                                           =======                      =======


                                            1995      1995
                                          --------   -----
                                          Income/    Yield/
                                          Expense     Rate
                                          --------   ------
<S>                                       <C>       <C>
ASSETS
Earning Assets:
Loans (net of unearned income) . . . . .  $  6,410    9.64%
  (1)
Investment securities (taxable). . . . .       953    5.54%
Investment securities. . . . . . . . . .         -       -
 (non-taxable) (2)
Investment in stock (3). . . . . . . . .        32    6.33%
Federal funds sold . . . . . . . . . . .       219    5.77%
Interest-bearing deposits with . . . . .       122    5.64%
 banks                                    --------  -------
     Total earning assets. . . . . . . .  $  7,736    8.58%
                                          ========  =======
Non-earning assets

     Total average assets

LIABILITIES & SHARE-
HOLDERS' EQUITY
Liabilities:
Interest-bearing deposits:
  Interest checking. . . . . . . . . . .  $    103    2.48%
  Savings. . . . . . . . . . . . . . . .        48    3.12%
  Money market accounts. . . . . . . . .       751    4.09%
  Time deposits > $100M. . . . . . . . .       987    5.88%
  Other time deposits. . . . . . . . . .     1,686    5.63%
                                          --------  -------
     Total interest-bearing deposits . .     3,575    5.05%
Securities sold under repurchase . . . .        53    5.79%
  agreements and federal funds
   purchased
Other borrowings . . . . . . . . . . . .       132    6.59%
                                          --------  -------
     Total interest-bearing liabilities.  $  3,760    5.10%
                                          ========  =======
Non-interest bearing liabilities:
  Non-interest bearing deposits
  Other non-interest bearing
liabilities
     Total liabilities
Shareholders' equity

     Total average liabilities
 and equity
Net interest margin (4). . . . . . . . .  $  3,976    4.41%
                                          ========  =======
Interest rate spread (5)                              3.48%
                                                    =======
<FN>

(1)    -   Includes  loans  on  nonaccrual  status.
(2)  -     Yields on nontaxable investment securities have been adjusted to a tax equivalent
basis assuming a 34% Federal
tax  rate.
(3)    -   Includes  investments  in  stock  of  Federal Reserve Bank, Federal Home
Loan Bank, and other equities.
(4)    -   Net interest margin is computed by dividing net interest income by total
average interest-earning assets.
(5)    -   Interest rate spread is the difference between the average yield on
interest-earning assets and the average
rate  on  interest-bearing  liabilities.
</TABLE>


ANALYSIS  OF  CHANGES  IN  INTEREST  DIFFERENTIAL
 -------------------------------------------------
     Net  interest  income  ("NII")  is  affected  by  changes  in the average
interest  rate earned on interest-earning assets and the average interest rate
paid  on  interest-bearing  liabilities.   In addition, net interest income is
affected  by  changes  in  the  volume  of  interest-earning  assets  and
interest-bearing  liabilities.    The  following  table  sets forth the dollar
amount  of  increase  in  interest  income and interest expense resulting from
changes  in  the  volume  of  interest-earning  assets  and  interest-bearing
liabilities  and  from  changes in yields and rates.  For the purposes of this
table,  changes  which are not solely attributable to volume or rate have been
attributed  to  rate.

<TABLE>
<CAPTION>

                                       VOLUME AND RATE VARIANCE ANALYSIS
                                            (DOLLARS IN THOUSANDS)


                                                        1996 - 1997                      1995 - 1996
                                              -----------------------------      ---------------------------

                                                 Change               Total       Change               Total
                                               Related to             Change    Related to             Change
                                                                      in NII                           in NII
                                                 Volume       Rate                Volume       Rate
                                              -------------  ------  --------  -------------  ------  --------
<S>                                           <C>            <C>     <C>       <C>            <C>     <C>
Earning assets:
Loans (net of unearned income) . . . . . . .  $      2,242   $ 325   $ 2,567   $      2,075   $ 439   $ 2,514
Investment securities (taxable). . . . . . .          (122)     54       (68)           190      98       288
Investment securities (non-taxable). . . . .           149     (43)      106             29       -        29
Investment in stock. . . . . . . . . . . . .             5       1         6              6       1         7
Federal funds sold . . . . . . . . . . . . .           200       3       203              3     (15)      (12)
Interest-bearing deposits with banks . . . .            18       2        20            (15)      -       (15)
                                              -------------  ------  --------  -------------  ------  --------
Total interest income. . . . . . . . . . . .         2,492     342     2,834          2,288     523     2,811
                                              -------------  ------  --------  -------------  ------  --------
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking. . . . . . . . . . . . . .            31      22        53             31     (16)       15
Savings. . . . . . . . . . . . . . . . . . .            (3)     (1)       (4)             3      (4)       (1)
Money market accounts. . . . . . . . . . . .           332     132       464            225      11       236
Time deposits > $100M. . . . . . . . . . . .           300      37       337            339     (47)      292
Other time deposits. . . . . . . . . . . . .           473      64       537            604      32       636
                                              -------------  ------  --------  -------------  ------  --------
Total interest-bearing deposits. . . . . . .         1,133     254     1,387          1,202     (24)    1,178
Securities sold under repurchase agreements.           (32)      1       (31)            28      (8)       20
  and federal funds purchased
Other borrowed funds . . . . . . . . . . . .            91      (7)       84              3       3         6
                                              -------------  ------  --------  -------------  ------  --------
Total interest expense . . . . . . . . . . .         1,192     248     1,440          1,233     (29)    1,204
                                              -------------  ------  --------  -------------  ------  --------
Net interest differential. . . . . . . . . .  $      1,300   $  94   $ 1,394   $      1,055   $ 552   $ 1,607
                                              =============  ======  ========  =============  ======  ========
</TABLE>



INTEREST  RATE  SENSITIVITY  ANALYSIS
-------------------------------------
     An important aspect of achieving satisfactory levels of net income is the
management  of  the  composition  and  maturities of rate sensitive assets and
liabilities  in order to optimize net interest income as interest rates earned
on  assets  and paid on liabilities fluctuate from time to time.  The interest
sensitivity gap (the "gap") is the difference between total interest sensitive
assets and liabilities in a given time period.  The gap provides an indication
of  the  extent  to which the Company's net interest income may be affected by
interest  rate  movements.

     The  objective  of  interest  sensitivity  management  is  to  maintain
reasonably  stable  growth  in  net  interest income despite changes in market
interest  rates by maintaining the proper mix of interest sensitive assets and
liabilities.    Management  seeks  to  maintain  a general equilibrium between
interest  sensitive  assets  and liabilities in order to insulate net interest
income  from  significant  adverse  changes  in  market  rates.

     At  December  31,  1997,  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 end of 1997 of $19.2 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
64%  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.

     An  asset  sensitive  position  means  that  the Company's 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.  Interest rates dropped starting in July 1995 and into
1996,  and  the Bank's net interest margin did decline in 1996 as the yield on
loans which are tied to the prime rate dropped immediately, while the majority
of liabilities did not reprice until their fixed maturity dates.  However, the
Company's  overall  interest  margin  increased  in 1996 due to the fixed rate
loans of the Finance Company offsetting the decline at the Bank.  In 1997, the
market  experienced  an  increase  in the prime rate which was apparent in the
higher  net  interest  margin  the Company reported in 1997 as compared to the
prior  year.

     The  following  table presents a measure, in a number of time frames, the
interest  sensitivity  gap  by subtracting interest-sensitive liabilities from
interest-sensitive  assets.

<TABLE>
<CAPTION>

                              INTEREST SENSITIVITY ANALYSIS
                                 (DOLLARS IN THOUSANDS)

                                                As of December 31, 1997
                                        Assets and Liabilities Repricing Within
                                       -----------------------------------------
                                       3 Months    4 to 12    1 to 5   Over 5    Total
                                        or Less     Months     Years    Years
                                       ---------  ----------  -------  -------  -------
<S>                                    <C>        <C>         <C>      <C>      <C>
Interest-earning assets:
Loans (net of unearned income). . . .  $  77,134  $   5,752   $33,549  $ 2,320  $118,755
Investments  (1). . . . . . . . . . .      2,906      4,207     9,079   12,729    28,921
Federal funds sold. . . . . . . . . .      2,920          -         -        -     2,920
Interest-bearing deposits with banks.        704                    -        -       704
                                       ---------   ---------  -------  -------  --------
   Total. . . . . . . . . . . . . . .     83,664      9,959    42,628   15,049   151,300
                                       ---------  ----------  -------  -------  --------
Interest-bearing liabilities:
Demand deposits  (2). . . . . . . . .     43,604          -         -        -    43,604
Time deposits > $100M . . . . . . . .     16,178     10,970     2,347        -    29,495
Other time deposits . . . . . . . . .     14,857     23,389    11,904        -    50,150
Other interest-bearing liabilities. .      3,803          -         -        -     3,803
                                       ---------  ----------  -------  -------  --------
   Total. . . . . . . . . . . . . . .     78,442     34,359    14,251        -   127,052
                                       ---------  ----------  -------  -------  --------
Period interest-sensitivity gap . . .  $   5,222   ($24,400)  $28,377  $15,049  $ 24,248
                                       =========  ==========  =======  =======  ========
Cumulative interest-sensitivity gap .  $   5,222   ($19,178)  $ 9,199  $24,248
                                       =========  ==========  =======  =======
<FN>

(1)    -  Presented  at  market  value  as  all  investment securities are classified as
"available  for sale".  Includes the Bank's investment in stock of Federal Reserve Bank,
Federal  Home  Loan  Bank,  and  other  equities.
     (2)    -    Includes interest-bearing checking accounts, money market accounts, and
regular  savings  accounts.
</TABLE>


     At December 31, 1997, approximately 62% of the Company's interest-earning
assets  reprice or mature within one year, as compared to approximately 89% of
the  interest-bearing  liabilities.

     Asset-liability  management  is the process by which the Company monitors
and  controls  the  mix  and  maturities  of  its assets and liabilities.  The
essential  purposes  of  asset-liability  management  are  to  ensure adequate
liquidity  and  to  maintain an appropriate balance between interest sensitive
assets  and  liabilities.    The  Bank  has  established  an  Asset-Liability
Management  Committee  which  uses a variety of tools to analyze interest rate
sensitivity,  including  a  static gap presentation and a simulation model.  A
"static  gap"  presentation  (as  in  the above table) reflects the difference
between  total  interest-sensitive  assets and liabilities within certain time
periods.    While  the  static  gap  is  a  widely-used  measure  of  interest
sensitivity,  it  is  not,  in  management's  opinion,  a  true indicator of a
company's  sensitivity  position.   It presents a static view of the timing of
maturities and repricing opportunities, without taking into consideration that
changes  in  interest  rates do not affect all assets and liabilities equally.
For  example,  rates  paid  on  a substantial portion of savings and core time
deposits  may  contractually  change within a relatively short time frame, but
those  rates are significantly less interest-sensitive than market-based rates
such  as  those paid on non-core deposits.  Accordingly, a liability sensitive
gap  position is not as indicative of a company's true interest sensitivity as
would  be  the  case  for an organization which depends to a greater extent on
purchased  funds to support earning assets.  Net interest income would also be
impacted  by  other  significant factors in a given interest rate environment,
including the spread between the prime rate and the incremental borrowing cost
and  the volume and mix of earning asset growth.  Accordingly, the Bank 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  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.  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.  The forecast presents information over a 12
month  period.  It reports a base case in which interest rates remain flat and
reports  variations  that  occur  when  rates  increase and decrease 100 basis
points.    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.

SECURITIES
----------
     The  Company  maintains  a  portfolio of investment securities consisting
primarily  of  U.S.  Treasury  securities,  U.S.  government  agencies,
mortgage-backed  securities,  and  municipal  securities.    The  investment
portfolio is designed to enhance liquidity while providing acceptable rates of
return.    The following table sets forth the carrying value of the investment
securities of the Company at December 31, 1997, 1996, and 1995.  There were no
investments  categorized  as  "held  to  maturity"as  defined  in Statement of
Financial  Accounting  Standards  ("SFAS")  No.  115,  "Accounting for Certain
Investments  in  Debt  and  Equity  Securities".



<TABLE>
<CAPTION>

                           SECURITY PORTFOLIO COMPOSITION
                               (DOLLARS IN THOUSANDS)


                                                    1997     1996     1995
                                                   -------  -------  -------
<S>                                                <C>      <C>      <C>
     Available for Sale, at market value:
          U.S. Treasury . . . . . . . . . . . . .  $ 2,750  $ 5,494  $ 5,772
          Obligations of U.S. government agencies   11,104    8,647   11,965
          Mortgage-backed securities. . . . . . .    7,251    3,746    1,977
          Municipal securities. . . . . . . . . .    7,108      624      371
                                                   -------  -------  -------
                                                   $28,213  $18,511  $20,085
                                                   =======  =======  =======
</TABLE>



     The  following  table  indicates  the  carrying  value of each investment
security  category  by maturity as of December 31, 1997.  The weighted average
yield  for  each  range of maturities at December 31, 1997 is also shown.  All
securities  are classified as "Available for Sale" as defined in SFAS No. 115.

<TABLE>
<CAPTION>

                                              SECURITY PORTFOLIO MATURITY SCHEDULE
                                                     (DOLLARS IN THOUSANDS)


                             Within 1               After 1,                After 5,               After 10               Total
                               Year                and Within              and Within                Years               -------
                             --------                5 Years                10 Years               ---------
                                                   -----------             -----------
                              Market    Weighted     Market     Weighted     Market     Weighted    Market    Weighted   Market
                               Value     Average      Value      Average      Value      Average     Value     Average    Value
                                          Yield                   Yield                   Yield                 Yield
                             ---------  ---------  -----------  ---------  ----------- ---------   --------- ---------   -------
<S>                          <C>        <C>        <C>          <C>        <C>          <C>        <C>        <C>        <C>
U. S. Treasury. . . . . . .  $   1,502      5.87%  $     1,248      5.64%            -         -           -         -   $ 2,750
U. S. Government agencies .      1,249      5.54%        6,063      6.43%  $     3,792      6.62%          -         -    11,104
Mortgage-backed securities.          -         -         1,754      6.23%          761      6.63%  $   4,736      6.69%    7,251
Municipal securities (1). .          -         -             -         -   $     1,731      7.14%      5,377      7.38%    7,108
                             ---------  ---------  -----------  ---------  -----------  ---------  ---------  ---------  -------
     Total. . . . . . . . .  $   2,751      5.72%  $     9,065      6.29%  $     6,284      6.76%  $  10,113      7.06%  $28,213
                             =========  =========  ===========  =========  ===========  =========  =========  =========  =======






                             Weighted
                              Average
                               Yield
                             ---------
<S>                          <C>
U. S. Treasury. . . . . . .      5.77%
U. S. Government agencies .      6.40%
Mortgage-backed securities.      6.57%
Municipal securities (1). .      7.32%
                             ---------
     Total. . . . . . . . .      6.62%
                             =========
<FN>

(1)  -  Yields have been adjusted to a tax equivalent basis assuming a 34% Federal tax rate.

</TABLE>

       The weighted average yields shown in the previous table are calculated
on  the  basis of cost and effective yields for the scheduled maturity of each
security.    At  December 31, 1997, the market value of the Company's security
portfolio  was  $28.2 million compared to its amortized cost of $28.1 million.
At year end, the average maturity of the security portfolio was 5.6 years, the
average  duration of the portfolio was 3.9 years, and the average adjusted tax
equivalent  yield  on  the  portfolio for the year ended December 31, 1997 was
6.47%.   Certain securities contain call provisions which could decrease their
anticipated  maturity.    Certain  securities  also  contain  rate  adjustment
provisions  which  could  either  increase  or  decrease  their  yields.

     Decisions  involving  securities are based upon management's expectations
of  interest  rate  movements,  overall market conditions, the composition and
structure  of  the  balance  sheet,  and  computer-based  simulations  of  the
financial  impacts  of  alternative rate/maturity scenarios.  The Company does
not purchase or hold securities for trading purposes.  However, securities may
be  sold  prior to their maturity as all securities in the Bank's portfolio at
December  31, 1997 were classified as "available for sale" and recorded on the
Company's  balance  sheet  at  market  value.


LOANS
-----
     The  loan portfolio is the Company's principal earning asset.  Management
believes  that  the  loan  portfolio is adequately diversified.  The following
table  shows the composition of the loan portfolio at December 31, 1997, 1996,
and  1995.
<TABLE>
<CAPTION>

                          LOAN PORTFOLIO COMPOSITION
                            (DOLLARS IN THOUSANDS)


                                            1997       1996       1995
                                          ---------  ---------  --------
<S>                                       <C>        <C>        <C>
Commercial and industrial. . . . . . . .  $ 25,313   $ 21,775   $14,898
Real estate - commercial . . . . . . . .    41,172     33,475    26,889
Real estate - residential. . . . . . . .    37,683     33,140    21,482
Construction . . . . . . . . . . . . . .     3,685      4,518     4,909
Installment and other consumer loans . .     7,819      7,031     5,702
Consumer finance, net of unearned income     2,792      2,526     1,621
Other loans, including overdrafts. . . .       291        227       211
                                          ---------  ---------  --------
                                           118,755    102,692    75,712
Less - Allowance for loan losses . . . .    (1,728)    (1,487)   (1,068)
                                          ---------  ---------  --------
Net loans. . . . . . . . . . . . . . . .  $117,027   $101,205   $74,644
                                          =========  =========  ========
</TABLE>



     The  Company's  real estate loans are primarily owner-occupied commercial
facilities  and  other  loans  secured by both commercial and residential real
estate located within the Company's primary market area.  The Company does not
actively pursue long-term, fixed rate mortgage loans for retention in its loan
portfolio.   Commercial loans are spread through a variety of industries, with
no  industry  or  group  of  related  industries  accounting for a significant
portion of the commercial loan portfolio.  These loans may be made on either a
secured  or  unsecured  basis.    When  taken, collateral consists of liens on
inventories,  receivables,  equipment,  and furniture and fixtures.  Unsecured
commercial loans are generally short-term with emphasis on repayment strengths
and  low  debt-to-worth  ratios.    At  December  31, 1997, the Company had no
foreign  loans.

     A  significant  portion  of  the installment and other consumer loans are
secured  by automobiles and other personal assets.  Consumer finance loans are
those  originated  by  the  Company's  consumer  finance  subsidiary,  Freedom
Finance,  Inc.  These  loans  generally carry a higher risk of nonpayment than
do the other categories of loans, but the increased risk is substantially off-
set by  the smaller amounts of such loans and the higher rates charged thereon,
as well  as  a  higher  allocation  of  the  allowance for loan losses related
to Freedom's  loan  portfolio.

LOAN  MATURITY  AND  INTEREST  SENSITIVITY
------------------------------------------
     The  following  table  shows  the  maturity  distribution  and  interest
sensitivity  of  the  Company's  loan  portfolio  at  December  31,  1997.

<TABLE>
<CAPTION>

                         LOAN PORTFOLIO MATURITY SCHEDULE
                              (DOLLARS IN THOUSANDS)


                                           1 Year    Over 1,      Over     Total
                                          or Less   Less Than   5 Years    -----
                                          -------    5 Years    -------
                                                    ----------
<S>                                       <C>       <C>         <C>       <C>
MATURITY DISTRIBUTION:
Commercial and industrial. . . . . . . .  $ 12,399  $   12,180  $    734  $ 25,313
Real estate - commercial . . . . . . . .     3,999      34,384     2,789    41,172
Real estate - residential. . . . . . . .    11,614      18,616     7,453    37,683
Construction . . . . . . . . . . . . . .       667       2,988        30     3,685
Installment and other consumer loans . .     2,851       4,802       166     7,819
Consumer finance, net of unearned income     2,792           -         -     2,792
Other loans, including overdrafts. . . .       291           -         -       291
                                          --------  ----------  --------  --------
Total. . . . . . . . . . . . . . . . . .  $ 34,613  $   72,970  $ 11,172  $118,755
                                          ========  ==========  ========  ========

INTEREST SENSITIVITY:
Total of loans with:
Predetermined interest rates . . . . . .  $  9,010  $   33,537  $  2,329  $ 44,876
Floating interest rates. . . . . . . . .    25,603      39,433     8,843    73,879
                                          --------  ----------  --------  --------
Total. . . . . . . . . . . . . . . . . .  $ 34,613  $   72,970  $ 11,172  $118,755
                                          ========  ==========  ========  ========

</TABLE>


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

     At  December  31, 1997 and 1996, the Bank held no other real estate owned
acquired  in  partial  or  total satisfaction of problem loans.  There were no
loans on nonaccrual at December 31, 1997.  Loans on nonaccrual at December 31,
1996  totaled  $110,000 or .10% of outstanding loans.   The nonaccrual loan at
December  31,  1996 was considered impaired under the definitions of Statement
of  Financial  Accounting Standards No. 114.  The related impairment allowance
at  the  end  of  1996 was zero.  There were no impaired loans at December 31,
1997.   Assuming the nonaccrual loan performed in accordance with its original
terms,  additional  interest  income  for  1996  would have been approximately
$1,800.   Loans past due 90 days and greater totaled $82,000 or 0.07% of gross
loans  at  December  31,  1997  compared to $200,000 or .19% of gross loans at
December  31,  1996.

     Management  maintains  a  list  of potential problem loans which includes
nonaccrual loans, loans past due in excess of 90 days which are still accruing
interest,  and  other  loans  which  are  credit graded (either internally, by
external  audits  or regulatory examinations) as "substandard", "doubtful", or
"loss".    A  loan  is  added  to  the  list  when management becomes aware of
information  about possible credit problems of borrowers that causes doubts as
to  the  ability  of  such borrowers to comply with the current loan repayment
terms.   The total amount of loans outstanding at December 31, 1997 determined
to  be  potential problem loans was $1.0 million or 0.9% of the loan portfolio
at  year  end,  compared to $212,000 or 0.2% of the loan portfolio at December
31, 1996.  The amount of potential problem loans at December 31, 1997 does not
represent management's estimate of potential losses since  he majority of such
loans  are  secured  by  real estate or other collateral.  Management believes
that  the  allowance  for  loan losses as of December 31, 1997 was adequate to
absorb  any  losses related to the nonperforming loans and problem loans as of
that  date.

     Management  continues  to monitor closely the levels on nonperforming and
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.


PROVISION  AND  ALLOWANCE  FOR  LOAN  LOSSES,  LOAN  LOSS  EXPERIENCE
---------------------------------------------------------------------
     The  allowance  for  loan  losses  is  based  on  management's  periodic
evaluation  of the loan portfolio and reflects an amount that, in management's
opinion,  is adequate in relation to the risk of future losses inherent in the
loan  portfolio.   The allowance is established through charges to earnings in
the  form  of  a  provision  for  loan losses.  Loan losses and recoveries are
charged  or  credited  directly  to  the allowance.  The amount charged to the
provision for loan losses by the Company is based on management's judgment and
is  dependent upon growth in the loan portfolios; the total amount of past due
loans; nonperforming loans; known loan deteriorations and/or concentrations of
credit;  trends  in  portfolio  volume,  maturity  and  composition; projected
collateral values; general economic conditions; and management's assessment of
potential  losses based upon internal credit grading of the loans and periodic
reviews  and  assessments  of  credit  risk  associated with particular loans.

