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, 2000

                          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.
                                                                      Employer
of  incorporation  or                                           Identification
                                                                         No.)
organization)

                  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.          ______

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 March 1, 2001