     In  assessing  the  adequacy  of  the  allowance,  management  relies
predominately on its ongoing review of the loan portfolio, which is undertaken
both  to  ascertain  whether there are losses which must be charged-off and to
assess  the  risk characteristics of the portfolio in the aggregate.  The Bank
attempts  to  deal  with  repayment  risks  through  the establishment of, and
adherence  to,  internal credit policies.  These policies include loan officer
and  credit  limits,  periodic  documentation  examination,  and  follow-up
procedures  for  any exceptions to credit policies.  Loans that are determined
to  involve  any  more  than  the  normal  risk are placed in a special review
status.

     On  December  31, 1997, the allowance for loan losses was $1.7 million or
1.46%  of  outstanding  loans.  This is compared to $1.5 million allowance for
loan  losses  at December 31, 1996 or 1.43% of outstanding loans at that date.
For  the  year  ended December 31, 1997, the Company reported consolidated net
charge-offs  of  $177,000  or  .16%  of  average  loans.   This is compared to
consolidated net charge-offs of $154,000 or .17% of average loans for the year
ended December 31, 1996.  During 1997, the Company charged a total of $392,000
to  expense  through  its  provision for loan losses, compared to $516,000 for
1996  and  $277,000  for  1995.    The  change  in the provision each year was
directly  related  to  the  level of net originations in each year as follows:
$16.0  million  in  1997,  $27.2  million  in 1996, and $15.7 million in 1995.
Another  factor  influencing  the amount charged to the provision each year is
the  total outstanding loans and charge-off activity of the Finance Company in
relation  to  the consolidated totals.  Loans of the Finance Company generally
have  higher  inherent  risk  than  do  loans of the Bank, and thus, require a
higher provision  Estimates charged to the provision for loan losses are based
on management's judgment as to the amount required to cover inherent losses in
the  loan  portfolio  and  are  adjusted  as  necessary.

     For  the  years  ended December 31, 1997, 1996, and 1995, Summit National
Bank  recorded a provision for loan losses of $216,000, $361,000, and $160,000
respectively.  The significant increase for 1996 is a direct result of the 36%
loan growth experienced by the Bank in 1996.  For the years ended December 31,
1997,  1996,  and  1995,  the Bank experienced net charge-offs (recoveries) of
$1,000, $29,000, and $(14,000), respectively.  In fiscal 1997, 1996, and 1995,
Freedom  Finance,  Inc.  recorded  provisions  for  loan  losses  of $176,000,
$155,000,  and  $117,000,  respectively.    For  those  same  years,  Freedom
experienced  net charge-offs of $176,000, $125,000, and $73,000, respectively.
The  increase in net charge-offs and the related increase in this subsidiary's
provision  is  related  to  (1) the growth of number of branches, accounts and
loans  outstanding,  and (2) industry trends and general increases in consumer
debt  and  consumer  bankruptcies.    Freedom's customers are generally in the
low-to-moderate income group of borrowers.  Over the past several years, there
has  been  a proliferation of small consumer loan companies and other consumer
debt  providers  competing  for  pieces  of  this segment of the consumer debt
market.    It  is  not unusual for customers of Freedom simultaneously to have
loans  outstanding at several other small loan companies which results in some
customers  incurring  more  debt  than  they  can  service.

     The  following  table  sets  forth  certain  information  with respect to
changes  in  the Company's allowance for loan losses arising from charge-offs,
recoveries,  and  provision  for  the years ended December 31, 1997, 1996, and
1995.

<TABLE>
<CAPTION>

                        SUMMARY OF LOAN LOSS EXPERIENCE
                            (DOLLARS IN THOUSANDS)


                                            1997     1996     1995
                                           -------  -------  -------
<S>                                        <C>      <C>      <C>
Balance at beginning of period. . . . . .  $1,487   $1,068   $  822
                                           -------  -------  -------
Charge-offs:. . . . . . . . . . . . . . .
   Commercial & industrial. . . . . . . .      40       50        2
   Real estate. . . . . . . . . . . . . .       -        -        -
   Installment & consumer                     388      337       88
                                           -------  -------  -------
                                              428      387       90
                                           -------  -------  -------
Recoveries: . . . . . . . . . . . . . . .
   Commercial & industrial. . . . . . . .      55       17       14
   Installment & consumer                     196      216       18
                                           -------  -------  -------
                                              251      233       32
                                           -------  -------  -------
Net charge-offs . . . . . . . . . . . . .    (177)    (154)     (58)
Provision charged to expense. . . . . . .     392      516      277
Allocation for purchased loans. . . . . .      26       57       27
                                           -------  -------  -------
Balance at end of period. . . . . . . . .  $1,728   $1,487   $1,068
                                           =======  =======  =======
Ratio of net charge-offs to average loans     .16%     .17%     .09%
                                           =======  =======  =======
Ratio of allowance for loan losses to . .    1.46%    1.43%    1.41%
gross loans
Ratio of net charge-offs to allowance . .   10.24%   10.36%    5.43%
for loan losses

</TABLE>


     Management  considers  the  allowance  for  loan losses adequate to cover
inherent losses on the loans outstanding at December 31, 1997.  In the opinion
of management, there are no material risks or significant loan concentrations,
and  the  allowance  for  loan  losses  is adequate to absorb anticipated loan
losses  in  the  present portfolios.  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  and  other  factors  affecting  loans.   While it is the Company's
policy to charge-off in the current period loans in which a loss is considered
probable,  there  are  additional  risks  of  future  losses  which  cannot be
quantified  precisely  or  attributed to particular loans or classes of loans.
Because  these  risks  include  the state of the economy, industry trends, and
conditions  affecting  individual  borrowers,  management's  judgement  of the
allowance is necessarily approximate and imprecise.  No assurance can be given
that  the  Company will not in any particular period sustain loan losses which
would  be  sizable  in  relationship to the amount reserved or that subsequent
evaluation  of  the  loan  portfolio,  in light of conditions and factors then
prevailing,  will  not  require  significant changes in the allowance for loan
losses  or  future charges to earnings.  The allowance for loan losses is also
subject  to  review  and approval by various regulatory agencies through their
periodic  examinations of the Company's subsidiaries.  Such examinations could
result  in required changes to the allowance for loan losses.  Summit National
Bank  was  examined  in  November 1997 by the Office of the Comptroller of the
Currency.    No adjustments in the allowance or significant adjustments to the
Bank's  internal  classified  loans were made as a result of this examination.


COMPOSITION  OF  ALLOWANCE  FOR  LOAN  LOSSES
 ---------------------------------------------
     The  table  below presents an allocation of the allowance for loan losses
for  the  years ended December 31, 1997, 1996, and 1995, by the different loan
categories.    However,  the  breakdown  is  based  on a number of qualitative
factors  and  the  amounts  presented are not necessarily indicative of actual
amounts  which  will  be  charged to any particular category.  Any unallocated
reserve  has  been  included  within  the various loan categories in the table
below.

<TABLE>
<CAPTION>

                                     ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
                                              (DOLLARS IN THOUSANDS)


                                           1997                     1996                     1995
                                        ----------               ----------               ----------
                                        Allowance   Percent of   Allowance   Percent of   Allowance   Percent of
                                        Breakdown    Loans in    Breakdown    Loans in    Breakdown    Loans in
                                       ----------    Category    ---------    Category    ----------   Category
                                                    -----------              -----------              -----------
<S>                                     <C>         <C>          <C>         <C>          <C>         <C>
Commercial and industrial. . . . . . .  $      368       21.32%  $      313       21.07%  $      209       19.58%
Real estate - commercial . . . . . . .         599       34.67%         482       32.39%         377       35.34%
Real estate - residential. . . . . . .         548       31.73%         477       32.07%         302       28.24%
Construction . . . . . . . . . . . . .          54        3.10%          65        4.37%          69        6.45%
Installment and consumer finance loans         154        8.93%         147        9.89%         108       10.11%
Other loans, including overdrafts. . .           5        0.25%           3        0.22%           3        0.28%
                                        ----------  -----------  ----------  -----------  ----------  -----------
                                        $    1,728      100.00%  $    1,487      100.00%  $    1,068      100.00%
                                        ==========  ===========  ==========  ===========  ==========  ===========

</TABLE>


DEPOSITS
 --------
     The  Company  has  a  large,  stable  base  of time deposits, principally
certificates  of  deposit  and  individual  savings  and  retirement  accounts
obtained  primarily  from  customers  in South Carolina.  The Company does not
purchase  brokered  deposits.

     The  maturity  distribution  of  certificates  of deposit greater than or
equal  to  $100,000  as  of  December  31,  1997  is  as  follows  (dollars in
thousands):

<TABLE>
<CAPTION>



<S>                                                  <C>
3 months or less. . . . . . . . . . . . . . . . . .  $16,178
Greater than 3, but less than or equal to 6 months.    5,011
Greater than 6, but less than or equal to 12 months    5,959
Greater than 12 months. . . . . . . . . . . . . . .    2,347
                                                     -------
                                                     $29,495
                                                     =======

</TABLE>



At  December  31,  1997,  the  Company  had  no  foreign  deposits.


RETURN  ON  EQUITY  AND  ASSETS
-------------------------------
     The  return  on average shareholders' equity ratio (net income divided by
average  total  equity)  and  the  return  on average assets ratio (net income
divided  by average total assets) for the years ended December 31, 1997, 1996,
and  1995  are  presented  in the following table.  The Company has not paid a
cash  dividend  since its inception.  The holders of common stock are entitled
to  receive  dividends  when  and  as declared by the Board of Directors.  The
Company's  present  policy  is to retain all earnings for the operation of the
Company  until  such  time  as future earnings support cash dividend payments.



<TABLE>
<CAPTION>


                                            For the Year Ended
                                               December 31,
                                           --------------------
                                            1997   1996    1995
                                           ------  -----  ------
<S>                                        <C>     <C>    <C>
Return on average assets. . . . . . . . .   1.05%  0.82%   0.56%
Return on average shareholders' equity. .  12.60%  9.07%   5.14%
Average shareholders' equity as a percent   8.35%  9.05%  10.79%
of average assets

</TABLE>


ITEM  2.    PROPERTIES

     The operations of the Company and the Bank do not require any substantial
investment  in fixed assets.  The principal executive offices for the Company,
the  Bank and the Finance Company are located at 937 North Pleasantburg Drive,
Greenville,  South  Carolina.    In  addition,  this site serves as the Bank's
operations  facility  and  main  branch.    The  building  at this location is
approximately  7,500  square  feet  in area and is situated on a one-acre lot.
The  Company executed a lease for the land and building and assigned the lease
to  the  Bank effective on the Bank's commencement of operations.  The initial
term  of  the lease commenced April 1, 1990 and a renewal option was exercised
in  April  1995.    The term on the renewal of the lease is five years and the
Company  has additional options to renew for two consecutive five-year periods
under  substantially the same terms.  The lease provides that the Company will
be  responsible  for real property taxes, insurance, utilities and maintenance
with respect to the premises.  During 1995, the Bank completed construction on
approximately  .63  acres  of  land  at  2201  Augusta Road, Greenville, South
Carolina  of  its  second  full  service  bank  branch.    The  facility  is
approximately  6,500  square feet and is fully owned and occupied by the Bank.

     The  twelve Finance Company branches throughout South Carolina are housed
in  leased  facilities  averaging 1,200 square feet each with lease terms from
three  to  ten years.  The lease agreements have various renewal options under
substantially  the  same  terms  as  the  original  agreements.


ITEM  3.    LEGAL  PROCEEDINGS

     Although  the  Company  is  from  time  to  time a party to various legal
proceedings  arising  out  of  the  ordinary  course  of  business, management
believes  there  is  no litigation or proceeding threatened or pending against
the  Company  that could reasonably be expected result in a materially adverse
change  in  the  business  or  financial  condition  of  the  Company.


ITEM  4.    SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     There  were  no  matters  submitted  to a vote of the shareholders in the
fourth  quarter  of  the  Company's  fiscal  year  ending  December  31, 1997.



     PART  II

ITEM  5.     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

     Summit  Financial  Corporation's  common stock is traded in the Small-Cap
market  on  the  NASDAQ system under the symbol SUMM.  As of February 28, 1998
there  were approximately 436 shareholders of record of the common stock.  The
number  of shareholders does not reflect the number of persons or entities who
hold  their stock in nominee or "street" name through various brokerage firms.

     The  following  table presents the high, low and closing sales prices for
the  Company's common stock for each full quarterly period within the two most
recent  fiscal years.  The source for the following information was the Nasdaq
market.

<TABLE>
<CAPTION>

                                QUARTERLY COMMON STOCK SUMMARY


                                1997    1997    1997    1997    1996    1996    1996    1996
                               ------   ----    -----   ----    -----   -----   ----    ----
                                 4Q      3Q      2Q      1Q      4Q      3Q      2Q      1Q
                               ------  ------  ------  ------  ------  ------  ------  ------
<S>                            <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Stock Sales Price ranges: (1)
    High. . . . . . . . . . .  $28.00  $19.52  $15.71  $14.88  $14.85  $14.97  $15.87  $14.29
    Low . . . . . . . . . . .  $17.14  $13.33  $13.33  $12.38  $12.24  $12.25  $12.25  $11.23
    Close . . . . . . . . . .  $24.75  $19.05  $14.52  $14.70  $13.83  $12.70  $13.60  $12.25

<FN>

(1)  Share  data have been restated to reflect six 5% stock distributions issued between
1993 and  1997.

</TABLE>

          The Company has not paid any cash dividends.  The holders of common
stock  are  entitled to receive dividends when and as declared by the Board of
Directors.    The  Company's  present policy is to retain all earnings for the
operation  of  the  Company  until  such  time as future earnings support cash
dividend  payments.   Accordingly, the Company does not anticipate paying cash
dividends  in  the  foreseeable  future.    For  information  on  dividend
restrictions,  refer  to  Part  II,  Item  8.  "Financial  Statements  and
Supplementary Data", Note 15 under Notes to Consolidated Financial Statements.


ITEM  6.          SELECTED  FINANCIAL  DATA

     The  information  presented  below should be read in conjunction with the
consolidated  financial  statements,  the  notes  thereto  and  "Management's
Discussion  and  Analysis  of  Financial  Condition and Results of Operations"
contained  under  Item  7  of  this  report.

<TABLE>
<CAPTION>

                     SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
                     ----------------------------------------------
                   (All Amounts, Except Per Share Data, In Thousands)


                                       1997       1996       1995       1994      1993
                                     ---------  ---------  ---------  --------  --------
<S>                                  <C>        <C>        <C>        <C>       <C>
INCOME STATEMENT DATA
Net interest income . . . . . . . .  $  6,977   $  5,583   $  3,976   $ 2,942   $ 2,070
Provision for loan losses . . . . .       392        516        277       168       129
Other income. . . . . . . . . . . .     1,035        980        611       345       260
Other expenses. . . . . . . . . . .     5,150      4,401      3,469     2,348     1,847
Provision for income taxes. . . . .       895        644        312       109         -
Net income. . . . . . . . . . . . .     1,575      1,002        529       661       354

PER SHARE DATA: (1)
Basic net income. . . . . . . . . .  $   1.11   $   0.72   $   0.38   $  0.47   $  0.25
Diluted net income. . . . . . . . .  $   1.01   $   0.66   $   0.36   $  .046   $  0.25
Book value per share. . . . . . . .  $   9.29   $   8.31   $   7.63   $  7.05   $  6.75
Closing market price per share. . .  $  24.75   $  13.83   $  12.09   $ 10.28   $  7.84

BALANCE SHEET DATA
(YEAR END)
Total assets. . . . . . . . . . . .  $160,279   $134,162   $115,072   $83,656   $71,173
Loans, net of unearned income . . .   118,755    102,692     75,712    60,272    50,043
Allowance for loan losses . . . . .     1,728      1,487      1,068       822       697
Total earning assets. . . . . . . .   151,300    126,762    107,730    79,704    67,941
Deposits. . . . . . . . . . . . . .   140,928    117,805     99,319    67,348    60,446
Shareholders' equity. . . . . . . .    13,369     11,637     10,664     9,846     9,075

BALANCE SHEET DATA
(AVERAGES)
Total assets. . . . . . . . . . . .  $149,662   $121,997   $ 95,286   $78,532   $66,305
Loans, net of unearned income . . .   110,812     88,482     66,451    54,233    45,386
Total earning assets. . . . . . . .   142,561    116,037     90,118    74,778    62,706
Deposits. . . . . . . . . . . . . .   131,249    106,363     80,670    66,262    55,546
Shareholders' equity. . . . . . . .    12,500     11,047     10,286     9,615     9,027

FINANCIAL RATIOS
Return on average assets. . . . . .      1.05%      0.82%      0.56%     0.84%     0.53%
Return on average equity. . . . . .     12.60%      9.07%      5.14%     6.88%     3.93%
Net interest margin . . . . . . . .      4.94%      4.81%      4.41%     3.93%     3.30%
Tier 1 risk-based capital . . . . .     10.43%     10.79%     12.62%    16.14%    18.11%
Total risk-based capital. . . . . .     11.68%     12.17%     13.80%    17.23%    20.01%

ASSET QUALITY RATIOS
Allowance for loan losses to loans.      1.46%      1.43%      1.41%     1.36%     1.39%
Net charge-offs to average loans. .       .16%       .17%       .09%      .11%      .02%
Nonperforming assets. . . . . . . .         -   $    110          -   $    37         -

<FN>

(1)  All  per share data has been restated to reflect all 5% stock distributions issued.

</TABLE>


ITEM  7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

     The  following  discussion  is  presented  to  provide the reader with an
understanding  of  the financial condition and results of operations of Summit
Financial  Corporation  and its subsidiaries, Summit National Bank and Freedom
Finance,  Inc.

     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",  "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.    It  currently has two full service offices in Greenville, 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.  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.

     Freedom  Finance,  Inc.  ("Freedom",  the  "Finance  Company")  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 $1,000 and with maturities
ranging  from  three  to  eighteen  months.   Freedom operates twelve branches
throughout  South  Carolina.

BALANCE  SHEET  REVIEW

GENERAL
     As of December 31, 1997, total assets and total gross loans had increased
19%  and  16%,  respectively,  as  compared  to  1996 while total deposits had
increased  approximately  20%  during  the  same  period.    The difference is
reflected  in  the  increase in  investment securities of $9.7 million or 52%.
On  December 30, 1997, a 5% stock distribution in the form of a stock dividend
was  issued  to  shareholders  of  record  as  of  December  15,  1997.   This
distribution  resulted in the issuance of 68,296 shares of the Company's $1.00
par  value  common  stock.   All share and per share data has been restated to
reflect  this  stock  distribution.

LOANS
     The loan portfolio consists primarily of commercial and industrial loans;
commercial  loans  secured by real estate; loans secured by one-to-four family
residential  mortgages;  and consumer loans.  Substantially all of these loans
are  located  in  the  Upstate  of  South Carolina and are concentrated in the
Company's  market  area.    At December 31, 1997, the Company had no loans for
highly  leveraged transactions and no foreign loans.  The Bank's primary focus
has  been  on  commercial  lending to small and medium-sized businesses in its
marketplace.   Commercial loans are spread throughout a variety of industries,
with  no  industry or group of related industries accounting for a significant
portion  of  the  commercial  loan  portfolio.

     As  of December 31, 1997, the Company had total loans outstanding, net of
unearned  income,  of  $118.8 million and a loan-to-deposit ratio of 84%.  The
1997  amounts  represent  an  increase  of  $16.1 million or 16% from the 1996
outstanding  loans  of  $102.7 million.  The loan-to-deposit ratio at December
31,  1996  was  87%.

     Outstanding  loans  represent  the largest component of earning assets at
78%  of average earning assets for 1997 compared to 76% for 1996.  Gross loans
were 74% and 77%, respectively, of total assets at December 31, 1997 and 1996.
The  16%  increase  in loans between 1996 and 1997 is attributable to internal
growth for the Bank, which did not purchase any loans during the year, and the
Finance  Company's  acquisition  of  $499,000  in loans receivable.  Freedom's
outstanding  loans,  net  of unearned income, totaled $2.8 million, or 2.4% of
consolidated  loans at December 31, 1997.  This is compared to $2.5 million or
2.5%  of  consolidated  loans  at  December  31,  1996.

     For  1997,  the  Company's  loans averaged $110.8 million with a yield of
10.37%.    This  is  compared  to  $88.5 million average loans with a yield of
10.09% in 1996.  The interest rates charged on loans of the Bank vary with the
degree of risk, maturity and amount of the loan.  Competitive pressures, money
market  rates,  availability  of  funds, and government policy and regulations
also  influence  interest  rates.   Loans of the Finance Company are regulated
under  state laws which establish the maximum loan amounts and interest rates,
and the types and maximum amounts of fees, insurance premiums, and other costs
that  may be charged.  The increase in the loan yield during 1997 reflects the
general  rising  rate  environment experienced in early 1997 at which time the
prime lending rate increased 25 basis points.  Approximately 64% of the Bank's
loan  portfolio and 63% of the consolidated loan portfolio have variable rates
and  immediately  reprice  upwards  with  the  increase  in  the  prime  rate.

     The  allowance for loan losses is established through charges in the form
of  a  provision  for  loan  losses. Loan losses and recoveries are charged or
credited  directly  to the allowance.  The amount charged to the provision for
loan  losses  by  the  Bank  and  the Finance Company is based on management's
judgment  as  to  the amounts required to maintain an adequate allowance.  The
level  of  this allowance is dependent upon growth in the loan portfolios; the
total  amount  of  past  due  loans;  nonperforming  loans;  and  known  loan
deteriorations  and/or  concentrations of credit.  Other factors affecting the
allowance  are trends in portfolio volume, maturity and composition; projected
collateral  values;  and  general  economic conditions.  Finally, management's
assessment of potential losses based upon internal credit grading of the loans
and periodic reviews and assessments of credit risk associated with particular
loans  is  considered  in  establishing  the  allowance  amount.

     Management  maintains  an  allowance  for  loan  losses which it believes
adequate  to  cover  inherent  losses  in  the  loan  portfolio.    However,
management's  judgment  is  based  upon  a  number of assumptions about future
events  which  are  believed  to be reasonable, but which may or may not prove
valid.   There are risks of future losses which cannot be quantified precisely
or  attributed  to  particular loans or classes of loans.  Management uses the
best information available to make evaluations, however, future adjustments to
the  allowance  may  be  necessary if economic conditions differ substantially
from  the assumptions used in making evaluations.  The Company is also subject
to  regulatory  examinations  and  determinations  as  to  the adequacy of the
allowance, which may take into account such factors as the methodology used to
calculate  the  allowance  for  loan  losses  and the size of the allowance in
comparison to a group of peer companies identified by the regulatory agencies.

     The  allowance  for  loan  losses  totaled $1.7 million or 1.46% of total
loans  at  the  end  of 1997.  This is compared to a $1.5 million allowance or
1.44%  of  total  loans at December 31, 1996.  For the year ended December 31,
1997,  the  Company  reported  net  charge-offs  of  $177,000  or  0.16%  of
consolidated  average  loans.    The  total  net  charge-offs consisted of the
Finance  Company  net  charge-offs  of $176,000 (5.46% of average loans of the
Finance  Company)  combined  with the Bank's net charge-offs of $1,000 for the
year.   This is compared to consolidated net charge-offs of $154,000 ($125,000
for  the  Finance  Company and $29,000 for the Bank) or 0.17% of average loans
for  the  year  ended  December  31, 1996.  Loans past due 90 days and greater
totaled  $82,000  or  0.07%  of  gross  loans at December 31, 1997 compared to
$200,000  or  .19%  of  gross  loans  at  December  31,  1996.

     The  Company  continues  to  maintain  a  high  quality  loan  portfolio.
Although loan volume increased 16% during the past year, the majority of which
was  a  result  of the Bank's growth, total nonperforming assets decreased and
there  were  no loans on nonaccrual at December 31, 1997.  Loans on nonaccrual
at December 31, 1996 totaled $110,000 or .10% of outstanding loans, which is a
relatively  low  level  in comparison to peer banks.   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 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.    At  December  31, 1997 and 1996, the Bank held no other real
estate  owned  acquired  in  partial  or  total satisfaction of problem loans.
There  were no impaired loans at December 31, 1997.  At December 31, 1996, one
loan  totaling  $110,000  was  considered  impaired  under  the definitions of
Statement  of  Financial  Accounting  Standards ("SFAS") No. 114.  The related
impairment  allowance  at  December  31,  1996  was  zero.

DEPOSITS
     During 1997, interest-bearing liabilities averaged $121.2 million with an
average  rate of 5.28% compared to $97.5 million with an average rate of 5.09%
in 1996.  The 24% increase in average volume resulted principally from account
promotions  during  1997.  The increase in the average rate is a result of the
general  increasing  interest  rate  environment  during  1997 and the special
promotional rates offered on money market accounts and certificates of deposit
during  the  year.   At December 31, 1997, interest-bearing deposits comprised
approximately  87%  of total deposits and 97% of interest-bearing liabilities.
The  remainder of interest-bearing liabilities consists principally of Federal
Home  Loan  Bank  advances  and  securities  sold under repurchase agreements.

     The  Company uses its deposit base as a primary source with which to fund
earning assets.  Deposits grew 20% from $117.8 million at December 31, 1996 to
$140.9  million  as  of year end 1997.  Internal growth and account promotions
were the principal contributors to the increase in deposits as the Company did
not purchase any deposits during 1997.  The majority of the growth in deposits
occurred  in  the  money market account category which increased $14.0 million
from 1996.  Both certificates of deposit over $100,000 and other time deposits
also  increased  over  10%,  primarily  related to promotions during 1997.  In
pricing deposits, the Company considers its liquidity needs, the direction and
levels  of  interest  rates  and  local  market  conditions.

     The Company's core deposit base consists of consumer and commercial money
market  accounts,  checking  accounts,  savings  and  retirement accounts, NOW
accounts,  and  non-jumbo  time  deposits (less than $100,000).  Although such
core  deposits  are  becoming  increasingly  interest  sensitive  for both the
Company  and  the  industry as a whole, these deposits continue to provide the
Company  with  a  large  and  stable  source  of  funds.    Core deposits as a
percentage  of total deposits were approximately 79% and 77%, respectively, at
December  31,  1997  and  1996.   The Company closely monitors its reliance on
certificates  of deposit greater than $100,000, which are generally considered
less stable and more interest rate sensitive than core deposits.  Certificates
of deposit in excess of $100,000, which represented 21% and 22%, respectively,
of  total  deposits  at  December  31,  1997  and  1996, are held primarily by
customers in the Company's service area who have dealt with the Company for an
extended  period  of  time.    The  Company  has  no  brokered  deposits.

INVESTMENT  SECURITIES
     At  December  31,  1997,  the  Company's total investment portfolio had a
market  value  of  $28.2  million,  which is an increase of 52% from the $18.5
million  invested as of the end of 1996.  Investments had an amortized cost at
the  1997  year  end  of  $28.1  million.    The investment portfolio consists
primarily  of  United  States Treasury securities, securities of United States
government  agencies,  mortgage-backed  securities,  and  state  and municipal
obligations.    The  Company  does  not  invest  in corporate bonds and has no
trading  account  securities.    At  the  1997  year  end, the portfolio had a
weighted  average  maturity of approximately 5.6 years and an average duration
of  3.9 years.  Investment securities averaged $21.3 million in 1997, compared
to  the  1996  average  of  $21.2  million.

     Investment securities are the second largest earning asset of the Company
at 15% and 18% of average earning assets for 1997 and 1996, respectively.  The
average portfolio yield, on a fully tax-equivalent basis, increased from 6.05%
in  1996  to  6.47%  in  1997 primarily as a result of the maturity of several
investments  at lower than current market rates and the acquisition of several
tax-free  municipal securities, combined with a shift in the portfolio mix and
average  maturity.


INCOME  STATEMENT  REVIEW

GENERAL
     The Company reported record earnings in 1997 which were up 57% from 1996.
Net  income totaled $1.6 million, or $1.01 diluted earnings per share, in 1997
compared  with  $1.0  million, or $0.66 diluted earnings per share in 1996 and
$529,000  or  $0.36  diluted  earnings  per  share  for 1995.  The significant
improvement  in  net  income  and  earnings  per  share  between 1996 and 1997
resulted  primarily  from  the  Company's  substantial growth during the year,
which  led  to higher levels of earning assets and improved efficiency ratios.



<TABLE>
<CAPTION>

                                   INCOME STATEMENT REVIEW
                                      SUMMARY OF CHANGES


                                       Change   Change             Change   Change
                                      --------  -------            -------  -------
                              1997       $         %       1996       $        %       1995
                            --------  --------  -------  --------  -------  -------  --------
<S>                         <C>       <C>       <C>      <C>       <C>      <C>      <C>
Net interest income. . . .  $ 6,977   $ 1,394       25%  $ 5,583   $ 1,607      40%  $ 3,976
Provision for loan losses.     (392)     (124)    (24)%     (516)      239      86%     (277)
                            --------  --------  -------  --------  -------  -------  --------
Net income after provision    6,585     1,518       30%    5,067     1,368      37%    3,699
Other income . . . . . . .    1,035        55        6%      980       369      60%      611
Other expense. . . . . . .   (5,150)      749       17%   (4,401)      932      27%   (3,469)
                            --------  --------  -------  --------  -------  -------  --------
Income before taxes. . . .    2,470       824       50%    1,646       805      96%      841
Provision for income taxes     (895)      251       39%     (644)      332     106%     (312)
                            --------  --------  -------  --------  -------  -------  --------
    Net income . . . . . .  $ 1,575   $   573       57%  $ 1,002   $   473      89%  $   529
                            ========  ========  =======  ========  =======  =======  ========

</TABLE>



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  1997, the Company recorded net interest income of $7.0 million, a
25%  increase  from  the  1996  net  interest income of $5.6 million.  This is
compared to net interest income of $4.0 million for 1995.  The increase in net
interest  income  in  1997  is directly related to the increase in the average
loan  and  deposit  volume  of  the  Bank  of  25% and 24%, respectively.  Net
interest  income increased in 1996 also related to the higher average loan and
deposit  volume  of  the  Bank  which  was  up  from  1995  by  33%  and  32%,
respectively.

     For  the  year ended December 31, 1997, the Company's net interest margin
was  4.94%,  compared  to  4.81% in 1996 and 4.41% for 1995.  The net interest
margin is calculated as net interest income divided by average earning assets.
The  increase  in  1997  is  primarily  related  to  the  general  rising rate
environment  experienced  as  the  prime rate increased from 8.25% to 8.50% in
March  1997.    Although the prime rate dropped during 1995 and into 1996, the
increase  in  the  net  interest  margin  between  1995 and 1996 was primarily
related  to  the contribution of the higher level of Finance Company loans and
increases  in  Freedom's  margin  during  1996.

INTEREST  INCOME
     Interest  income  for  1997 was $13.4 million which was a $2.9 million or
28%  increase  over  the $10.5 million for 1996.  Interest income for 1995 was
$7.7  million.    The increases each year are primarily a result of the higher
level  of  earning  assets  which  averaged $142.6 million, $116.0 million and
$90.2  million in 1997, 1996 and 1995, respectively.  Changes in average yield
on  earning  assets  also affects the interest income reported each year.  The
average  yield  increased from 8.58% in 1995 to 9.09% in 1996, and to 9.43% in
1997.

     The  majority  of the increase in average earning assets between 1995 and
1996  and  between 1996 and 1997 was in loans, which are the Company's highest
yielding assets at approximately 78% of average earning assets at December 31,
1997.    Consolidated  loans  averaged  $110.8 million in 1997 with an average
yield  of  10.37%,  compared to $88.5 million in 1996 with an average yield of
10.09%,  and $66.5 million in 1995 with an average yield of 9.64%.  The higher
loan yields each year result from the increase in current market rates, higher
pricing  on  new  loan  originations  each  year,  and the contribution of the
Finance  Company  as  its  loan  portfolio  continues  to  grow.

     The  second  largest  component  of  earning  assets  is  the  Company's
investment  portfolio  which  averaged  $21.3  million yielding 6.47% in 1997.
This  is  compared  to  average  securities  of $21.2 million in 1996 yielding
6.05%, and $17.2 million yielding 5.54% for 1995.  The increase in the average
yield  of  the  investment  portfolio  is  related  to  the  timing,  maturity
distribution and types of securities purchased.  Specifically in 1997, several
tax-free  municipal  securities were purchased which contributed significantly
to  the  increase in average yield on a fully tax-equivalent basis for 1997 as
compared  to  the  prior  years.   The higher level of average securities each
year,  combined with the increases in average rate, resulted in an increase in
interest  income  on  investments of $317,000 or 33% between 1995 and 1996 and
the  increase  of  $38,000  or  3%  between  1996  and  1997.

INTEREST  EXPENSE
     The  Company's  interest  expense  for 1997 was $6.4 million, compared to
$5.0  million  for  1996  and $3.8 million for 1995.  The increase in interest
expense of 29% between 1996 and 1997 and 32% between 1995 and 1996 is directly
related  to the 24% and 32% increase in the average volume of interest-bearing
liabilities in 1997 and 1996, respectively.  An increase of 19 basis points in
the  average  rate on interest-bearing liabilities in 1997 also contributed to
the higher interest expense in that year.  The higher average rate in 1997 was
primarily  a  result  of  several  deposit  promotions with above market rates
offered  during the year to increase the level of core deposits as required to
meet  loan  growth  demands.  The Company expects the competitive deposit rate
environment to continue.  Interest-bearing liabilities averaged $121.2 million
in  1997 with an average rate of 5.28%, compared to $97.5 million in 1996 with
an average rate of 5.09%, and an average of $73.7 million with an average rate
of  5.10%  during  1995.

PROVISION  FOR  LOAN  LOSSES
     The provision for loan losses was $392,000 in 1997, $516,000 in 1996, and
$277,000  in 1995.  The change in the provision each year was directly related
to  the  level  of  net originations in each year as follows: $16.0 million in
1997,  $27.2  million  in  1996,  and  $15.7  million in 1995.  Another factor
influencing  the  amount  charged  to  the  provision  each  year is the total
outstanding  loans  and charge-off activity of the Finance Company in relation
to  the  consolidated  totals.    Loans  of the Finance Company generally have
higher  inherent  risk  than  do  loans of the Bank and thus, require a higher
provision  for  potential losses.  Estimates charged to the provision for loan
losses  are  based on management's judgment as to the amount required to cover
inherent  losses  and  are  adjusted  as  necessary.

OTHER  INCOME  AND  OTHER  EXPENSES
     Other  income  increased  $55,000  or  6%,  to  $1.0 million in 1997 from
$980,000  in  1996 and $611,000 in 1995.  Credit card related fees and income,
the  largest  single  item  in other income, rose 14% to $248,000 in 1997 from
$217,000  in 1996 and $167,000 in 1995.  The increase is related to the higher
volume  of  transactions  and  merchant  activity  in  the  Bank's credit card
portfolio each year.  The higher amount in service charges and fees on deposit
accounts,  which  increased  11% in 1997 to $194,000 from $174,000 in 1996 and
$136,000  in  1995,  is  related to the increase in the number of Bank deposit
accounts  and  transactions  subject  to  service charges and fees.  Insurance
commission  fee  income  increased  $11,000 between 1996 and 1997 and $119,000
between  1995  and  1996  related to the higher level of activity for both the
Bank  and  the  Finance  Company.  Included in insurance commissions is income
from  annuity  sales made in the Bank's nondeposit investment sales department
and  earned  commissions on credit-related insurance products generated by the
Finance  Company.   The remainder of the changes in other income is related to
(1)  late  charge  income  on  loans of the Bank and the Finance Company which
increased  $70,000 in 1996 and $28,000 in 1997 related to the higher number of
branches  and  customer  accounts; and (2) the level of activity in the Bank's
nondeposit  financial  services  and  brokerage  department  which resulted in
increased  income  in  1996  of  $134,000,  and a decrease in 1997 of $74,000.

     Total other expenses were $5.2 million in 1997, $4.4 million in 1996, and
$3.5  million  in  1995.  A  majority  of the increased expenditures each year
reflects  the  cost  of  additional  personnel  hired to support the Company's
growth.    Salaries, wages and benefits amounted to $2.7 million in 1997, $2.3
million  in  1996,  and  $1.7  million in 1995.  The increases of $415,000 and
$600,000,  respectively,  in  1997  and 1996 are a result of (1) normal annual
raises  each  year;  (2)  the  Bank  increasing  the total number of employees
related  to  the opening of the new branch in August 1995 by approximately 16%
and  adding  additional staff in the latter part of 1996 to support the higher
level  of  activity;  and (3) the Finance Company's operations which accounted
for  52%  and  49%  of the increase in 1997 and 1996, respectively, due to the
opening  of  additional  branches  each  year.

     Occupancy  and  furniture,  fixtures,  and  equipment  expenses increased
$85,000 or 11% to $890,000 in 1997 from $805,000 in 1996 and $662,000 in 1995.
The  increase  from 1996 was primarily related to the Finance Company adding 2
new  branches  in  early  1997  combined with technology hardware and software
upgrades  implemented  at the Bank during 1997.  The increase between 1995 and
1996  was  primarily related to expenses associated with the operations of the
second  Bank  branch  which opened in August 1995, and the addition of several
Finance  Company  branches  throughout  1995  and  1996.

     Included  in  the  line  item "other operating expenses", which increased
$249,000  or  19%  between  1996 and 1997 and $189,000 or 17% between 1995 and
1996,  are  charges  for  insurance  claims  and premiums; printing and office
support;  credit  card expenses; professional services; advertising and public
relations;  and  other  branch and customer related expenses.  These items are
related directly to the normal operations of the Bank and increase in relation
to  the  increase  in  assets, the higher level of transaction volume, and the
larger  number  of customer accounts.  The Bank's activity accounted for a net
$140,000  increase  in 1997 and $62,000 increase in 1996, primarily related to
the  higher  level of activity and number of accounts as compared to the prior
year, higher telephone, advertising, courier, and supplies expenses associated
with  the  second  Bank  branch  added  in August 1995, and technology-related
consultant  expenses  in 1997.  The remainder of the consolidated increase, or
$109,000  in  1997  and $127,000 in 1996, was generated by the activity of the
Finance  Company,  including  charges  for  credit  reports,  license  fees,
acquisition  premium amortization, and office support.  Freedom had 12 offices
throughout  1997,  compared  to  10  in  1996  and  8  in  1995.

INCOME  TAXES
     The  Company  recorded an income tax provision of $895,000, $644,000, and
$312,000  for  1997,  1996, and 1995, respectively.  The effective tax rate in
each  year was 36%, 39%, and 37%, respectively.  The increase of the effective
rate  in  1996  is  related  to  the  full  utilization  of net operating loss
carryforwards  in  prior  years,  while the decrease in 1997 is related to the
higher  level  of  tax-free  municipal  investments  in  that  year.

CAPITAL  RESOURCES
     Total  shareholders'  equity  amounted to $13.4 million, or 8.3% of total
assets,  at  December 31, 1997.  This is compared to $11.6 million, or 8.7% of
total  assets,  at  December  31,  1996.    The $1.7 million increase in total
shareholders' equity resulted principally from 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 earnings and from the proceeds of its initial offering of common
stock.  The Company believes that the rate of asset growth will not negatively
impact  the  capital  base.  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. At December 31,
1997,  the Company and the Bank were in compliance with each of the applicable
regulatory capital requirements and exceeded the "well-capitalized" regulatory
standards.    The  following  table  sets forth various capital ratios for the
Company  and  the  Bank  at  December  31,  1997.



<TABLE>
<CAPTION>



                           The Company                 The Bank
                           ------------                ---------
                                            Well-                    Well-
                              As of      Capitalized     As of    Capitalized
                             12/31/97    Requirement   12/31/97   Requirement
                           ------------  ------------  ---------  ------------
<S>                        <C>           <C>           <C>        <C>
Total risk-based capital.        11.68%        10.00%     10.68%        10.00%
Tier 1 risk-based capital        10.43%         6.00%      9.46%         6.00%
Leverage capital. . . . .         8.87%         5.00%      8.02%         5.00%
</TABLE>



      Book value per share at December 31, 1997 and 1996 was $9.29 and $8.31,
respectively.    The Company has issued six 5% stock distributions in the form
of  stock  dividends  to  shareholders  between  June  1993 and December 1997.

INTEREST  RATE  SENSITIVITY
     Achieving consistent growth in net interest income is the primary goal of
the  Company's  asset/liability function.  The Company attempts to control the
mix  and  maturities of assets and liabilities to achieve consistent growth in
net  interest  income  despite  changes in market interest rates.  The Company
seeks  to  accomplish  this  goal  while  maintaining  adequate  liquidity and
capital.    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 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
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.  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.  The forecast presents information over a 12 month period.  It reports
a  base  case  in which interest rates remain flat and reports variations that
occur  when  rates  increase  and decrease 100 basis points.  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  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
December  31,  1997,  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 end of 1997 of $19.2 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 64% 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.

     An  asset  sensitive  position  means  that  the Company's 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.  Interest rates dropped starting in July 1995 and into
1996,  and  the Bank's net interest margin did decline in 1996 as the yield on
loans which are tied to the prime rate dropped immediately, while the majority
of liabilities did not reprice until their fixed maturity dates.  However, the
Company's  overall  interest  margin  increased  in 1996 due to the fixed rate
loans of the Finance Company offsetting the decline at the Bank.  In 1997, the
market  experienced  an  increase  in the prime rate which was apparent in the
higher  net  interest  margin  the Company reported in 1997 as compared to the
prior  year.

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 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.  These primary liquidity sources accounted for
17%  of average assets for each of the years ended December 31, 1997 and 1996,
respectively.   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  short-term  and long-term 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.

     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 $1.3
million  in available liquidity remaining from its initial public offering and
the  retention of earnings.  All of this liquidity was advanced to the Finance
Company  to  fund its operations as of December 31, 1997.  In addition, Summit
Financial  has  an  available  line  of  credit  totaling $2.2 million with an
unaffiliated financial institution, all of which was available at December 31,
1997.    During  1997, Summit Financial entered into term loan agreements with
several  individuals  to  provide liquidity for funding the operating needs of
Freedom.    These  term  loans totaled $500,000 at December 31, 1997.  Further
sources  of  liquidity for Summit Financial include additional borrowings from
individuals,  and    management  fees  and  debt service which are paid by its
subsidiary  on  a  monthly  basis.

     Liquidity  needs  of  Freedom  Finance, primarily for the funding of loan
originations,  acquisitions,  and  operating  expenses,  have been 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, a sister company.

     The  ability  of  the  Company  to  pay  cash dividends is dependent upon
receiving cash in the form of dividends from the Bank.  The dividends that may
be  paid  by  the  Bank  to  the  Company are subject to legal limitations and
regulatory  capital  requirements.    Prior approval of the Comptroller of the
Currency is required if the total of all dividends declared by a national bank
in  any  calendar  year  exceeds  the  Bank's  net  profits (as defined by the
Comptroller)  for that year combined with its retained net profits (as defined
by  the Comptroller) for the two preceding calendar years.  As of December 31,
1997,  no  cash  dividends have been declared or paid by the Bank and the Bank
had  available  retained  earnings  of  $3.3  million.

     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.

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.  Unlike most other industries, virtually all of the assets
and  liabilities  of  a  financial  institution  are monetary in nature.  As a
result, interest rates generally have a more significant effect in a financial
institution's  performance  than  does  the  effect  of  inflation.

     The  yield  on  a  majority  of  the  Company's  earning  assets  adjusts
simultaneously  with changes in the general level of interest rates.  Over 50%
of  the  Company's liabilities are issued with fixed terms and can be repriced
only  at maturity.  During periods of rising interest rates, as experienced in
early  1997,  the  Company's  assets  reprice  faster  than  the  supporting
liabilities.    This  causes  an increase in the net interest margin until the
deposits  mature  and  are  repriced  at  higher  current  market  rates, thus
narrowing the difference between what the Company earns on its assets and what
it  pays  on  its  liabilities.    Given  the  Company's current balance sheet
structure, the opposite effect (that is, a decrease in net interest income) is
realized  in  a  falling  interest  rate environment as was experienced in the
latter  part  of  1995  and  into  1996.

ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS
     In  June  1996,  the Financial Accounting Standards Board ("FASB") issued
SFAS  No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment  of  Liabilities."    This  statement  became  effective  for
transactions  occurring  after  December  31,  1996.    The  statement  uses a
"financial  components"  approach  that  focuses  on  control to determine the
proper  accounting  for financial asset transfers.  Under that approach, after
financial  assets  are  transferred,  an entity would recognize on its balance
sheet  all  assets  it  controls  and liabilities it has incurred.  The entity
would  remove  from  the  balance sheet those assets it no longer controls and
liabilities  it  has  satisfied.  The adoption of this statement has not had a
material  effect  on  the  Company's  financial  statements.

     In  December  1996,  the  FASB  issued  SFAS  No.  127,  "Deferral of the
Effective  Date  of  Certain Provisions of SFAS No. 125", an amendment to SFAS
No.  125  which  is  effective  December  31, 1996.  This statement delays the
effective  date  of  certain provisions of SFAS No. 125 until January 1, 1998.
The  amended  provisions  include  those related to the transfers of financial
assets  and  secured  borrowings.    The provisions in SFAS No. 125 related to
servicing  assets  and  liabilities  are  not  delayed by this amendment.  The
Company  does  not  anticipate  that  adoption  of  this  standard will have a
material  effect  on  the  Company's  financial  statements.

     In  February  1997,  the  FASB issued SFAS No. 128, "Earnings per Share",
which  is  effective for both interim and annual periods ending after December
15,  1997.   This statement supersedes Accounting Principles Board Opinion No.
15,  "Earnings  per  Share".    The  purpose  of this statement is to simplify
current  reporting  and  make  U.S.  reporting  comparable  to  international
standards.   The statement requires dual presentation of basic and diluted EPS
by  entities  with  complex  capital structures (as defined by the statement).
The  adoption  of  this    standard has not had a material effect on EPS.  The
Company  has  restated  its  prior  year  EPS  to  conform  to this statement.

     Also,  in  February  1997,  the  FASB issued SFAS No. 129, "Disclosure of
Information  about  Capital  Structure",  which  is  effective  for  financial
statements for periods ending after December 15, 1997.  This statement applies
to  both  public and nonpublic entities.  The new statement requires no change
for  entities  subject  to the existing requirements.  The Company anticipates
that adoption of this standard will not have a material effect on the Company.

     In  June  1997,  the  FASB  issued SFAS No. 130, "Reporting Comprehensive
Income",  which  establishes  standards  for  reporting  and  display  of
comprehensive  income  and  its  components  in a full set of general purposes
financial  statements.    Under  this  statement,  enterprises are required to
classify  items  of  "other  comprehensive  income"  by  their  nature  in the
financial  statement  and  display  the  balance of other comprehensive income
separately  in  the  equity  section  of  a  statement  of financial position.
Statement 130 is effective for both interim and annual periods beginning after
December  15,  1997.    Comparative  financial statements provided for earlier
periods  are  required  to  be  reclassified  to reflect the provisions of the
statement.   The Company will adopt Statement 130 effective March 31, 1998 and
will provide the required disclosures in the Company's Form 10-Q for the first
quarter  of  1998.

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

     In  June  of  1996,  the  FASB  issued  an  exposure  draft of a proposed
statement  "Accounting  for  Derivatives and Similar Financial Instruments and
for  Hedging  Activities."  Under the proposed standard, all derivatives would
be  measured  at  fair  value  and  recognized  in  the statement of financial
position  as  assets or liabilities.  Although the final standard has not been
issued,  the  FASB  has  expressed  publicly  that  a final statement would be
effective  for  fiscal  years  beginning after December 15, 1998.  Because the
Company  has  no  derivative activity at this time, management does not expect
that  this  standard,  if adopted in its presently proposed form, would 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  challenges.  The Company has developed an ongoing plan designed to
ensure  that  its  operational  and  financial  systems  will not be adversely
affected  by year 2000 software failures due to processing errors arising from
calculations using the year 2000 date.  The Company has an internal task force
assigned  to  this  project  and  the Board of Directors and management of the
Company  have established year 2000 compliance as a strategic initiative.  The
Company is well into the assessment phase of the project in which all critical
applications  are  identified  and  programing  issues  determined.  While the
Company  believes  that  it  has  available  resources  to  assure  year  2000
compliance,  it  is  to  some  extent  dependent  on  vendor  cooperation.

     At  the  present  time, the Company expects its most critical application
software  vendors  to  have  all systems compliant by June 1998, at which time
testing  will  commence  and  will  be substantially completed by December 31,
1998.    The  Company  has  established time-lines for testing all noncritical
software and ancillary systems, such as telephone systems and security devices
by  the  fourth quarter of 1998.  At this time, the Company has not determined
the  cost  of making modifications to correct any year 2000 problems; however,
equipment  and  software  expenses  are not expected to materially differ from
historical  levels.    The  Company  upgrades  and  purchases  technologically
advanced  software  and  hardware  on  a  continual  basis  and  expects  to
specifically  evaluate  and test such purchases for year 2000 compliance.  The
Company  is  also  in  the  process  of  addressing  any loan relationships it
believes  could  be  materially  effected  by  the  year  2000  issue.


ITEM  7A.          QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

     The  Company's  profitability  is  affected  by  fluctuations in interest
rates.  Management's goal is to maintain a reasonable balance between exposure
to interest rate fluctuations and earnings.  A sudden and substantial increase
in  interest  rates  may adversely impact the Company's earnings to the extent
that  the  interest  rates  on  interest-earning  assets  and interest-bearing
liabilities do not change at the same speed, to the same extent or on the same
basis.

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

     The  Company's  exposure  to interest rate risk is reviewed on a periodic
basis  by the Board of Directors and the ALCO.  Interest rate risk exposure is
measured  using  interest rate sensitivity analysis to determine the Company's
change  in  NPV  in  the  event  of  hypothetical  changes  in interest rates.
Further,  interest  rate  sensitivity  gap  analysis  is used to determine the
repricing  characteristics  of the Bank's assets and liabilities.  The ALCO is
charged  with  the  responsibility to maintain the level of sensitivity of the
Bank's  net  portfolio  value  within  Board  approved  limits.

     Interest  rate  sensitivity  analysis  is  used  to measure the Company's
interest  rate  risk  by  computing estimated changes in NPV of its cash flows
from  assets, liabilities, and off-balance sheet items in the event of a range
of  assumed changes in market interest rates.  This analysis assesses the risk
of  loss  in  market  risk  sensitive instruments in the event of a sudden and
sustained  100  - 400 basis points increase or decrease in the market interest
rates.    The  Company's  Board of Directors has adopted an interest rate risk
policy  which establishes maximum allowable decreases in NPV in the event of a
sudden  and  sustained  increase  or  decrease  in market interest rates.  The
following table presents the Company's projected change in NPV for the various
rate  shock  levels  as  of  December  31,  1997.    All market risk sensitive
instruments  presented  in  this  table  are held to maturity or available for
sale.    The  Company  has  no  trading  securities.


<TABLE>
<CAPTION>



Change in Interest Rates   Policy     Market     Percent
------------------------   Limit     Value of     Change
                           -----     Portfolio   -------
                                      Equity
                                      (000s)
                                    -----------
<S>                       <C>       <C>          <C>
400 basis point rise . .    60.00%  $    18,092    41.88%
300 basis point rise . .    40.00%  $    16,427    28.82%
200 basis point rise . .    25.00%  $    14,772    15.86%
100 basis point rise . .    10.00%  $    13,775     8.02%
No change. . . . . . . .     0.00%  $    12,752     0.00%
100 basis point decline.  (10.00)%  $    11,466  (10.00)%
200 basis point decline.  (25.00)%  $     9,776  (23.34)%
300 basis point decline.  (40.00)%  $     7,983  (37.40)%
400 basis point decline.  (60.00)%  $     6,143  (51.83)%
</TABLE>


     The preceding table indicates that at December 31, 1997, in the event of
a  sudden  and  sustained  increase  in  prevailing market interest rates, the
Company's NPV would be expected to increase, and that in the event of a sudden
decrease  in  prevailing  market  interest  rates,  the Company's NPV would be
expected  to  decrease.  At December 31, 1997, the Company's estimated changes
in  NPV  were  within  the  limits  established  by  the  Board  of Directors.

     Computation  of prospective effects of hypothetical interest rate changes
included  in  these  forward-looking  statements are subject to certain risks,
uncertainties,  and  assumptions  including relative levels of market interest
rates, loan prepayments and deposit decay rates, and should not be relied upon
as indicative of actual results.  Further, the computations do not contemplate
any  actions  the  Company  could undertake in response to changes in interest
rates.

     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, does provide management insights related to
static  repricing  structure of assets and liabilities.  At December 31, 1997,
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 end of 1997 of $19.2 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 64% 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  12  month interest sensitivity gap position was within
policy  limits  established  by  the  Board  of  Directors.

     When used or incorporated by reference in disclosure documents, the words
"anticipate",  "estimate",  "expect", "project", "target", "goal", and similar
expressions,  are  intended  to identify forward-looking statements within the
meaning  of   Section 27A of the Securities Act of l933.  Such forward-looking
statements  are  subject  to  certain  risks,  uncertainties,  and assumptions
including  those  set  forth  above.    Should  one  or more of these risks or
uncertainties  materialize,  or should underlying assumptions prove incorrect,
actual  results  may  vary materially from those expected or projected.  These
forward-looking  statements  speak  only  as of the date of the document.  The
Company  expressly disclaims any obligation or undertaking to publicly release
any  updates or revisions to any forward-looking statement contained herein to
reflect  any change in the Company's expectations with regard to any change in
events,  conditions  or  circumstances  on  which any such statement is based.


<PAGE>
ITEM  8.          FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA



<TABLE>
<CAPTION>

                              SUMMIT FINANCIAL CORPORATION
                               CONSOLIDATED BALANCE SHEETS
                                 (Dollars in Thousands)


                                                            December 31,   December 31,
                                                                1997           1996
                                                           --------------  -------------
<S>                                                        <C>             <C>
ASSETS
Cash and interest-bearing deposits. . . . . . . . . . . .  $       6,441   $       6,026
Federal funds sold. . . . . . . . . . . . . . . . . . . .          2,920           3,000
Investment securities available for sale (amortized cost.         28,213          18,511
of $28,077 and $18,511)
Investments in stock of Federal Reserve Bank, Federal . .            708             634
Home Loan Bank and other, at cost
Loans, net of unearned income and net of allowance. . . .        117,027         101,205
for loan losses of $1,728 and $1,487
Premises and equipment, net of accumulated. . . . . . . .          2,360           2,502
depreciation and amortization of $1,399 and $1,167
Accrued interest receivable . . . . . . . . . . . . . . .          1,168             940
Other assets. . . . . . . . . . . . . . . . . . . . . . .          1,442           1,344
                                                           --------------  -------------
                                                           $     160,279   $     134,162
                                                           ==============  =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand . . . . . . . . . . . . . . .  $      17,679   $      17,484
 Interest-bearing demand. . . . . . . . . . . . . . . . .          6,249           6,227
 Savings and money market . . . . . . . . . . . . . . . .         37,355          23,366
 Time deposits, $100,000 and over . . . . . . . . . . . .         29,495          25,393
 Other time deposits. . . . . . . . . . . . . . . . . . .         50,150          45,335
                                                           --------------  -------------
                                                                 140,928         117,805
Securities sold under repurchase agreements . . . . . . .            803             761
Other borrowings. . . . . . . . . . . . . . . . . . . . .          3,000           2,550
Accrued interest payable. . . . . . . . . . . . . . . . .          1,370             823
Other liabilities . . . . . . . . . . . . . . . . . . . .            809             586
                                                           --------------  -------------
     Total liabilities. . . . . . . . . . . . . . . . . .        146,910         122,525
                                                           --------------  -------------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000 shares . . . .          1,438           1,335
authorized; 1,438,424 and 1,334,409 shares issued
and outstanding
 Additional paid-in capital . . . . . . . . . . . . . . .         12,346          10,254
 Retained earnings. . . . . . . . . . . . . . . . . . . .              -              48
 Nonvested restricted stock . . . . . . . . . . . . . . .           (505)              -
 Unrealized net gain on investment securities . . . . . .             90               -
 available for sale, net of income taxes                   --------------  --------------
     Total shareholders' equity . . . . . . . . . . . . .         13,369          11,637
Commitments and contingencies
                                                           --------------  --------------
                                                           $     160,279   $     134,162
                                                           ==============  =============
<FN>

See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                            SUMMIT FINANCIAL CORPORATION
                          CONSOLIDATED STATEMENTS OF INCOME
                    (Dollars in Thousands, except Per Share Data)


                                                  For the Years Ended December 31,
                                               ------------------------------------
                                                  1997         1996         1995
                                               -----------  -----------  -----------
<S>                                            <C>          <C>          <C>
Interest Income:
 Interest on loans. . . . . . . . . . . . . .  $   11,491   $    8,924   $    6,410
 Interest on taxable securities . . . . . . .       1,173        1,241          953
 Interest on nontaxable securities. . . . . .         135           29            -
 Interest on federal funds sold . . . . . . .         410          207          219
 Other interest income. . . . . . . . . . . .         172          146          154
                                               -----------  -----------  -----------
                                                   13,381       10,547        7,736
                                               -----------  -----------  -----------
Interest Expense:
 Interest on deposits . . . . . . . . . . . .       6,140        4,753        3,575
 Interest expense on other borrowings . . . .         264          211          185
                                               -----------  -----------  -----------
                                                    6,404        4,964        3,760
                                               -----------  -----------  -----------
Net interest income . . . . . . . . . . . . .       6,977        5,583        3,976
Provision for loan losses . . . . . . . . . .        (392)        (516)        (277)
                                               -----------  -----------  -----------
Net interest income after provision . . . . .       6,585        5,067        3,699
for loan losses                                -----------  -----------  -----------
Other Income:
 Service charges and fees on deposit accounts         194          174          136
 Credit card fees and income. . . . . . . . .         248          217          167
 Insurance commissions. . . . . . . . . . . .         193          182           63
 Other income . . . . . . . . . . . . . . . .         400          407          245
                                               -----------  -----------  -----------
                                                    1,035          980          611
                                               -----------  -----------  -----------
Other Expenses:
 Salaries, wages and benefits . . . . . . . .       2,726        2,311        1,711
 Occupancy. . . . . . . . . . . . . . . . . .         442          395          314
 Furniture, fixtures and equipment. . . . . .         448          410          348
 Other operating expenses . . . . . . . . . .       1,534        1,285        1,096
                                               -----------  -----------  -----------
                                                    5,150        4,401        3,469
                                               -----------  -----------  -----------
Net income before income taxes. . . . . . . .       2,470        1,646          841
Provision for income taxes. . . . . . . . . .        (895)        (644)        (312)
                                               -----------  -----------  -----------
Net income. . . . . . . . . . . . . . . . . .  $    1,575   $    1,002   $      529
                                               ===========  ===========  ===========

Net income per common share:
  Basic . . . . . . . . . . . . . . . . . . .  $     1.11   $     0.72   $     0.38
  Diluted . . . . . . . . . . . . . . . . . .  $     1.01   $     0.66   $     0.36
Average shares outstanding:
  Basic . . . . . . . . . . . . . . . . . . .   1,413,000    1,399,000    1,397,000
  Diluted . . . . . . . . . . . . . . . . . .   1,561,000    1,509,000    1,475,000
<FN>

See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

                                                SUMMIT FINANCIAL CORPORATION
                                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                    FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
                                                   (Dollars in Thousands)


                                            Common   Additional    Retained    Unrealized net    Nonvested        Total
                                             Stock     paid-in     earnings    gain (loss) on   restricted    shareholders'
                                                       capital                   investment        stock         equity
                                                                                 securities
                                                                                 available
                                                                               for sale, net
                                            --------  ----------  ----------   ---------------  -----------  ---------------
<S>                                         <C>      <C>          <C>         <C>               <C>          <C>
Balance at December 31, 1994 . . . . . . .  $ 1,207  $     8,878          -             ($239)           -   $        9,846
Net income for the year ended. . . . . . .        -            -        529                 -            -              529
 December 31, 1995
Change in unrealized net gain (loss) on. .        -            -          -               293            -              293
 investment securities available for sale,
 net of income taxes
Issuance of 5% stock distribution. . . . .       61          464       (525)                -            -                -
Cash in lieu of fractional shares from . .        -            -         (4)                -            -               (4)
 stock distribution                         --------  -----------  ---------   ---------------    ----------  --------------
Balance at December 31, 1995 . . . . . . .    1,268        9,342          -                54            -           10,664
Net income for the year ended. . . . . . .        -            -      1,002                 -            -            1,002
 December 31, 1996
Change in unrealized net gain (loss) on. .        -            -          -               (54)           -              (54)
 investment securities available for sale,
 net of income taxes
Employee stock options exercised . . . . .        4           24          -                 -            -               28
Issuance of 5% stock distribution. . . . .       63          888       (951)                -            -                -
Cash in lieu of fractional shares from . .        -            -         (3)                -            -               (3)
 stock distribution                         --------  -----------   --------    ---------------   -----------  -------------
Balance at December 31, 1996 . . . . . . .    1,335       10,254         48                 -            -           11,637
Net income for the year ended. . . . . . .        -            -      1,575                 -            -            1,575
 December 31, 1997
Change in unrealized net gain (loss) on. .        -            -          -                90            -               90
 investment securities available for sale,
 net of income taxes
Employee stock options exercised . . . . .       11           61          -                 -            -               72
Issuance of common stock pursuant to . . .       24          481          -                 -         (505)               -
 restricted stock plan
Issuance of 5% stock distribution. . . . .       68        1,550     (1,618)                -            -                -
Cash in lieu of fractional shares from . .        -            -         (5)                -            -               (5)
 stock distribution                         -------  -----------  ----------  ----------------  -----------  ---------------
 BALANCE AT DECEMBER 31, 1997. . . . . . .  $ 1,438  $    12,346  $       -   $            90        ($505)  $       13,369
                                            =======  ===========  ==========  ================  ===========  ===============
<FN>

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

                                                             For the Years Ended December 31,
                                                             --------------------------------
                                                               1997       1996       1995
                                                             ---------  ---------  ---------
<S>                                                          <C>        <C>        <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . .  $  1,575   $  1,002   $    529
Adjustments to reconcile net income to net cash
provided by operating activities:
  Provision for loan losses . . . . . . . . . . . . . . . .       392        516        277
  Depreciation and amortization . . . . . . . . . . . . . .       487        424        292
  (Gain) loss on sale and disposal of equipment . . . . . .       (23)         -          1
  Net amortization (accretion) of net premium . . . . . . .        26         23         (8)
(discount) on investment securities
  Increase in accrued interest receivable . . . . . . . . .      (228)      (160)      (228)
  Increase in other assets. . . . . . . . . . . . . . . . .      (276)      (450)      (406)
  Increase in accrued interest payable. . . . . . . . . . .       547        104        353
  Increase (decrease)in other liabilities . . . . . . . . .       176       (187)       380
  Deferred income taxes . . . . . . . . . . . . . . . . . .        23       (131)       (52)
                                                             ---------  ---------  ---------
     Net cash provided by operating activities. . . . . . .     2,699      1,141      1,138
                                                             ---------  ---------  ---------
Cash flows from investing activities:
  Purchases of securities held to maturity. . . . . . . . .         -          -       (512)
  Proceeds from maturities of securities held to maturity .         -          -        208
  Purchases of securities available for sale. . . . . . . .   (18,953)    (8,693)    (9,606)
  Proceeds from sales of securities available for sale. . .     3,271        750          -
  Proceeds from maturities of securities available for sale     6,091      9,405      5,700
  Purchases of investments in FHLB and other stock. . . . .       (74)      (122)       (14)
  Net increase in loans . . . . . . . . . . . . . . . . . .   (15,715)   (25,922)   (14,940)
  Purchases of finance loans receivable . . . . . . . . . .      (499)    (1,154)      (532)
  Purchases of premises and equipment . . . . . . . . . . .      (208)       (85)    (1,833)
  Proceeds from sale of premises and equipment. . . . . . .        41          -          -
                                                             ---------  ---------  ---------
     Net cash used by investing activities. . . . . . . . .   (26,046)   (25,821)   (21,529)
                                                             ---------  ---------  ---------
Cash flows from financing activities:
  Net increase in deposit accounts. . . . . . . . . . . . .    23,123     18,486     31,971
  Net increase (decrease) in securities sold under. . . . .        42       (800)    (2,143)
repurchase agreements
  Proceeds from other borrowings. . . . . . . . . . . . . .     1,500      2,550          -
  Repayments of other borrowings. . . . . . . . . . . . . .    (1,050)    (2,000)         -
  Proceeds from employee stock options exercised. . . . . .        72         28          -
  Cash paid in lieu of fractional shares. . . . . . . . . .        (5)        (3)        (4)
                                                             ---------  ---------  ---------
     Net cash provided by financing activities. . . . . . .    23,682     18,261     29,824
                                                             ---------  ---------  ---------
Net increase (decrease) in cash and cash equivalents. . . .       335     (6,419)     9,433
Cash and cash equivalents, beginning of period. . . . . . .     9,026     15,445      6,012
                                                             ---------  ---------  ---------
Cash and cash equivalents, end of period. . . . . . . . . .  $  9,361   $  9,026   $ 15,445
                                                             =========  =========  =========
<FN>

See  accompanying  notes  to  consolidated  financial  statements.

</TABLE>

<PAGE>


                         SUMMIT FINANCIAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


     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.  In 1997, the Bank incorporated Summit
Investment Services, Inc. as a wholly-owned subsidiary to provide an increased
level  of  nondeposit  products  and  financial  management  services.

     Through its bank subsidiary, which commenced operations in July 1990, the
Company  provides  a full range of banking services, including demand and time
deposits,  commercial  and  consumer loans, and investment services.  The Bank
currently  has  two  full-service branches in Greenville, South Carolina.  The
Finance  Company  commenced operations in November 1994 and makes and services
small,  short-term  installment loans and related credit insurance products to
individuals  from  its  twelve  offices  throughout  South  Carolina.

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
     The  following  is  a  description  of  the  more  significant accounting
policies  used  in  preparing  the  consolidated  financial  statements.   The
accounting and reporting policies of the Company conform to generally accepted
accounting  principles  ("GAAP")  and  to general practices within the banking
industry.    The  preparation  of financial statements in conformity with GAAP
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,  they  affect  the reported amounts of income and
expense  during  the reporting period.  Actual results could differ from these
estimates  and  assumptions.

PRINCIPLES  OF  CONSOLIDATION    -    The  accompanying consolidated financial
statements  include  the  accounts  of  the  Company  and  its  wholly-owned
subsidiaries,  the Bank and the Finance Company.  All significant intercompany
accounts  and  transactions  have  been  eliminated  in  consolidation.

INVESTMENT  SECURITIES    -    Investment securities are classified into three
categories as follows:  (1) Investments Held to Maturity: securities which the
enterprise  has the positive intent and ability to hold to maturity, which are
reported at amortized cost; (2) Trading Securities: securities that are bought
and held principally for the purpose of selling them in the near future, which
are  reported  at  fair  value  with  unrealized  gains and losses included in
earnings;  and (3) Investments Available for Sale: securities that may be sold
under  certain  conditions,  which are reported at fair value, with unrealized
gains  and  losses excluded from earnings and reported as a separate component
of  shareholders'  equity,  net of income taxes.  The amortization of premiums
and  accretion  of  discounts  on  investment  securities  are  recorded  as
adjustments  to  interest  income.    Gains  or  losses on sales of investment
securities  are  based on the net proceeds and the adjusted carrying amount of
the  securities  sold,  using  the specific identification method.  Unrealized
losses  on  securities,  reflecting a decline in value or impairment judged by
the  Company  to  be  other  than  temporary,  are  charged  to  income in the
consolidated  statements  of  income.

LOANS  AND  INTEREST  INCOME    -   Loans of the Bank are carried at principal
amounts, net of unearned income, reduced by an allowance for loan losses.  The
Bank  recognizes  interest  income  daily  based  on  the  principal  amount
outstanding  using  the  simple  interest  method.  The accrual of interest is
generally  discontinued  on loans of the Bank which become 90 days past due as
to  principal  or  interest  or  when  management  believes, after considering
economic  and  business conditions and collection efforts, that the borrower's
financial  condition is such that collection of interest is doubtful.  Amounts
received  on nonaccrual loans generally are applied against principal prior to
the  recognition  of  any  interest  income.  Generally, loans are restored to
accrual  status  when  the  obligation  is  brought  current, has performed in
accordance  with the contractual terms for a reasonable period of time and the
ultimate  collectibility of the total contractual principal and interest is no
longer  in  doubt.

     Loans of the Finance Company are carried at the gross amount outstanding,
reduced by unearned interest, insurance income and other deferred fees, and an
allowance  for  loan  losses.   Unearned interest and fees are deferred at the
time  the  loans are made and accreted to income on a collection method, which
approximates  the  level yield method.  Charges for late payments are credited
to  income  when  collected.

IMPAIRMENT  OF LOANS  -  The Company accounts for impaired loans in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting
by  Creditors  for  Impairment  of  a  Loan".  This standard requires that all
creditors  value  loans  at  the  loan's fair value if it is probable that the
creditor  will  be unable to collect all amounts due according to the terms of
the loan agreement.  Fair value may be determined based upon the present value
of  expected  cash  flows,  the market price of the loan, if available, or the
value  of  the  underlying collateral.  Expected cash flows are required to be
discounted at the loan's effective interest rate.  SFAS No. 114 was amended by
SFAS  No.  118 which allows a creditor to use existing methods for recognizing
interest  income on an impaired loan and requires additional disclosures about
how a creditor recognizes interest income on an impaired loan. The adoption of
the standards required no increase in the allowance for loan losses and had no
impact  on  net  income  in  the  year  of  adoption.

     Under  SFAS  No.  114,  as  amended  by  SFAS  No. 118, when the ultimate
collectibility  of  an  impaired  loan's  principal  is  in  doubt,  wholly or
partially,  all  cash receipts are applied to principal.  When this doubt does
not  exist,  cash receipts are applied under the contractual terms of the loan
agreement  first  to principal and then to interest income.  Once the recorded
principal  balance  has been reduced to zero, future cash receipts are applied
to  interest  income,  to  the  extent  that  any  interest has been foregone.
Further  cash  receipts  are  recorded as recoveries of any amounts previously
charged  off.

     A  loan  is  also  considered  impaired  if  its  terms are modified in a
troubled  debt  restructuring  after  January  1,  1995.    For these accruing
impaired  loans, cash receipts are typically applied to principal and interest
receivable  in  accordance  with the terms of the restructured loan agreement.
Interest  income  is  recognized  on  these  loans using the accrual method of
accounting.    As  a  practical  matter,  the  Bank determines which loans are
impaired  through  a  loan  review  process.

ALLOWANCE  FOR  LOAN  LOSSES   -  The allowance for loan losses is established
through  a  provision  for  loan  losses charged to operations and reflects an
amount that, in management's opinion, is adequate to absorb inherent losses in
the  existing portfolio.  Additions to the allowance are based on management's
evaluation  of the loan portfolio under current economic conditions, past loan
loss  experience,  and  such  other  factors which, in management's judgement,
deserve  recognition  in  estimating  loan  losses.

     Loans are charged-off when, in the opinion of management, they are deemed
to  be uncollectible.  Recognized losses are charged against the allowance and
subsequent  recoveries  are added to the allowance.  While management uses the
best  information  available  to  make  evaluations, future adjustments to the
allowance  may  be  necessary if economic conditions differ substantially from
the assumptions used in making the evaluations.  The allowance for loan losses
is subject to periodic evaluation by various regulatory authorities and may be
subject to adjustments based upon information that is available to them at the
time  of  their  examination.

LOAN  FEES  -  Loan origination fees and direct costs of loan originations are
deferred and recognized as an adjustment of yield by the interest method based
on  the  contractual terms of the loan.  Loan commitment fees are deferred and
recognized  as  an adjustment of yield over the related loan's life, or if the
commitment  expires  unexercised,  recognized  in  income  upon  expiration.

PREMISES  AND  EQUIPMENT    -   Premises and equipment are stated at cost less
accumulated depreciation and amortization.  Depreciation is recorded using the
straight-line  method  over the estimated useful life of the related assets as
follows:  building, 40 years; furniture and fixtures, 7 years; equipment, 5 to
7  years;  and  vehicles,  3 years.  Amortization of leasehold improvements is
recorded  using  the  straight-line  method  over  the lesser of the estimated
useful  life of the asset or the term of the lease.  Additions to premises and
equipment  and  major  replacements  or  betterments  are  added  at  cost.
Maintenance,  repairs  and minor replacements are charged to operating expense
as  incurred.   When assets are retired or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts and any gain or loss is
reflected  in  income.

INTANGIBLE  ASSETS  -  Intangible assets are included in "Other assets" on the
accompanying  consolidated  balance  sheets  and  have unamortized balances of
$811,000  and  $787,000  at  December  31,  1997  and 1996, respectively, with
related  amortization  of  $154,000; $106,000; and $37,000 for the years ended
December  31,  1997,  1996, and 1995, respectively.  Intangible assets consist
primarily  of goodwill and customer lists resulting from the Finance Company's
branch  acquisitions.  On an ongoing basis, the Company evaluates the carrying
value of these intangible assets and determines whether these assets have been
impaired  based  upon  an  undiscounted  cash  flow approach.  Amortization of
intangibles  is  provided by using the straight-line method over the estimated
economic  lives  of  the  assets,  which  is  generally  from  5  -  7  years.

INCOME  TAXES    -  Income taxes are accounted for in accordance with SFAS No.
109,  "Accounting  for Income Taxes".  Under the asset and liability method of
SFAS  No.  109,  deferred  tax  assets  and liabilities are recognized for the
future  tax  consequences  attributable  to  differences between the financial
statement  carrying  amounts  of  existing  assets  and  liabilities and their
respective  tax bases.  Deferred tax assets and liabilities are measured using
the  enacted  rates  expected to apply to taxable income in the years in which
those  temporary  differences  are expected to be recovered or settled.  Under
SFAS No. 109, the effect on deferred tax assets and liabilities of a change in
tax  rates  is  recognized in income in the period that includes the enactment
date.    Valuation allowances are established to reduce deferred tax assets if
it  is determined to be "more likely than not" that all or some portion of the
potential  deferred  tax  asset  will  not  be  realized.

STOCK-BASED  COMPENSATION    -    SFAS  No.  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 has chosen to adopt the disclosure-only provisions of SFAS No. 123 and
continue  to  account  for  stock-based compensation using the intrinsic value
method  prescribed  in  Accounting  Principles  Board  Opinion ("APB") No. 25,
"Accounting  for  Stock  Issued  to  Employees",  and related interpretations.
Accordingly, compensation cost for stock options is measured 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.

PER SHARE DATA  -  Earnings per share are computed in accordance with SFAS No.
128,  "Earnings  per  Share".  SFAS No. 128 replaces APB Opinion 15, "Earnings
per  Share",  and  simplifies the computation of earnings per share ("EPS") by
replacing  the  presentation  of primary EPS with a presentation of basic EPS.
Basic EPS includes no dilution and is computed by dividing income available to
common  shareholders  by  the  weighted-average  number  of  common  shares
outstanding  for  the  period.  Diluted EPS reflects the potential dilution of
securities  that  could  share  in  the earnings of the Company.  Common stock
equivalents  included  in the diluted EPS computation consist of stock options
which  are computed using the treasury stock method.  Share and per share data
have  been  restated  to  reflect  all  5%  stock  distributions.

INVESTMENTS  REQUIRED  BY  LAW  -  Investments in stock of the Federal Reserve
Bank  and  the  Federal  Home  Loan  Bank  of  Atlanta are required by law for
financial  institutions  which  are  members of those organizations.  No ready
market exists for these stocks and they have no quoted market value.  However,
redemption  of these stocks have historically been at par value.  Accordingly,
the  carrying  amounts  were deemed to be a reasonable estimate of fair value.

RECLASSIFICATIONS   -  Certain minor amounts in the 1996 and 1995 consolidated
financial  statements  have  been  reclassified  to  conform  with  the  1997
presentations.   These reclassifications had no impact on shareholders' equity
or  net  income  as  previously  reported.

NOTE  2  -  STATEMENT  OF  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,
overnight  investments and short-term investments with maturities of less than
three months.  The Company considers the amounts included in the balance sheet
line  items,  "Cash and interest-bearing deposits" and "Federal funds sold" to
be  cash  and  cash  equivalents.    These  accounts  totaled  $9,361,000  and
$9,026,000  at  December  31,  1997  and  1996,  respectively.

     The  following summarizes supplemental cash flow data for the years ended
December  31:

<TABLE>
<CAPTION>



(dollars in thousands)                     1997    1996     1995
<S>                                       <C>     <C>      <C>
Interest paid. . . . . . . . . . . . . .  $5,857  $4,860   $3,407
Income taxes paid. . . . . . . . . . . .   1,065     801      496
Change in market value of investment
 securities, net of income taxes . . . .      90     (54)     293
One time reclassification of securities
from held to maturity to . . . . . . . .       -       -    5,751
available for sale
</TABLE>




NOTE  3  -  INVESTMENT  SECURITIES
     The amortized cost and market values of investments available for sale at
December  31  are  presented  in  the  following  table:

<TABLE>
<CAPTION>



(dollars in thousands)         1997       1997      1997      1997       1996       1996      1996      1996
                                        Unreal-    Unreal-                        Unreal-    Unreal-
                            Amortized     ized      ized     Market   Amortized     ized      ized     Market
                               Cost      Gains     Losses     Value      Cost      Gains     Losses     Value
                            ----------  --------  --------  --------  ----------  --------  ---------  -------
<S>                         <C>         <C>       <C>        <C>      <C>         <C>       <C>        <C>
U.S. Treasury due:
  Within 1 year...........  $    1,500  $      2  $      -   $ 1,502  $    2,001  $      4  $      -   $ 2,005
  After 1, within 5. . . .       1,249         -        (1)    1,248       3,495         5       (11)    3,489
  years
U.S. Government
Agencies due:
  Within 1 year...........       1,250         -        (1)    1,249       2,251         4        (1)    2,254
  After 1, within 5. . . .       6,033        30         -     6,063       5,989        39        (8)    6,020
  years
  After 5, within 10 . . .       3,765        27         -     3,792         393                 (20)      373
  years                                                                                  -
Mortgage-backed
securities:
  5 - 7 year balloon
  maturing within 7 years.       2,517         1        (3)    2,515       2,415         -       (22)    2,393
  Maturing beyond 10 . . .       4,721        28       (13)    4,736       1,341        12               1,353
  years                                                                                            -
Municipal securities:
  Maturing after 5,
  within 10 years.........       1,728        15       (30)    5,377         426         1        (3)      424
  Maturing beyond 10 . . .       5,314        93       (30)    5,377         200         -         -       200
  years                     ----------  --------  ---------  -------  ----------  --------  ---------
                            $   28,077  $    196      ($60)  $28,213  $   18,511  $     65      ($65)  $18,511
                            ==========  ========  =========  =======  ==========  ========  =========  =======

</TABLE>

      Investment securities with an aggregate carrying value and market value
of  approximately  $10,387,000  and $10,435,000, respectively, at December 31,
1997  were pledged to secure public deposits, securities sold under repurchase
agreements,  and  for  other  purposes  as  required  or  permitted  by  law.

     In  1997,  the  Company  sold  securities  from  its  available  for sale
portfolio for aggregate proceeds of $3,271,000 and recorded a net gain on sale
of  $1,000.   In 1996, the Company sold securities from its available for sale
portfolio  for  total  proceeds of $749,500 and recorded a net gain on sale of
$460.    There  were  no  sales  of  securities  in  1995.



NOTE  4  -  LOANS  AND  ALLOWANCE  FOR  LOAN  LOSSES
     A  summary  of  loans  by  classification  at  December 31 is as follows:



<TABLE>
<CAPTION>



(dollars in thousands)                       1997       1996
<S>                                        <C>        <C>
Commercial. . . . . . . . . . . . . . . .  $ 25,313   $ 21,775
Real estate - commercial. . . . . . . . .    41,172     33,475
Real estate - residential . . . . . . . .    37,683     33,140
Construction. . . . . . . . . . . . . . .     3,685      4,518
Installment and other consumer loans. . .     7,819      7,031
Consumer finance, net of unearned income.     2,792      2,526
Other loans and overdrafts. . . . . . . .       291        227
                                           ---------  ---------
                                            118,755    102,692
Less - allowance for loan losses. . . . .    (1,728)    (1,487)
                                           ---------  ---------
                                           $117,027   $101,205
                                           =========  =========
</TABLE>



     There  were  no  loans  on  nonaccrual  at  December  31, 1997.  Loans on
nonaccrual  at  December  31,  1996    totaled $110,000 or .10% of outstanding
loans.    If  interest on nonaccrual loans had been accrued for the year ended
December 31, 1996, such income would have approximated $1,800.  Loans past due
in  excess  of  90  days  amounted  to  approximately  $82,000 and $200,000 at
December  31,  1997 and 1996, respectively.  There were no foreclosed loans or
other  real  estate owned in any year presented.  There were no impaired loans
at  or  for  the year ended December 31, 1997.  At December 31, 1996, one loan
totaling  $110,000  was  considered impaired under the definitions of SFAS No.
114.    The related impairment allowance at December 31, 1996 was zero and the
average  impaired  loans  during  1996  was  $27,500.

     The Company makes loans to individuals and small- to mid-sized businesses
for various personal and commercial purposes primarily in the Upstate of South
Carolina.  The Company has a diversified loan portfolio and the Company's loan
portfolio is not dependent upon any specific economic segment.  As of December
31,  1997  the Company had no significant concentrations of credit risk in its
loan  portfolio  other  than  most  loans being located in the same geographic
region.

     The  following  is a summary of activity in the allowance for loan losses
for  the  years  ended  December  31:

<TABLE>
<CAPTION>



(dollars in thousands)                1997     1996     1995
<S>                                  <C>      <C>      <C>
Balance, beginning of year. . . . .  $1,487   $1,068   $  822
    Provision for losses. . . . . .     392      516      277
    Charge-offs . . . . . . . . . .    (428)    (387)     (90)
    Recoveries. . . . . . . . . . .     251      233       32
    Allocation for purchased loans.      26       57       27
                                     -------  -------  -------
Balance, end of year. . . . . . . .  $1,728   $1,487   $1,068
                                     =======  =======  =======
</TABLE>



     During  1997,  the  Company  purchased  approximately  $499,000,  net  of
unearned  income,  in  consumer  finance loans receivable from unrelated third
parties.

     Directors,  executive  officers,  and  associates  of  such  persons were
customers  of  and had transactions with the Company in the ordinary course of
business.    Included  in  such  transactions  are  outstanding  loans  and
commitments,  all  of  which  were  made under normal credit terms and did not
involve  more  than  the  normal risk of collectibility.  The aggregate dollar
amount  of these outstanding loans was approximately $6,935,000 and $6,300,000
at  December  31,  1997  and  1996,  respectively.  During 1997, new loans and
advances  on  lines  of  credit  of  approximately  $6,209,000  were made, and
payments  on  these  loans  and  lines  totaled  approximately $5,574,000.  At
December  31,  1997,  there  were  commitments  to extend additional credit to
related  parties  in  the  amount  of  approximately  $4,557,000.

NOTE  5  -  PREMISES  AND  EQUIPMENT
     A  summary  of  premises  and  equipment  at  December  31 is as follows:

<TABLE>
<CAPTION>



(dollars in thousands)              1997      1996
<S>                               <C>       <C>
Land . . . . . . . . . . . . . .  $   483   $   483
Building . . . . . . . . . . . .    1,254     1,254
Leasehold improvements . . . . .      434       434
Computer, office equipment . . .    1,017       947
Furniture and fixtures . . . . .      477       471
Vehicles . . . . . . . . . . . .       94        80
                                  --------  --------
                                    3,759     3,669
Less - accumulated depreciation.   (1,399)   (1,167)
                                  --------  --------
                                  $ 2,360   $ 2,502
                                  ========  ========
</TABLE>


NOTE  6  -  DEPOSITS
     Time  deposits  by  maturity  at  December  31  consist of the following:

<TABLE>
<CAPTION>



(dollars in thousands)              1997     1996
<S>                                <C>      <C>
Maturing within 1 year. . . . . .  $65,394  $58,542
Maturing after 1, within 5 years.   14,251   12,186
                                   -------  -------
                                   $79,645  $70,728
                                   =======  =======
</TABLE>



NOTE  7  -  BORROWED  FUNDS
     Short-term borrowings include federal funds purchased and securities sold
under  repurchase agreements.  There were no federal funds purchased at either
the  1997  or  1996  year end.  At December 31, 1997 and 1996, the Company had
securities  sold  under  repurchase agreements with customers in the amount of
$803,000  and  $761,000,  respectively.    Interest  rates on these repurchase
agreements  range  from  10  basis points to 25 basis points below the average
federal  funds sold rate and averaged 5.4% and 5.2%, respectively, during 1997
and  1996.    The  repurchase  agreements mature on a daily basis and rollover
under  a continuing contract.  Amounts under repurchase agreements are secured
by  U.S.  Government  agency  securities  with  a carrying and market value of
$1,000,000  and  $1,001,000, respectively, at December 31, 1997 and a carrying
and  market  value of $1,498,000 and $1,499,000, respectively, at December 31,
1996.    The  securities  underlying  the  repurchase  agreements were held in
safekeeping  by  an  authorized  broker.

     The  following  is  a  summary  of  the  average  amounts  outstanding of
securities  sold  under  repurchase  agreements  and  the  maximum  amounts
outstanding  at  any  month-end  for  each  of  the  years  ended December 31:

<TABLE>
<CAPTION>



(dollars in thousands)     1997    1996   1995
<S>                        <C>    <C>     <C>
Average outstanding . . .  $ 789  $1,277  $ 553
Maximum at any month-end.  $ 803  $1,745  $ 570
</TABLE>



     At  December  31,  1997,  the  Company  had outstanding advances from the
Federal  Home  Loan  Bank  of Atlanta (the "FHLB") totaling $2,000,000 through
Summit National Bank.  The advances bear interest at rates from 5.93% to 6.60%
and mature in $1,000,000 increments during January 1998.  The advances require
monthly  interest payments with the principal due at maturity.  These advances
are  secured  by  a  blanket  collateral  agreement with the FHLB pledging the
Bank's  portfolio  of  personal  first  mortgage  loans.

     In  addition  to the advances outstanding, at December 31, 1997, the Bank
had an available line of credit of $10,000,000 with the FHLB.  Borrowing under
this  arrangement  can  be made with various terms and repayment schedules and
with  fixed  or  variable rates of interest.  The blanket collateral agreement
which  the Company has with the FHLB pledging the Bank's portfolio of personal
first  mortgage  loans  as  collateral, pertains to any outstanding borrowings
under  this  line  of  credit,  in  addition  to  the current outstanding debt
previously  discussed.  Loans secured by available first mortgages at December
31,  1997  totaled  approximately  $25,471,000.

     In  addition,  at December 31, 1997, the Bank had unused short-term lines
of credit to purchase federal funds from unrelated banks totaling $10,000,000,
of  which  $9,000,000  is  on  an unsecured basis and the remaining $1,000,000
would  require  security  in  the  form  of U.S. Treasury or government agency
obligations.    The interest rate on any borrowings under these lines would be
the  prevailing  market  rate  for  federal  funds purchased.  These lines are
available on a short-term basis for general corporate purposes of the Bank and
have  specified  repayment  deadlines after disbursement of funds.  All of the
lenders  have  reserved  the  right  to  withdraw these lines at their option.

     During 1996, the Company entered into a line of credit arrangement with a
commercial  bank for funding the loans receivable of the Finance Company.  The
line,  which is for a total of $2.2 million, is secured by the common stock of
the  Bank  and  bears interest at the prime lending rate less 50 basis points.
The  line, which requires quarterly interest payments, was renewed in 1997 and
matures in October 1998.  Under the terms of the line, the Company is required
to  meet  certain  covenants,  including  minimum  capital  levels  and  other
performance  ratios.    The  Company  believes  it is in compliance with these
covenants.  There was no outstanding balance on the line at December 31, 1997.
At  December  31,  1996,  $50,000  was outstanding under the revolving line of
credit  and  $2.15  million  was  available.

     During  1996, the Finance Company entered into a term loan agreement with
an individual who is not affiliated with the Company or its subsidiaries.  The
$500,000  loan was renewed in 1997, matures in January 1998, bears interest at
a  fixed  rate  of  7.5%  and  is  unsecured.

     During  1997, the Company entered into separate term loan agreements with
two  individuals,  one  of  which  is  not  affiliated with the Company or its
subsidiaries  and  the other who is a director of the Company.  The loans bear
interest  at a fixed rate of 7.25%, are unsecured, and mature at various dates
in  1998.

     Other  borrowings  at  December  31  are  summarized  as  follows:

<TABLE>
<CAPTION>



(dollars in thousands)                                  1997    1996
<S>                                                    <C>     <C>
Federal Home Loan Bank advances . . . . . . . . . . .  $2,000  $2,000
Line of credit payable to a commercial bank due
 October 1997, bearing interest at 7.75% in 1996. . .       -      50
Term loan payable to an individual due January 1998,
 bearing interest at 7.50%. . . . . . . . . . . . . .     500     500
Term loan payable to an individual due February
 1998, bearing interest at 7.25%. . . . . . . . . . .     180       -
Term loan payable to an individual due March 1998,
 bearing interest at 7.25%. . . . . . . . . . . . . .     320       -
                                                       ------  ------
                                                       $3,000  $2,550
                                                       ======  ======
</TABLE>



NOTE  8  -  INCOME  TAXES
     A  reconciliation  of  expected  federal  tax  expense,  at the statutory
federal  tax rate of 34%, to consolidated effective income tax expense for the
years  ended  December  31  is  as  follows:

<TABLE>
<CAPTION>



(dollars in thousands)                 1997   1996    1995
<S>                                   <C>     <C>    <C>
Expected federal income tax expense.  $ 840   $ 560  $ 285
Adjustments to income tax:
   Change in beginning of year
    valuation allowance for
    deferred tax assets. . . . . . .     (3)      -     (3)
   State income tax, net of
    federal benefit. . . . . . . . .     49      29     20
   Other . . . . . . . . . . . . . .      9      55     10
                                      ------  -----  ------
Total. . . . . . . . . . . . . . . .  $ 895   $ 644  $ 312
                                      ======  =====  ======

</TABLE>



     Income  tax  expense  for  the  years  ended  December  31 is as follows:

<TABLE>
<CAPTION>



(dollars in thousands)                                       1997    1996    1995
<S>                                                          <C>    <C>     <C>
Current tax provision:
  Federal . . . . . . . . . . . . . . . . . . . . . . . . .  $ 798  $ 727   $ 334
  State . . . . . . . . . . . . . . . . . . . . . . . . . .     74     48      30
                                                             -----  ------  ------
                                                               872    775     364
                                                             -----  ------  ------
Deferred tax provision (benefit):
  Federal . . . . . . . . . . . . . . . . . . . . . . . . .     23   (131)    (52)
  State . . . . . . . . . . . . . . . . . . . . . . . . . .      -      -       -
                                                             -----  ------  ------
                                                                23   (131)    (52)
                                                             -----  ------  ------
Total tax provision . . . . . . . . . . . . . . . . . . . .  $ 895  $ 644   $ 312
                                                             =====  ======  ======
</TABLE>



   The sources and tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities
at December 31 are as follows:

<TABLE>
<CAPTION>



(dollars in thousands)                                        1997    1996
<S>                                                          <C>     <C>
Deferred tax assets:
  Allowance for loan losses deferred for tax purposes . . .  $ 559   $ 469
  Accrual-to-cash adjustment. . . . . . . . . . . . . . . .      4      17
  Depreciation for financial reporting in excess of amount.     12       2
for income tax reporting
  Other . . . . . . . . . . . . . . . . . . . . . . . . . .     26      28
                                                             ------  ------
          Gross deferred tax assets . . . . . . . . . . . .    601     516
          Less: valuation allowance . . . . . . . . . . . .    (25)    (28)
                                                             ------  ------
          Net deferred tax assets . . . . . . . . . . . . .    576     488
                                                             ------  ------
Deferred tax liabilities:
  Net deferred loan costs . . . . . . . . . . . . . . . . .    (35)    (49)
  Accumulated discount accretion. . . . . . . . . . . . . .      -      (6)
  Unrealized net gains on securities available for sale . .    (46)      -
  Compensation for tax purposes related to restricted . . .   (136)      -
stock plan, deferred for financial reporting
  Other . . . . . . . . . . . . . . . . . . . . . . . . . .      -      (5)
                                                             ------  ------
          Gross deferred tax liabilities. . . . . . . . . .   (217)    (60)
                                                             ------  ------
Net deferred tax asset. . . . . . . . . . . . . . . . . . .  $ 359   $ 428
                                                             ======  ======
</TABLE>



   A portion of the change in the net deferred tax asset relates to the
change in unrealized net losses and gains on securities available for sale.
The related current period deferred tax expense of $46,000 has been recorded
directly to shareholders' equity.  The balance of the change in the net
deferred tax asset results from the current period deferred tax expense.

   The valuation allowance for deferred income taxes as of January 1, 1997
was $28,000.  During 1997, the valuation allowance decreased $3,000 based on
actual earnings of the Company for that year which provided sufficient
justification to recognize that portion of the related deferred tax asset.
There was no net change in the total valuation allowance during 1996 which
totaled $28,000 at December 31, 1995 and 1996.  The valuation allowance, which
totaled $25,000 at December 31, 1997, is related to state net operating loss
carryforwards and is established as the Company is not certain that
realization of this portion of the net deferred tax asset is more likely than
not based on the historical lack of taxable income for state tax purposes.



NOTE  9  -  OTHER  INCOME  AND  OTHER  EXPENSES
     Other  income  for  the  years  ended  December  31  are  as  follows:

<TABLE>
<CAPTION>



(dollars in thousands)                1997   1996   1995
<S>                                   <C>    <C>    <C>
Late charges and other loan fees . .  $ 180  $ 152  $  82
Mortgage origination fees. . . . . .     55     52     60
Nondeposit product sales commission.    104    178     44
Other. . . . . . . . . . . . . . . .     61     25     59
                                      -----  -----  -----
                                      $ 400  $ 407  $ 245
                                      =====  =====  =====
</TABLE>



          Other  operating  expenses  for  the  years ended December 31 are as
follows:

<TABLE>
<CAPTION>



(dollars in thousands)                     1997    1996    1995
<S>                                       <C>     <C>     <C>
Advertising and public relations . . . .  $  256  $  171  $  146
Stationary, printing and office support.     317     262     182
Credit card service expense. . . . . . .     194     171     128
Deposit and branch expenses. . . . . . .     111     143     121
Legal and professional fees. . . . . . .     203     160     133
Insurance premiums and claims. . . . . .      97      86      70
Amortization of intangibles. . . . . . .     154     106      37
Other. . . . . . . . . . . . . . . . . .     202     186     279
                                          ------  ------  ------
                                          $1,534  $1,285  $1,096
                                          ======  ======  ======
</TABLE>



NOTE  10  -  COMMITMENTS
     The Bank leases one building under a noncancellable operating lease which
had  an  initial  term  of  five years and was renewed for a five year term in
April  1995.  The lease on the Bank building has an additional option to renew
under substantially the same terms with certain rate escalations.  The Finance
Company  branches are housed in leased facilities which have terms of from two
to  ten  years,  each  with  various renewal options and with monthly payments
ranging  from  $350  -  $1,250  per  month.

     Minimum  rental  commitments  under noncancellable leases at December 31,
1997,  exclusive  of  renewal  options, are as follows (dollars in thousands):

<TABLE>
<CAPTION>




<S>                       <C>
1998 . . . . . . . . . .  $200
1999 . . . . . . . . . .   163
2000 . . . . . . . . . .    75
2001 . . . . . . . . . .    22
2002 . . . . . . . . . .    15
2003 and beyond. . . . .    16
                          ----

Total minimum obligation  $491
                          ====
</TABLE>

         Rent expense included in the accompanying consolidated statements of
income under the caption "Occupancy" totaled $204,000, $180,000, and $154,000,
respectively,  for  the  years  ended  December  31,  1997,  1996,  and  1995.

NOTE  11  -  FINANCIAL  INSTRUMENTS  WITH  OFF-BALANCE  SHEET  RISK
     The Company is party to financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of its customers.
These  financial  instruments include commitments to extend credit and standby
letters  of  credit  and  involve,  to varying degrees, elements of credit and
interest  rate  risk  in excess of the amount recognized in the balance sheet.

     The  Company's  exposure to credit loss in the event of nonperformance by
the  other  party to the financial instrument for commitments to extend credit
and  standby  letters  of  credit is represented by the contractual amounts of
those  instruments.

     The  Company  uses  the  same  credit  and  collateral policies in making
commitments  and  conditional  obligations  as  it  does  for on-balance sheet
instruments.    The  Company  evaluates  each customer's creditworthiness on a
case-by-case  basis.  The amount of collateral obtained if deemed necessary by
the  Company  upon  extension  of  credit  is  based  on  management's  credit
evaluation.

     Commitments to extend credit are agreements to lend to a customer as long
as  there  is  no  violation  of  any  condition  established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and  may  require  payment of a fee.  Since many of the commitments may expire
without  being  drawn  upon,  the  total commitment amounts do not necessarily
represent  future  cash  requirements.

     At  December  31,  1997,  the  Company's commitments to extend additional
credit,  including  obligations  under  the  Company's  revolving  credit card
program,  totaled approximately $35,333,000, of which approximately $2,439,000
represents  commitments  to  extend  credit  at  fixed  rates  of  interest.
Commitments to extend credit at fixed rates exposes the Company to some degree
of  interest  rate  risk.

     Included  in  the  Company's  total  commitments  are  standby letters of
credit.   Letters of credit are commitments issued by the Company to guarantee
the  performance  of  a  customer  to  a third party and totaled $2,679,000 at
December 31, 1997.  The credit risk involved in the underwriting of letters of
credit  is  essentially the same as that involved in extending loan facilities
to  customers.


NOTE  12  -  PER  SHARE  INFORMATION
     On  December  30, 1997, the Company issued a 5% stock distribution in the
form  of a stock dividend.  The distribution was issued to all shareholders of
record  on  December 15, 1997 and resulted in the issuance of 68,296 shares of
common  stock  of the Company.  All average share and per share data have been
restated  to  reflect  this  stock  distribution  as  of  the  earliest period
presented.

     The  following  is  a reconciliation of the denominators of the basic and
diluted  per-share  computations  for  net  income.    There  was  no required
adjustment  to  the numerator from the net income reported on the accompanying
statements  of  income.



<TABLE>
<CAPTION>



                                   1997        1997        1996        1996        1995        1995
                                ----------  ----------  ----------  ----------  ----------  ----------
                                  Basic      Diluted      Basic      Diluted      Basic      Diluted
<S>                             <C>         <C>         <C>         <C>         <C>         <C>
Net income . . . . . . . . . .  $1,575,000  $1,575,000  $1,002,000  $1,002,000  $  529,000  $  529,000
                                ----------  ----------  ----------  ----------  ----------  ----------
Weighted average shares. . . .   1,412,806   1,412,806   1,399,493   1,399,493   1,397,144   1,397,144
Effect of Dilutive Securities:
    Stock options. . . . . . .           -     148,625           -     109,385           -      78,066
                                ----------  ----------  ----------  ----------  ----------  ----------
                                 1,412,806   1,561,431   1,399,493   1,508,878   1,397,144   1,475,210
                                ----------  ----------  ----------  ----------  ----------  ----------
Per-share amount . . . . . . .  $     1.11  $     1.01  $     0.72  $     0.66  $     0.38  $     0.36
                                ==========  ==========  ==========  ==========  ==========  ==========

</TABLE>


NOTE  13  -  STOCK  COMPENSATION  PLANS
     The  Company  has  a  Restricted  Stock  Plan  for  awards to certain key
employees.    Under  the  Restricted  Stock Plan, the Company may grant common
stock to its employees for up to 121,550 shares.  All shares granted under the
Restricted  Stock Plan are subject to restrictions as to continuous employment
for  a specified time period following the date of grant.  During this period,
the  holder is entitled to full voting rights and dividends.  The restrictions
as  to transferability of shares granted under this plan vest over a period of
5  years  at a rate of 20% on each anniversary date of the grant.  At December
31,  1997,  there  were  25,200  shares  (adjusted for stock distributions) of
restricted  stock  outstanding.    Deferred  compensation  representing  the
difference between the fair market value of the stock at the date of grant and
the cash paid for the stock is being amortized over a 5 year period commencing
in  1998  when  the  restrictions  begin  to  lapse.

     The  Company  has an Incentive Stock Option Plan and a Non-Employee Stock
Option Plan (collectively referred to as stock-based option plans).  Under the
Incentive  Stock Option Plan, options are periodically granted to employees at
a  price  not  less  than  the  fair market value of the shares at the date of
grant.    Options  granted  are exercisable for a period of ten years from the
date  of  grant and become exercisable at a rate of 20% each year on the first
five anniversaries of the date of grant.  The stock option plan authorizes the
granting  of  stock options up to a maximum of 345,718 shares of common stock,
adjusted  for  stock  distributions.

     Under the Non-Employee Stock Option Plan, options have been granted, at a
price  not less than the fair market value of the shares at the date of grant,
to  eligible directors as a retainer for their services as directors.  Options
granted  are  exercisable  for  a  period of ten years from the date of grant.
Options  granted on January 1, 1995 became exercisable one year after the date
of grant.  Options granted on January 1, 1996 become exercisable over a period
of  nine  years  at a rate of 11.1% on each of the first nine anniversaries of
the date of grant.  As of January 1, 1996, all 151,928 stock options (adjusted
for  stock  distributions)  authorized  to be granted under this plan had been
granted.

     The  following  is a summary of the activity under the stock-based option
plans  for  the  years  ended  December 31, 1997, 1996 and 1995 is as follows:



<TABLE>
<CAPTION>



                            1997      1997       1996      1996       1995      1995
                                    Weighted             Weighted             Weighted
                                     Average              Average              Average
                                    Exercise             Exercise             Exercise
                           Shares     Price     Shares     Price     Shares     Price
                          -------   ---------  --------  ---------  --------  ---------
<S>                       <C>       <C>        <C>       <C>        <C>       <C>
Outstanding, January 1 .  425,207   $   10.92  213,140   $    8.10  181,910   $    7.41
Granted. . . . . . . . .   27,405   $   15.05  226,373   $   13.48   34,581   $   11.51
Canceled . . . . . . . .   (6,097)  $   13.74  (10,370)  $    9.86   (3,351)  $    6.01
Exercised. . . . . . . .  (12,304)  $    5.90   (3,936)  $    6.93        -           -
                          -------   ---------  --------  ---------  --------  ---------
Outstanding, December 31  434,211   $   11.29  425,207   $   10.92  213,140   $    8.10
                          ========  =========  ========  =========  ========  =========
Exercisable, December 31  194,809   $    9.02  139,864   $    7.14   92,009   $    6.41
                          ========  =========  ========  =========  ========  =========
</TABLE>



    The following table summarizes information about stock options
outstanding under the stock-based option plans at December 31, 1997:

<TABLE>
<CAPTION>

                                 Options Outstanding                Options Exercisable
                           ------------------------------------    ---------------------
                              Number      Weighted-   Weighted-     Number     Weighted-
                              Options      Average     Average      Options     Average
                            Outstanding   Remaining    Exercise   Exercisable   Exercise
                               as of     Contractual    Price        as of       Price
Range of Exercise Prices:    12/31/97       Life                   12/31/97
-------------------------   ----------   -----------  ---------   ----------  ----------
<S>                         <C>          <C>          <C>         <C>          <C>
5.22  -  $7.05. . . . . .       82,478    3.1 years  $     5.80       81,967  $     5.79
8.03  -  $9.67. . . . . .       89,502    6.8 years  $     9.56       59,777  $     9.57
12.96 - $19.29. . . . . .      262,231    8.5 years  $    13.61       53,065  $    13.40
                            ----------   ----------  -----------  ----------- -----------
5.22  - $19.29. . . . . .      434,211    7.2 years  $    11.29      194,809  $     9.02
                            ===========  ===========  ==========  ===========  ==========
</TABLE>

      The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting  for Stock-Based Compensation".  Accordingly, no compensation cost
has been recognized for the stock option plans.  Had compensation cost for the
Company's  incentive and non-employee stock option plans been determined based
on  the  fair  value  at  the  grant  date  for awards in 1997, 1996, and 1995
consistent with the provisions of SFAS No. 123, the Company's net earnings and
diluted  earnings per share would have been reduced to the proforma amounts as
follows:

<TABLE>
<CAPTION>



(dollars, except per share, in thousands)   1997    1996   1995
<S>                                        <C>     <C>     <C>
Net earnings - as reported. . . . . . . .  $1,575  $1,002  $ 529
Net earnings - proforma . . . . . . . . .  $1,321  $  760  $ 475
Diluted earnings per share - as reported.  $ 1.01  $  .66  $ .36
Diluted earnings per share - proforma . .  $ 0.85  $  .50  $ .32
</TABLE>



     The  fair  value  of  each option grant is estimated on the date of grant
using  the  Black-Scholes  option-pricing model with the following assumptions
used  for  grants: expected volatility of 26.5%, 6.4%, and 4.6% for 1997, 1996
and 1995, respectively; risk-free interest rate of 5.70%, 6.21%, and 5.37% for
1997, 1996, and 1995, respectively; and expected lives of 6 years in all years
presented.    There  were  no  cash  dividends  in  any  year.

NOTE  14  -  EMPLOYEE  BENEFIT  PLAN
     The Company maintains an employee benefit plan for all eligible employees
of  the  Company and its subsidiaries under the provisions of Internal Revenue
Code Section 401K.  The Summit Retirement Savings Plan (the "Plan") allows for
employee  contributions  and,  upon annual approval of the Board of Directors,
the  Company  matches  employee contributions from one percent to a maximum of
six percent of deferred compensation.  The matching contributions were 4%, 2%,
and  1%  of  deferred  compensation  for 1997, 1996 and 1995, respectively.  A
total  of $61,000, $29,000, and $10,000, respectively, in 1997, 1996, and 1995
was  charged to operations for the Company's matching contribution.  Employees
are  immediately  vested  in  their contributions to the Plan and become fully
vested  in  the  employer  matching  contribution after five years of service.

NOTE  15  -  CASH,  DIVIDEND  AND LOAN RESTRICTIONS AND CONTINGENT LIABILITIES
     In  the normal course of business, the Company and its subsidiaries enter
into agreements, or are subject to regulatory requirements, that may result in
cash, debt and dividend restrictions.  A summary of the most restrictive items
follows.

     The  Company's banking subsidiary is required to maintain average reserve
balances  with  the  Federal Reserve Bank.  The amount of the required reserve
balance  for  the  year  ended  December  31,  1997  was  $465,000.

     The  ability  of  the  Company  to  pay  cash dividends is dependent upon
receiving cash in the form of dividends from the Bank.  The dividends that may
be  paid  by  the  Bank  to  the  Company are subject to legal limitations and
regulatory  capital  requirements.    Prior approval of the Comptroller of the
Currency is required if the total of all dividends declared by a national bank
in  any  calendar  year  exceeds  the  Bank's  net  profits (as defined by the
Comptroller)  for that year combined with its retained net profits (as defined
by  the Comptroller) for the two preceding calendar years.  As of December 31,
1997,  no  cash  dividends have been declared or paid by the Bank and the Bank
had  available  retained  earnings  of  $3.3  million.

     Under  Federal  Reserve  Board  regulations,  the  Bank is limited in the
amount  it  may loan to the Company or the Finance Company.  Loans made by the
Bank to a single affiliate may not exceed 10%, and loans to all affiliates may
not  exceed  20%  of  the Bank's capital, surplus and undivided profits, after
adding  back  the  allowance for loan losses.  Certain collateral restrictions
also  apply  to  loans  from  the  Bank  to  its  affiliates.

     In  the  normal  course of business, the Company and its subsidiaries are
periodically  involved  in  litigation.    In  the  opinion  of  the Company's
management,  none  of this litigation should have a material adverse effect on
the  accompanying  consolidated  financial  statements.

NOTE  16  -  CAPITAL  REQUIREMENTS  AND  REGULATORY
     The  Company  and  the  Bank  are  subject  to various regulatory capital
requirements  administered  by  the federal banking agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory and possibly
additional discretionary actions by regulators that, if undertaken, could have
a  material  effect  on  the  financial  statements.    Under capital adequacy
guidelines  and  the  regulatory  framework  for prompt corrective action, the
Company  and  the  Bank  must  meet  specific  capital guidelines that involve
quantitative  measures of the Company's and the Bank's assets, liabilities and
certain  off-balance  sheet  items  as  calculated under regulatory accounting
practices.    The  Company's and the Bank's capital amounts and classification
are  also subject to qualitative judgments by the regulators about components,
risk  weightings,  and  other  factors.

     Quantitative  measures  established  by  regulation  to  ensure  capital
adequacy  require  the  Company  and  the Bank to maintain minimum amounts and
ratios  (set  forth  in  the  table following) of total and Tier I capital (as
defined  in  the regulation) to risk-weighted assets (as defined) and to total
assets.    Management  believes, as of December 31, 1997, that the Company and
the  Bank  meet  all  capital adequacy requirements to which they are subject.

     At  December  31,  1997  and  1996,  the  Company  and  the Bank are both
categorized  as  "well  capitalized" under the regulatory framework for prompt
corrective  action.   To be categorized as "well capitalized", the Company and
the  Bank must maintain minimum total risk-based, Tier I risk-based and Tier I
leverage  ratios  as  set  forth in the table following.  There are no current
conditions  or  events  that management believes would change the Company's or
the  Bank's  category.

     The  following tables present the Company's and the Bank's actual capital
amounts  and  ratios  at  December  31,  1997  and 1996 as well as the minimum
calculated  amounts  for  each  regulatory  defined  category.


<TABLE>
<CAPTION>



                                                             For                 To Be
(dollars in thousands)                   Actual            Capital            Categorized
                                         ------           Adequacy               "Well
                                                          Purposes           Capitalized"
                                                          ---------          ------------
                                         Amount   Ratio    Amount    Ratio      Amount      Ratio
                                         ------   ------   -------   -----      -------     ------
<S>                                      <C>      <C>     <C>        <C>     <C>            <C>
AS OF DECEMBER 31, 1997
THE COMPANY
---------------------------------------
Total capital to risk-weighted assets .  $14,871  11.68%  $  10,187   8.00%  $      12,733  10.00%
Tier 1 capital to risk-weighted assets.  $13,279  10.43%  $   5,093   4.00%  $       7,640   6.00%
Tier 1 capital to average assets. . . .  $13,279   8.87%  $   5,986   4.00%  $       7,483   5.00%
THE BANK
---------------------------------------
Total capital to risk-weighted assets .  $13,307  10.68%  $   9,971   8.00%  $      12,464  10.00%
Tier 1 capital to risk-weighted assets.  $11,792   9.46%  $   4,985   4.00%  $       7,478   6.00%
Tier 1 capital to average assets. . . .  $11,792   8.02%  $   5,885   4.00%  $       7,356   5.00%

AS OF DECEMBER 31, 1996
THE COMPANY
---------------------------------------
Total capital to risk-weighted assets .  $13,124  12.17%  $   8,625   8.00%  $      10,781  10.00%
Tier 1 capital to risk-weighted assets.  $11,637  10.79%  $   4,312   4.00%  $       6,469   6.00%
Tier 1 capital to average assets. . . .  $11,637   9.54%  $   4,880   4.00%  $       6,100   5.00%
THE BANK
---------------------------------------
Total capital to risk-weighted assets .  $11,012  10.47%  $   8,416   8.00%  $      10,519  10.00%
Tier 1 capital to risk-weighted assets.  $ 9,712   9.23%  $   4,208   4.00%  $       6,311   6.00%
Tier 1 capital to average assets. . . .  $ 9,712   7.67%  $   5,064   4.00%  $       6,330   5.00%
</TABLE>



NOTE  17  -  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
     SFAS  No.  107,  "Disclosures about Fair Value of Financial Instruments",
requires  disclosure  of  fair value information, whether or not recognized in
the  statement  of financial position, when it is practicable to estimate fair
value.    SFAS  No. 107 defines a financial instrument as cash, evidence of an
ownership  interest in an entity, or contractual obligations which require the
exchange  of  cash  or  other  financial  instruments.    Certain  items  are
specifically  excluded  from  the  disclosure  requirements,  including  the
Company's  common  stock,  premises  and  equipment,  and  other  assets  and
liabilities.

     Fair  value  approximates  book  value  for  the  following  financial
instruments  due to the short-term nature of the instrument: cash and due from
banks,  interest-bearing  deposits in banks, federal funds sold, federal funds
purchased  and  securities  sold  under repurchase agreements, short-term FHLB
advances,  and  other  short-term  borrowings.    Fair  value  of  investment
securities  is  estimated  based  on quoted market prices where available.  If
quoted market prices are not available, fair values are based on quoted market
prices  of  comparable  instruments.

     Fair  value for variable rate loans that reprice frequently and for loans
that  mature in less that one year is based on the carrying value.  Fair value
of fixed rate real estate, consumer, commercial and other loans maturing after
one year is based on the discounted present value of the estimated future cash
flows.    Discount  rates  used  in  these  computations approximate the rates
currently  offered  for  similar loans of comparable terms and credit quality.

     Fair value for demand deposit accounts and interest-bearing accounts with
no fixed maturity date is equal to the carrying value.  Certificate of deposit
accounts maturing during 1998 are valued at their carrying value.  Certificate
of  deposit  accounts  maturing  after  1998 are estimated by discounting cash
flows  from  expected  maturities  using  current  interest  rates  on similar
instruments.

     Fair  value  for the Company's off-balance sheet financial instruments is
based  on  the  current  value  of  the  instruments  outstanding.

     The  Company  has used management's best estimate of fair values based on
the above assumptions.  Thus, the fair values presented may not be the amounts
which  could be realized in an immediate sale or settlement of the instrument.
In  addition,  any  income tax or other expenses which would be incurred in an
actual  sale or settlement are not taken into consideration in the fair values
presented.

     The  estimated  fair values of the Company's financial instruments are as
follows:

<TABLE>
<CAPTION>



(dollars in thousands)                 1997        1997        1996        1996
                                     Carrying    Estimated   Carrying    Estimated
                                      Amount    Fair Value    Amount    Fair Value
                                     --------   -----------  --------   -----------
<S>                                  <C>        <C>          <C>        <C>
Financial Assets:
Cash and interest-bearing deposits.  $   6,441  $     6,441  $   6,026  $     6,026
Federal funds sold. . . . . . . . .      2,920        2,920      3,000        3,000
Securities available for sale . . .     28,213       28,213     18,511       18,511
Loans receivable, net . . . . . . .    117,027      116,438    101,205      100,933
Financial Liabilities:
Deposits. . . . . . . . . . . . . .    140,928      141,181    117,805      117,896
Repurchase agreements . . . . . . .        803          803        761          761
Short-term FHLB advances. . . . . .      2,000        2,000      2,000        2,000
Other short-term borrowings . . . .      1,000        1,000        550          550
Off-Balance Sheet Instruments:
Commitments to extend credit. . . .     32,654       32,654     26,058       26,058
Standby letters of credit . . . . .      2,679        2,679      2,675        2,675
</TABLE>



NOTE  18  -  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)
     Consolidated  quarterly operating data for the years ended December 31 is
summarized  as  follows (per share data has been restated to reflect the stock
distributions  issued  and  restated for reporting in accordance with SFAS No.
128):


<TABLE>
<CAPTION>



(dollars in thousands, except     First      First     Second     Second      Third      Third     Fourth     Fourth
per share data)                  Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter
                                ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                  1997       1996       1997       1996       1997       1996       1997       1996
<S>                             <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Interest income. . . . . . . .  $  3,060   $  2,364   $  3,269   $  2,536   $  3,474   $  2,742   $  3,578   $  2,905
Interest expense . . . . . . .    (1,400)    (1,164)    (1,513)    (1,227)    (1,731)    (1,252)    (1,760)    (1,321)
                                ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net interest income. . . . . .     1,660      1,200      1,756      1,309      1,743      1,490      1,818      1,584
Provision for loan losses. . .       (87)       (82)      (124)      (103)       (45)      (128)      (136)      (203)
                                ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net interest income after
 provision for loan losses . .     1,573      1,118      1,632      1,206      1,698      1,362      1,682      1,381
Other income . . . . . . . . .       240        243        254        258        259        242        282        237
Other expenses . . . . . . . .    (1,274)    (1,093)    (1,255)    (1,044)    (1,281)    (1,081)    (1,340)    (1,183)
                                ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Income before taxes. . . . . .       539        268        631        420        676        523        624        435
Income taxes . . . . . . . . .      (199)      (102)      (231)      (160)      (244)      (202)      (221)      (180)
                                ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net income . . . . . . . . . .  $    340   $    166   $    400   $    260   $    432   $    321   $    403   $    255
                                =========  =========  =========  =========  =========  =========  =========  =========
Net income per share:
   Basic . . . . . . . . . . .  $   0.24   $   0.12   $   0.28   $   0.19   $   0.31   $   0.23   $   0.28   $   0.18
   Diluted . . . . . . . . . .  $   0.22   $   0.11   $   0.26   $   0.18   $   0.28   $   0.22   $   0.25   $   0.17
Averages common shares
 outstanding (in thousands):
   Basic . . . . . . . . . . .     1,409      1,398      1,411      1,398      1,412      1,398      1,420      1,401
   Diluted . . . . . . . . . .     1,524      1,478      1,519      1,482      1,537      1,481      1,633      1,511

</TABLE>


NOTE  19  -  CONDENSED  FINANCIAL  INFORMATION
     The  following  is  condensed  financial  information of Summit Financial
Corporation  (parent  company  only) at December 31, 1997 and 1996 and for the
years  ended  December  31,  1997,  1996  and  1995.

<TABLE>
<CAPTION>

                         SUMMIT FINANCIAL CORPORATION
                           CONDENSED BALANCE SHEETS

                                        December 31,
                                       ---------------
(dollars in thousands)                  1997     1996
<S>                                    <C>      <C>
ASSETS
Cash. . . . . . . . . . . . . . . . .  $    34  $    43
Investment in bank subsidiary . . . .   11,882    9,712
Investment in nonbank subsidiary. . .       67      154
Due from subsidiaries . . . . . . . .    1,930    1,801
Other assets. . . . . . . . . . . . .        3        5
                                       -------  -------
                                       $13,916  $11,715
                                       =======  =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accruals and other liabilities. . . .  $    47  $    28
Other borrowings. . . . . . . . . . .      500       50
Shareholders' equity. . . . . . . . .   13,369   11,637
                                       -------  -------
                                       $13,916  $11,715
                                       =======  =======
</TABLE>



<TABLE>
<CAPTION>
                        SUMMIT FINANCIAL CORPORATION
                        CONDENSED STATEMENTS OF INCOME

                                       For the Years Ended
                                          December 31,
                                      ---------------------
(dollars in thousands)                1997     1996     1995
<S>                                  <C>      <C>      <C>
Interest income . . . . . . . . . .  $  175   $  181   $ 161
Interest expense. . . . . . . . . .     (13)     (30)    (43)
                                     -------  -------  ------
Net interest income . . . . . . . .     162      151     118
Other operating expenses. . . . . .     (40)     (29)    (38)
                                     -------  -------  ------
Net operating income. . . . . . . .     122      122      80
Equity in undistributed net income
 of subsidiaries. . . . . . . . . .   1,493      924     479
                                     -------  -------  ------
Income before taxes . . . . . . . .   1,615    1,046     559
Income taxes. . . . . . . . . . . .     (40)     (44)    (30)
                                     -------  -------  ------
                                     $1,575   $1,002   $ 529
                                     =======  =======  ======
</TABLE>




<TABLE>
<CAPTION>

                          SUMMIT FINANCIAL CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS


                                                  For the Years Ended December 31,
                                                  --------------------------------
(dollars in thousands)                                 1997      1996     1995
<S>                                                  <C>       <C>       <C>
Operating activities:
Net income. . . . . . . . . . . . . . . . . . . . .  $ 1,575   $ 1,002   $ 529
Adjustments to reconcile net income to net cash:
Equity in undistributed net income of subsidiaries.   (1,493)     (924)   (479)
Decrease in other assets. . . . . . . . . . . . . .        -        21       6
Increase (decrease) in other liabilities. . . . . .       19       (51)     43
Deferred taxes. . . . . . . . . . . . . . . . . . .        2        25      (5)
                                                     --------  --------  ------
                                                         103        73      94
                                                     --------  --------  ------
INVESTING ACTIVITIES:
Net increase in due from subsidiary . . . . . . . .     (129)     (701)   (580)
Maturities of investment securities . . . . . . . .        -     2,000     950
Capital contribution to bank subsidiary . . . . . .     (500)   (1,000)      -
                                                     --------  --------  ------
                                                        (629)      299     370
                                                     --------  --------  ------
FINANCING ACTIVITIES:
Proceeds from notes payable . . . . . . . . . . . .      500        50     100
Repayments of notes payable . . . . . . . . . . . .      (50)     (600)      -
Net increase in due to subsidiary . . . . . . . . .        -         -    (503)
Employee stock options exercised. . . . . . . . . .       72        28       -
Cash paid in lieu of fractional shares. . . . . . .       (5)       (3)     (4)
                                                     --------  --------  ------
                                                         517      (525)   (407)
                                                     --------  --------  ------
Net change in cash and cash equivalents . . . . . .       (9)     (153)     57
Balance, beginning of year. . . . . . . . . . . . .       43       196     139
                                                    --------  --------  ------
Balance, end of year. . . . . . . . . . . . . . . .  $    34   $    43   $ 196
                                                     ========  ========  ======
</TABLE>




INDEPENDENT  AUDITORS'  REPORT

The  Board  of  Directors
Summit  Financial  Corporation

     We  have  audited  the accompanying consolidated balance sheets of Summit
Financial Corporation and subsidiaries (the "Company") as of December 31, 1997
and  1996,  and  the  related consolidated statements of income, shareholders'
equity  and  cash  flows  for each of the years in the three-year period ended
December  31,  1997.    These  consolidated  financial  statements  are  the
responsibility  of the Company's management.  Our responsibility is to express
an  opinion  on  these  consolidated financial statements based on our audits.

     We  conducted  our  audits in accordance with generally accepted auditing
standards.    Those  standards  require  that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting  the amounts and disclosures in the financial statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for  our  opinion.

     In  our  opinion, the consolidated financial statements referred to above
present  fairly,  in  all  material respects, the financial position of Summit
Financial  Corporation  and subsidiaries as of December 31, 1997 and 1996, and
the  results of their operations and their cash flows for each of the years in
the  three-year  period  ended December 31, 1997, in conformity with generally
accepted  accounting  principles.


Greenville,  South  Carolina                    /s/  KPMG  Peat  Marwick
January  15,  1998




ITEM  9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURES

     There  has  been  no  changes  in  or  disagreements  with accountants on
accounting  and financial disclosure as defined by Item 304 of Regulation S-K.


     PART  III


ITEM  10.          DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     The  information  required  by  this  item is set forth in the definitive
Proxy  Statement  of  the  Company  filed  in  connection with its 1998 Annual
Meeting  of  the  Shareholders,  which  information  is incorporated herein by
reference  as  follows:
     (a)  Identification  of  Directors:    Page 4 of the 1998 Proxy Statement
     (b)  Identification  of  Executive  Officers:    Page 7 of the 1998 Proxy
Statement
     (c)  Identification  of  Certain  Significant  Employees:    NONE
     (d)  Family  Relationships:    NONE
     (e)  Business  experience:    Pages  5-7  of  the  1998  Proxy  Statement
     (f)  Involvement  in  Certain  Legal  Proceedings:    NONE
     (g)  Promoters  and  Control  Persons:    NONE


ITEM  11.          EXECUTIVE  COMPENSATION

     The  information  required  by  this  item is set forth in the definitive
Proxy  Statement  of  the  Company  filed  in  connection with its 1998 Annual
Meeting of Shareholders, which information is incorporated herein by reference
as  follows:

     (a)  -  (f)  Executive  Compensation tables:  Pages 7-8 of the 1998 Proxy
Statement
     (g)  Compensation  of  Directors:    Page  3  of the 1998 Proxy Statement
     (h)  Employment  Contracts:    Page  9  of  the  1998  Proxy  Statement
     (i)  Repricing  of  Options/SARs:    NONE
     (j)  Compensation  Committee  Interlocks:    Page  10  of  the 1998 Proxy
Statement
     (k)  Compensation  Committee  Report:    Pages  9-10  of  the  1998 Proxy
Statement
     (l)  Performance  Graph:    Page  11  of  the  1998  Proxy  Statement


ITEM  12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required  by  this  item is set forth under the heading
"Election  of Directors" on pages 4-5 in the definitive Proxy Statement of the
Company  filed  in  connection  with  its 1998 Annual Meeting of Shareholders,
which  information  is  incorporated  herein  by  reference.


ITEM  13.          CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  information  required  by  this  item is set forth under the heading
"Compensation  Committee  Interlocks and Insider Participation" on page 10 and
"Certain  Transactions"  on  page  12 in the definitive Proxy Statement of the
Company  filed  in  connection  with  its 1998 Annual Meeting of Shareholders,
which  information  is  incorporated  herein  by  reference.


     PART  IV

ITEM  14.        EXHIBITS, FINANCIAL STATEMENT SCHEDULES & REPORTS ON FORM 8-K

     (a)          List  of  documents  filed  as  a  part  of  this  report:

     1.    Financial  Statements:

          The  following  consolidated  financial  statements  and  report  of
independent  auditors  of  the  Company are included in Part I, Item 8 hereof:

          Consolidated  Balance  Sheets  as  of  December  31,  1997  and 1996
          Consolidated  Statements  of Operations For The Years Ended December
31,  1997,  1996,  1995
          Consolidated  Statements of Shareholders' Equity For The Years Ended
December  31,  1997,  1996,  and  1995
          Consolidated  Statements  of Cash Flows For The Years Ended December
31,  1997,  1996,  1995
          Notes  to  Consolidated  Financial  Statements
          Report  of  Independent  Auditors

     2.    Financial  Statement  Schedules:

All  other  consolidated  financial  statements or schedules have been omitted
since  the  required  information  is  included  in the consolidated financial
statements  or  notes  thereto  referenced  in  Item  14(a)1  above, or is not
applicable  or  required.

     3.    Exhibits  (numbered in accordance with Item 601 of Regulation S-K):

     3.1      Articles of Incorporation, as amended (incorporated by reference
to  exhibits  filed  with  the Registrant's Registration Statement on Form S-1
Under  The  Securities  Act of 1933, as filed with the SEC on October 6, 1989,
File  No.  33-31466).

     3.2       Bylaws, as amended (incorporated by reference to exhibits filed
with  the  Registrant's  Registration Statement on Amendment No. 1 To Form S-1
Under  The  Securities Act of 1933, as filed with the SEC on December 7, 1989,
File  No.  33-31466).

     4.     Form of Certificate for Common Stock (incorporated by reference to
exhibits filed with the Registrant's Registration Statement on Amendment No. 1
To  Form  S-1  Under  The  Securities  Act  of  1933, as filed with the SEC on
December  7,  1989,  File  No.  33-31466).

     10.1      Summit Financial Corporation Incentive Stock Plan (incorporated
by reference to exhibits filed with the Registrant's Registration Statement on
Form S-1 Under The Securities Act of 1933, as filed with the SEC on October 6,
1989,  File  No.  33-31466).

     10.2          Lease Agreement for Bank Site (incorporated by reference to
exhibits  filed with the Registrant's Registration Statement on Form S-1 Under
The Securities Act of 1933, as filed with the SEC on October 6, 1989, File No.
33-31466).

     10.3          Employment Agreement of J. Randolph Potter (incorporated by
reference  to  exhibits  filed with the Registrant's Registration Statement on
Form S-1 Under the Securities Act of 1933, as filed with the SEC on October 6,
1989,  File  No.  33-31466).

     10.4      Employment Agreement of Blaise B. Bettendorf dated December 15,
1997.

     10.5     Summit Financial Corporation Restricted Stock Plan (incorporated
by  reference  to  exhibits  filed  with Summit Financial Corporation's Annual
Report  to  the  Securities  and Exchange Commission on Form 10-K for the year
ended  December  31,  1993,  File  No.  000-19235).

     10.6          Summit Financial Corporation Non-Employee Stock Option Plan
(incorporated  by  reference  to  exhibits  filed  with  Summit  Financial
Corporation's  Annual Report to the Securities and Exchange Commission on Form
10-K  for  the  year  ended  December  31,  1994,  File  No.  000-19235).

     10.7         Employment Agreement of James B. Schwiers dated December 15,
1997.

     21          Subsidiaries  of  Summit  Financial  Corporation:
                    Summit  National  Bank,  a  nationally  chartered  bank.
                    Freedom  Finance,  Inc.,  a  consumer  finance  company.

     23       Consent of KPMG Peat Marwick LLP with regard to S-8 Registration
Statements  for  Summit  Financial Corporation Restricted Stock Plan (as filed
with  the Securities and Exchange Commission, "SEC", August 23, 1994, File No.
33-83538);  Summit Financial Corporation Incentive Stock Option Plan (as filed
with  the  SEC  July  19,  1995,  File  No.  33-94962);  and  Summit Financial
Corporation  1995  Non-Employee  Stock Option Plan (as filed with the SEC July
19,  1995,  File  No.  33-94964).

     27          Financial  data  schedule

NOTE:  The exhibits listed above will be furnished to any security holder upon
written  request  to Ms. Blaise B. Bettendorf, Chief Financial Officer, Summit
Financial Corporation, Post Office Box 1087, Greenville, South Carolina 29602.
The  Registrant  will  charge  a  fee  of  $.25 per page for photocopying such
exhibit.


     (b)        No reports on Form 8-K were filed by the Registrant during the
fourth  quarter  of  1997.

     (c)        Exhibits required to be filed with this report, which have not
been  previously  filed  as  indicated in Item 14(a) above, are submitted as a
separate  section  of  this  report.

     (d)          Not  applicable.

<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange  Act of 1934, the registrant has duly caused this report to be signed
on  its  behalf  by the undersigned, thereunto duly authorized, in the City of
Greenville,  South  Carolina,  on  the  16th  day  of  March,  1998.

                              SUMMIT  FINANCIAL  CORPORATION
                                /s/  J.  Randolph  Potter
                              ---------------------------
Dated:    March  16,  1998     J. Randolph Potter, President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons on behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.

<TABLE>
<CAPTION>



SIGNATURE                           TITLE                DATE
<S>                         <C>                          <C>
  /s/ J. Randolph Potter .  President, Chief Executive   March 16, 1998
--------------------------
J. Randolph Potter . . . .  Officer and Director

  /s/ Blaise B. Bettendorf  Senior Vice President        March 16, 1998
--------------------------
Blaise B. Bettendorf . . .  (Principal Financial and
                            Accounting Officer)

  /s/ C. Vincent Brown . .  Chairman                     March 16, 1998
--------------------------
C. Vincent Brown

 /s/ John A. Kuhne . . . .  Vice Chairman                March 16, 1998
--------------------------
John A. Kuhne

  /s/ David C. Poole . . .  Secretary                    March 16, 1998
--------------------------
David C. Poole

  /s/ Ivan E. Block. . . .  Director                     March 16, 1998
--------------------------
Ivan E. Block

  /s/ John A. Burgess. . .  Director                     March 16, 1998
--------------------------
John A. Burgess

  /s/ J. Earle Furman, Jr.  Director                     March 16, 1998
--------------------------
J. Earle Furman, Jr.

  /s/ Charles S. Houser. .  Director                     March 16, 1998
--------------------------
Charles S. Houser

 /s/ John W. Houser. . . .  Director                     March 16, 1998
--------------------------
John W. Houser

 /s/ T. Wayne McDonald . .  Director                     March 16, 1998
--------------------------
T. Wayne McDonald

  /s/ Larry A. McKinney. .  Director                     March 16, 1998
--------------------------
Larry A. McKinney

  /s/ George O. Short, Jr.  Director                     March 16, 1998
--------------------------
George O. Short, Jr.
</TABLE>

<PAGE>

EXHIBIT  10.4  -  EMPLOYMENT  AGREEMENT  OF  BLAISE  B.  BETTENDORF



STATE  OF  SOUTH  CAROLINA          )
                         )                    EMPLOYMENT  AGREEMENT
COUNTY  OF  GREENVILLE          )


          THIS  EMPLOYMENT  AGREEMENT,  made and entered into this 15th day of
December,  1997,  by and between BLAISE B. BETTENDORF, a resident of the State
and  County  aforesaid,  hereinafter  referred  to  as  "Employee"  and Summit
Financial  Corporation,  a  corporation duly chartered pursuant to the laws of
the  State  of  South  Carolina,  hereinafter  referred  to  as  "Employer".
                             W I T N E S S E T H:
          WHEREAS,  the  Employer is a corporation chartered under the laws of
the  State  of  South  Carolina  and
          WHEREAS,  Employee  is the Senior Vice President and Chief Financial
Officer  of  the  banking  operation which is a wholly-owned subsidiary of the
Employer;  and
          WHEREAS,  the terms of this Agreement are subject to the approval by
the  Board  of  Directors  of  the  Employer;
          NOW,  THEREFORE,  in  consideration  of  the  mutual promises of the
parties and the mutual benefits they will gain by the performance thereof, the
parties  hereto  agree  as  follows:
          1.          Employment.  That the Employer, subject to the terms and
                      ----------
conditions  hereof,  does hereby agree to employ the Employee and the Employee
accepts  such employment, from the date hereof and to continue therefrom until
terminated  as  hereinafter  provided.
          2.      Duties.  That the Employee is employed to act as Senior Vice
                  ------
President/Chief  Financial  Officer  of  the  banking  entity,  which  is  a
wholly-owned  subsidiary  of  the Employer and to perform such other duties on
behalf  of the Employer, as well as any subsidiary thereof, which will benefit
the  Employer.
          3.    Termination  by Employee.  That the Employee may terminate his
                ------------------------
employment  hereunder  at  any  time after he has given ninety (90) days prior
written  notice to the Employer, such notice to be accomplished by delivery of
such  written  termination to either the Chairman of the Board of Directors or
President  (provided  that  the Employee is not serving in either capacity) of
the  Employer.
          4.    Termination  by  Employer.    That  the Employer may terminate
                -------------------------
immediately  the  Employee=s employment hereunder at any time, with or without
cause,  by  giving  written  notice  of  such termination of employment to the
Employee.
          5.    Automatic Termination of Employee.  That the employment of the
                ---------------------------------
Employee  shall  be  automatically  terminated  upon the earlier of any of the
following:
          (a)          The  death  of  the  Employee.
          (b)     The disability of the Employee so as to prevent the Employee
from  adequately  performing  his  duties  contemplated  hereunder  (the
determination  of  any  such disability shall be within the sole discretion of
the  Board of Directors of the Employer).  The Employee will be compensated at
his  normal  rate  until the earlier of: (i) such time as he begins to receive
benefits  from  his  disability insurance; or (ii) a period ending one hundred
eighty  (180)  days  from  such  determination  of  disability.
          6.    Compensation.    That  for  all  of  his duties hereunder, the
                ------------
Employee  shall receive compensation at the rate currently in place.  However,
anything  to  the  contrary notwithstanding, this compensation shall terminate
immediately in the event of termination of employment hereunder for any reason
whatsoever  except  for  any  payments  which  might be due the Employee under
paragraph  5(b)  or  by  reason  of the Employer enforcing its covenant not to
compete  set  forth  herein  below.
          7.    Covenant  Not  to  Compete.
                --------------------------
          (a)  That  in  the  event  the  Employee  voluntarily terminates his
employment  with  the  Employer  or  any  subsidiary of the Employer, that the
Employee  agrees  that  he  will  not,  directly  or  indirectly, own, manage,
operate, control, be employed by, participate in or be connected in any manner
with  the  ownership,  management or operation of any business similar to that
type of business then conducted by the Employer or by any subsidiary for which
the  Employee is then actively engaged for a period of twelve (12) months from
the  date  of  such  termination of employment and within the radius of twenty
(20)  miles from where the Employee has his main office or five (5) miles from
any  branch  office,  while he is performing his services hereunder.  Further,
that  the  Employee  acknowledges  that  this covenant not to compete with the
Employer,  or  such  subsidiary,  is  not  made under duress and that it is an
                                      ---
essential  part  of  the  Agreement, without which the Employer would not have
engaged  or  continued  the  services of the Employee .  Further, the Employee
acknowledges  that  this  covenant  not  to compete is for such good and valid
consideration, the receipt of which is hereby acknowledged and Employee agrees
that in the event of a threatened breach of his covenant under this Agreement,
that  any  remedy  at law would be inadequate and Employer may seek injunctive
relief,  as  well  as  damages.
          (b)  That  in  the  event  that  the  Employer  shall  terminate the
employment  of  the Employee, without cause ("cause" is defined herein below),
the  Employer  agrees  to  pay  the Employee one hundred (100%) percent of his
regular  monthly  salary (regular monthly salary shall be computed by dividing
by  twelve  (12) the Employee's W-2 cash salary and cash bonus income from the
Employer  for  the  calendar  year  immediately  preceding such termination of
employment).    Such  payment  to  begin  on  the  last day of the first month
following  the termination of employment and to continue for one (1) year from
the date of termination of employment.  At Employer's sole option, and for the
same  monthly payment amounts, this non-competition agreement may be continued
up  to  a maximum of two (2) years from the date of termination of employment;
PROVIDED,  HOWEVER,  that  after  one  (1)  year from the date of termination,
Employer  shall have the absolute right, in its sole discretion, to terminate,
at  any  time,  this said non-competition agreement by giving thirty (30) days
prior  written  notice  to  the  Employee,  mailed  to  the Employee's address
designated  in  Item 8 hereof and this covenant not to compete shall terminate
thirty (30) days after the mailing of such notice and the payments referred to
herein  above shall likewise automatically terminate on said date, after which
termination  by  the Employer, no payments shall be payable as it is expressly
acknowledged by both the Employee and the Employer that Employer shall have no
obligation  whatsoever to continue this covenant not to compete for any period
of  time  beyond  one  (1) year from the date of termination.  Naturally, such
notice  of  termination  of such payments by the Employer shall, at that time,
release  the  Employee  from  his obligation not to compete.  Such non-compete
shall  prevent  the  Employee  from, directly or indirectly, owning, managing,
operating,  or  being  employed by, participating in or being connected in any
manner with the ownership, management and operation of any business similar to
that  type of business then conducted by the Employer or by any subsidiary for
which the Employee is then actively engaged for a period of twelve (12) months
(24  months  at  Employer's sole options) from the date of such termination of
employment  and  within the radius of twenty (20) miles from the office of the
Employer, or five (5) miles from any branch office, as the case may be, within
which  Employee  has  his  main  office  while  he  is performing his services
hereunder.   Further, that the Employee acknowledges that this covenant not to
compete with the Employer or such subsidiary is not made under duress and that
                                                ---
it  is  an  essential part of this Agreement, without which the Employer would
not  have  engaged  or  continued  the services of the Employee.  Further, the
Employee  acknowledges  that this covenant not to compete is for such good and
valid  consideration, the receipt of which is hereby acknowledged and Employee
agrees  that  in  the  event of a threatened breach of his covenant under this
Agreement,  that  any  remedy at law would be inadequate and Employer may seek
injunctive  relief,  as  well  as  damages.
          (c)  That  in  the  event  that  the  Employer  shall  terminate the
employment  of  the  Employee for cause (with "cause" being defined under this
Agreement to mean either: (i) willful failure of the Employee to substantially
perform  prescribed  duties  other  than  a result of disability (the Employee
shall  be  given written notice of an alleged willful failure to substantially
perform  such prescribed duties and shall have a period of thirty (30) days to
correct such willful failure to substantially perform such prescribed duties);
or  (ii)  the  willful engaging in misconduct significantly detrimental to the
Employer),  the Employer agrees to pay the Employee one hundred (100%) percent
of  his  regular monthly salary ("regular monthly salary" shall be computed by
dividing  by  twelve (12) the Employee's W-2 cash salary and cash bonus income
from the Employer for the calendar year immediately preceding such termination
of  employment)  for a period of one (1) month.  Further, that in the event of
such  termination for cause, the Employee agrees that he will not, directly or
indirectly,  own, manage, operate, control, be employed by, participate in, or
be  connected in any manner with the ownership, management or operation of any
business similar to that type of business then conducted by the Employer or by
any subsidiary for which the Employee is then actively engaged for a period of
six  (6) months from the date of termination of employment and within a radius
of  twenty (20) miles from where the employee has his main office, or five (5)
miles  from  any branch office, while he is performing the services hereunder.
Further, that the Employee acknowledges that this covenant not to compete with
the  Employer,  or such subsidiary, is not made under duress and that it is an
                                       ---
essential  part  of  this Agreement, without which the Employer would not have
engaged  or  continued  the  services  of the Employee.  Further, the Employee
acknowledges  that  this  covenant  not  to compete is for such good and valid
consideration  and Employee agrees that in the event of a threatened breach of
his  covenant under this Agreement, that any remedy at law would be inadequate
and  Employer  may  seek  injunctive  relief,  as  well  as  damages.
          (d)  That  in  the  event the Employee is terminated by the Employer
after  a  change in control (as hereinafter defined) or by the Employer during
the  pendency of a potential change in control (other than for cause in either
case)  or  by the Employee for good reason after a change in control, then the
Employee is entitled to an amount equal to three (3) times his annual base pay
amount,  said amount to be paid in three (3) equal annual installments without
any  interest  due thereon, the first installment being due within thirty (30)
days  from  the date of such termination and annually thereafter until paid in
full,  as  defined  under  the Internal Revenue Code, less One ($1.00) Dollar.
This  annual base pay amount would be the average of the Employee's W-2 annual
cash  salary  and  cash  bonus income from the Employer over the five (5) most
recent  taxable  years.    The  Employee  is  also entitled to continued life,
disability  and medical insurance coverage for a period of twelve (12) months.
          A  change  in  control  occurs  if:  (i) any person or entity acting
directly  or  indirectly  or through or in concert (other than persons who are
presently  on  the  Board  of  Directors  for  the  Employer) with one or more
persons, acquires the power, directly or indirectly, to vote twenty-five (25%)
percent or more of any class of voting securities of the Employer; or (ii) the
Employer  becomes  a  subsidiary  of  another  corporation  or  is  merged  or
consolidated  into  another corporation.  A potential change in control occurs
if:  (i) the Employer has entered into an agreement, the consummation of which
would  result  in  a change in control; (ii) any person publicly announces his
intention  to  take or to consider taking actions which, if consummated, would
constitute  a  change  in  control; or (iii) any person becomes the beneficial
owner,  as defined under Securities and Exchange Commission rules, directly or
indirectly  of  the  Employer's  securities  which represent nine and one-half
(9.5%)  percent  or  more  of the combined voting power of the Employer's then
outstanding  securities  entitled  to  elect  directors;  or (iv) the Board of
Directors adopts a resolution to the effect that a potential change in control
for  purposes  of  the  agreement has occurred.  A potential change in control
remains  pending  for purposes of receiving payments under the agreement until
the earlier of the occurrence of a change in control or a determination by the
Board  of  Directors  or  a  committee  thereof (at any time) that a change of
control  is  not  or  was  no  longer  reasonably  expected  to  occur.
          Termination  of  employment  because  of  disability,  retirement or
death,  or  by  the Employer for cause or by the Employee for any reason other
than  for  good  reason, will not result in the full payment of benefits under
the  provisions  of  paragraph  7(d)  above.    "Cause"  is  defined under the
agreement  to  mean:  (i)  willful failure substantially to perform prescribed
duties  other  than as a result of disability; or (ii) the willful engaging in
misconduct  significantly  detrimental  to the Employer.     "Good reason" for
Employee  to  terminate employment with the Employer occurs if: (i) duties are
assigned  that  are  materially inconsistent with previous duties; (ii) duties
and  responsibilities  are  substantially  reduced; (iii) base compensation is
reduced not as part of an across-the-board reduction for such executives; (iv)
participation  under  compensation  plans  or  arrangements  generally  made
available to persons at the Employee's level of responsibility at the Employer
is  denied  except  as otherwise provided; (v) a successor fails to assume the
agreement;  or  (vi)  termination  is  made without compliance with prescribed
procedures.
          8.    Addresses.    That,  unless  mutually  amended in writing, any
                ---------
notices  required  or  permitted  to  be  given  under this Agreement shall be
sufficient  if  in  writing  and  sent  by  registered  mail  to the following
addresses:
          FOR  THE  EMPLOYER:
          Summit  Financial  Corporation
          C/O  J.  Randolph  Potter
          P  O  Box  1087
          Greenville,  SC  29602

          FOR  THE  EMPLOYEE:
          Blaise  B.  Bettendorf
          103  Cypress  Ridge
          Greenville,  SC  29609

          9.   Vacation.  That during the term of active employment hereunder,
               --------
the  Employee  shall be entitled to an annual paid vacation of three (3) weeks
to  be  taken  at  such  reasonable  time  or times as allowed by the Board of
Directors  of  the  Employer.
        10.    Employee Benefits.  That the
               -----------------
Employee shall be entitled, during the term of active employment hereunder, to
those  employee  benefits  currently  in  place  for  the  Employee.
        11.    State  Law.   That
               ----------
this Agreement is made pursuant to the laws of the State of South Carolina and
shall  be  construed  thereby.
          12.  Entire Agreement.  That this Agreement constitutes the sole and
               ----------------
complete agreement between the Employer and the Employee and it is agreed that
no verbal or other statement, inducements or representations have been made to
or  relied  upon  by  the  Employee and that no modification to this Agreement
shall be binding upon either party hereto unless in writing and signed by each
party.
          13.    Binding  Effect.    That  this  Agreement is binding upon the
                 ---------------
parties  hereto,  their  successors,  personal  representatives,  legal
representatives,  heirs  and  assigns  (however  this  Agreement  shall not be
assigned  by the Employee unless the Employer shall agree thereto in writing).
          IN  WITNESS  WHEREOF, the parties hereto have signed and sealed this
Agreement  on  the  date  above  first  written.

EMPLOYER:
SUMMIT  FINANCIAL  CORPORATION

/s/  J.  Randolph  Potter,  President

/s/  C.  Vincent  Brown,  Chairman


EMPLOYEE:

/s/  Blaise  B.  Bettendorf
<PAGE>

EXHIBIT  10.7  -  EMPLOYMENT  AGREEMENT  OF  JAMES  B.  SCHWIERS


STATE  OF  SOUTH  CAROLINA          )
                         )                    EMPLOYMENT  AGREEMENT
COUNTY  OF  GREENVILLE          )


          THIS  EMPLOYMENT  AGREEMENT,  made and entered into this 15th day of
December,  1997, by and between JAMES B. SCHWIERS, a resident of the State and
County  aforesaid,  hereinafter referred to as "Employee" and Summit Financial
Corporation, a corporation duly chartered pursuant to the laws of the State of
South  Carolina,  hereinafter  referred  to  as  "Employer".
                             W I T N E S S E T H:
          WHEREAS,  the  Employer is a corporation chartered under the laws of
the  State  of  South  Carolina  and
          WHEREAS,  Employee  is  the  Executive  Vice  President  and  Chief
Operating  Officer of the banking operation which is a wholly-owned subsidiary
of  the  Employer;  and
          WHEREAS,  the terms of this Agreement are subject to the approval by
the  Board  of  Directors  of  the  Employer;
          NOW,  THEREFORE,  in  consideration  of  the  mutual promises of the
parties and the mutual benefits they will gain by the performance thereof, the
parties  hereto  agree  as  follows:
          1.          Employment.  That the Employer, subject to the terms and
                      ----------
conditions  hereof,  does hereby agree to employ the Employee and the Employee
accepts  such employment, from the date hereof and to continue therefrom until
terminated  as  hereinafter  provided.
          2.        Duties.  That the Employee is employed to act as Executive
                    ------
Vice  President/Chief  Operating  Officer  of  the  banking entity, which is a
wholly-owned  subsidiary  of  the Employer and to perform such other duties on
behalf  of the Employer, as well as any subsidiary thereof, which will benefit
the  Employer.
          3.    Termination  by Employee.  That the Employee may terminate his
                ------------------------
employment  hereunder  at  any  time after he has given ninety (90) days prior
written  notice to the Employer, such notice to be accomplished by delivery of
such  written  termination to either the Chairman of the Board of Directors or
President  (provided  that  the Employee is not serving in either capacity) of
the  Employer.
          4.    Termination  by  Employer.    That  the Employer may terminate
                -------------------------
immediately  the  Employee's employment hereunder at any time, with or without
cause,  by  giving  written  notice  of  such termination of employment to the
Employee.
          5.    Automatic Termination of Employee.  That the employment of the
                ---------------------------------
Employee  shall  be  automatically  terminated  upon the earlier of any of the
following:
          (a)          The  death  of  the  Employee.
          (b)     The disability of the Employee so as to prevent the Employee
from  adequately  performing  his  duties  contemplated  hereunder  (the
determination  of  any  such disability shall be within the sole discretion of
the  Board of Directors of the Employer).  The Employee will be compensated at
his  normal  rate  until the earlier of: (i) such time as he begins to receive
benefits  from  his  disability insurance; or (ii) a period ending one hundred
eighty  (180)  days  from  such  determination  of  disability.
          6.    Compensation.    That  for  all  of  his duties hereunder, the
                ------------
Employee  shall receive compensation at the rate currently in place.  However,
anything  to  the  contrary notwithstanding, this compensation shall terminate
immediately in the event of termination of employment hereunder for any reason
whatsoever  except  for  any  payments  which  might be due the Employee under
paragraph  5(b)  or  by  reason  of the Employer enforcing its covenant not to
compete  set  forth  herein  below.
          7.    Covenant  Not  to  Compete.
                --------------------------
          (a)  That  in  the  event  the  Employee  voluntarily terminates his
employment  with  the  Employer  or  any  subsidiary of the Employer, that the
Employee  agrees  that  he  will  not,  directly  or  indirectly, own, manage,
operate, control, be employed by, participate in or be connected in any manner
with  the  ownership,  management or operation of any business similar to that
type of business then conducted by the Employer or by any subsidiary for which
the  Employee is then actively engaged for a period of twelve (12) months from
the  date  of  such  termination of employment and within the radius of twenty
(20)  miles from where the Employee has his main office or five (5) miles from
any  branch  office,  while he is performing his services hereunder.  Further,
that  the  Employee  acknowledges  that  this covenant not to compete with the
Employer,  or  such  subsidiary,  is  not  made under duress and that it is an
                                      ---
essential  part  of  the  Agreement, without which the Employer would not have
engaged  or  continued  the  services  of the Employee.  Further, the Employee
acknowledges  that  this  covenant  not  to compete is for such good and valid
consideration, the receipt of which is hereby acknowledged and Employee agrees
that in the event of a threatened breach of his covenant under this Agreement,
that  any  remedy  at law would be inadequate and Employer may seek injunctive
relief,  as  well  as  damages.
          (b)  That  in  the  event  that  the  Employer  shall  terminate the
employment  of  the Employee, without cause ("cause" is defined herein below),
the  Employer  agrees  to  pay  the Employee one hundred (100%) percent of his
regular  monthly  salary (regular monthly salary shall be computed by dividing
by  twelve  (12) the Employee's W-2 cash salary and cash bonus income from the
Employer  for  the  calendar  year  immediately  preceding such termination of
employment).    Such  payment  to  begin  on  the  last day of the first month
following  the termination of employment and to continue for one (1) year from
the date of termination of employment.  At Employer's sole option, and for the
same  monthly payment amounts, this non-competition agreement may be continued
up  to  a maximum of two (2) years from the date of termination of employment;
PROVIDED,  HOWEVER,  that  after  one  (1)  year from the date of termination,
Employer  shall have the absolute right, in its sole discretion, to terminate,
at  any  time,  this said non-competition agreement by giving thirty (30) days
prior  written  notice  to  the  Employee,  mailed  to  the Employee's address
designated  in  Item 8 hereof and this covenant not to compete shall terminate
thirty (30) days after the mailing of such notice and the payments referred to
herein  above shall likewise automatically terminate on said date, after which
termination  by  the Employer, no payments shall be payable as it is expressly
acknowledged by both the Employee and the Employer that Employer shall have no
obligation  whatsoever to continue this covenant not to compete for any period
of  time  beyond  one  (1) year from the date of termination.  Naturally, such
notice  of  termination  of such payments by the Employer shall, at that time,
release  the  Employee  from  his obligation not to compete.  Such non-compete
shall  prevent  the  Employee  from, directly or indirectly, owning, managing,
operating,  or  being  employed by, participating in or being connected in any
manner with the ownership, management and operation of any business similar to
that  type of business then conducted by the Employer or by any subsidiary for
which the Employee is then actively engaged for a period of twelve (12) months
(24  months  at  Employer's sole options) from the date of such termination of
employment  and  within the radius of twenty (20) miles from the office of the
Employer, or five (5) miles from any branch office, as the case may be, within
which  Employee  has  his  main  office  while  he  is performing his services
hereunder.   Further, that the Employee acknowledges that this covenant not to
compete with the Employer or such subsidiary is not made under duress and that
                                                ---
it  is  an  essential part of this Agreement, without which the Employer would
not  have  engaged  or  continued  the services of the Employee.  Further, the
Employee  acknowledges  that this covenant not to compete is for such good and
valid  consideration, the receipt of which is hereby acknowledged and Employee
agrees  that  in  the  event of a threatened breach of his covenant under this
Agreement,  that  any  remedy at law would be inadequate and Employer may seek
injunctive  relief,  as  well  as  damages.
          (c)  That  in  the  event  that  the  Employer  shall  terminate the
employment  of  the  Employee for cause (with "cause" being defined under this
Agreement to mean either: (i) willful failure of the Employee to substantially
perform  prescribed  duties  other  than  a result of disability (the Employee
shall  be  given written notice of an alleged willful failure to substantially
perform  such prescribed duties and shall have a period of thirty (30) days to
correct such willful failure to substantially perform such prescribed duties);
or  (ii)  the  willful engaging in misconduct significantly detrimental to the
Employer),  the Employer agrees to pay the Employee one hundred (100%) percent
of  his  regular monthly salary ("regular monthly salary" shall be computed by
dividing  by  twelve (12) the Employee's W-2 cash salary and cash bonus income
from the Employer for the calendar year immediately preceding such termination
of  employment)  for a period of one (1) month.  Further, that in the event of
such  termination for cause, the Employee agrees that he will not, directly or
indirectly,  own, manage, operate, control, be employed by, participate in, or
be  connected in any manner with the ownership, management or operation of any
business similar to that type of business then conducted by the Employer or by
any subsidiary for which the Employee is then actively engaged for a period of
six  (6) months from the date of termination of employment and within a radius
of  twenty (20) miles from where the employee has his main office, or five (5)
miles  from  any branch office, while he is performing the services hereunder.
Further, that the Employee acknowledges that this covenant not to compete with
the  Employer,  or such subsidiary, is not made under duress and that it is an
                                       ---
essential  part  of  this Agreement, without which the Employer would not have
engaged  or  continued  the  services  of the Employee.  Further, the Employee
acknowledges  that  this  covenant  not  to compete is for such good and valid
consideration  and Employee agrees that in the event of a threatened breach of
his  covenant under this Agreement, that any remedy at law would be inadequate
and  Employer  may  seek  injunctive  relief,  as  well  as  damages.
          (d)  That  in  the  event the Employee is terminated by the Employer
after  a  change in control (as hereinafter defined) or by the Employer during
the  pendency of a potential change in control (other than for cause in either
case)  or  by the Employee for good reason after a change in control, then the
Employee is entitled to an amount equal to three (3) times his annual base pay
amount,  said amount to be paid in three (3) equal annual installments without
any  interest  due thereon, the first installment being due within thirty (30)
days  from  the date of such termination and annually thereafter until paid in
full,  as  defined  under  the Internal Revenue Code, less One ($1.00) Dollar.
This  annual base pay amount would be the average of the Employee's W-2 annual
cash  salary  and  cash  bonus income from the Employer over the five (5) most
recent  taxable  years.    The  Employee  is  also entitled to continued life,
disability  and medical insurance coverage for a period of twelve (12) months.
          A  change  in  control  occurs  if:  (i) any person or entity acting
directly  or  indirectly  or through or in concert (other than persons who are
presently  on  the  Board  of  Directors  for  the  Employer) with one or more
persons, acquires the power, directly or indirectly, to vote twenty-five (25%)
percent or more of any class of voting securities of the Employer; or (ii) the
Employer  becomes  a  subsidiary  of  another  corporation  or  is  merged  or
consolidated  into  another corporation.  A potential change in control occurs
if:  (i) the Employer has entered into an agreement, the consummation of which
would  result  in  a change in control; (ii) any person publicly announces his
intention  to  take or to consider taking actions which, if consummated, would
constitute  a  change  in  control; or (iii) any person becomes the beneficial
owner,  as defined under Securities and Exchange Commission rules, directly or
indirectly  of  the  Employer's  securities  which represent nine and one-half
(9.5%)  percent  or  more  of the combined voting power of the Employer's then
outstanding  securities  entitled  to  elect  directors;  or (iv) the Board of
Directors adopts a resolution to the effect that a potential change in control
for  purposes  of  the  agreement has occurred.  A potential change in control
remains  pending  for purposes of receiving payments under the agreement until
the earlier of the occurrence of a change in control or a determination by the
Board  of  Directors  or  a  committee  thereof (at any time) that a change of
control  is  not  or  was  no  longer  reasonably  expected  to  occur.
          Termination  of  employment  because  of  disability,  retirement or
death,  or  by  the Employer for cause or by the Employee for any reason other
than  for  good  reason, will not result in the full payment of benefits under
the  provisions  of  paragraph  7(d)  above.    "Cause"  is  defined under the
agreement  to  mean:  (i)  willful failure substantially to perform prescribed
duties  other  than as a result of disability; or (ii) the willful engaging in
misconduct  significantly  detrimental  to the Employer.     "Good reason" for
Employee  to  terminate employment with the Employer occurs if: (i) duties are
assigned  that  are  materially inconsistent with previous duties; (ii) duties
and  responsibilities  are  substantially  reduced; (iii) base compensation is
reduced not as part of an across-the-board reduction for such executives; (iv)
participation  under  compensation  plans  or  arrangements  generally  made
available to persons at the Employee's level of responsibility at the Employer
is  denied  except  as otherwise provided; (v) a successor fails to assume the
agreement;  or  (vi)  termination  is  made without compliance with prescribed
procedures.
          8.    Addresses.    That,  unless  mutually  amended in writing, any
                ---------
notices  required  or  permitted  to  be  given  under this Agreement shall be
sufficient  if  in  writing  and  sent  by  registered  mail  to the following
addresses:
          FOR  THE  EMPLOYER:
          Summit  Financial  Corporation
          C/O  J.  Randolph  Potter
          P  O  Box  1087
          Greenville,  SC  29602

          FOR  THE  EMPLOYEE:
          James  B.  Schwiers
          224  E.  Augusta  Place
          Greenville,  SC  29605

          9.   Vacation.  That during the term of active employment hereunder,
               --------
the  Employee  shall be entitled to an annual paid vacation of three (3) weeks
to  be  taken  at  such  reasonable  time  or times as allowed by the Board of
Directors  of  the  Employer.
         10.    Employee Benefits.  That the
                -----------------
Employee shall be entitled, during the term of active employment hereunder, to
those  employee  benefits  currently  in  place  for  the  Employee.
         11.    State  Law.   That
                ----------
this Agreement is made pursuant to the laws of the State of South Carolina and
shall  be  construed  thereby.
          12.  Entire Agreement.  That this Agreement constitutes the sole and
               ----------------
complete agreement between the Employer and the Employee and it is agreed that
no verbal or other statement, inducements or representations have been made to
or  relied  upon  by  the  Employee and that no modification to this Agreement
shall be binding upon either party hereto unless in writing and signed by each
party.
          13.    Binding  Effect.    That  this  Agreement is binding upon the
                 ---------------
parties  hereto,  their  successors,  personal  representatives,  legal
representatives,  heirs  and  assigns  (however  this  Agreement  shall not be
assigned  by the Employee unless the Employer shall agree thereto in writing).
          IN  WITNESS  WHEREOF, the parties hereto have signed and sealed this
Agreement  on  the  date  above  first  written.

EMPLOYER:
SUMMIT  FINANCIAL  CORPORATION

/s/  J.  Randolph  Potter,  President

/s/  C.  Vincent  Brown,  Chairman



EMPLOYEE:


/s/  James  B.  Schwiers

<PAGE>

EXHIBIT  23  -  CONSENT  OF  KPMG  PEAT  MARWICK



                         INDEPENDENT AUDITORS' CONSENT
                         -----------------------------


The  Board  of  Directors
Summit  Financial  Corporation



We  consent  to  incorporation  by reference in the registration statements on
Form  S-8  (No.  33-83538) Summit Financial Corporation Restricted Stock Plan,
(No.  33-94962)  Summit  Financial Corporation Incentive Stock Option Plan and
(No.  33-94964)  Summit  Financial  Corporation 1995 Non-Employee Stock Option
Plan  of  Summit  Financial  Corporation of our report dated January 15, 1998,
relating  to  the  consolidated balance sheets of Summit Financial Corporation
and  subsidiaries  (the  "Company")  as of December 31, 1997 and 1996, and the
related consolidated statements of income, shareholders' equity, and cash flows
for  each of the years in the three-year period ended December 31, 1997, which
report  appears  in  the  December  31, 1997 Annual report on Form 10-K of the
Company.



Greenville,  South  Carolina
March  27,  1998                                         /s/ KPMG Peat Marwick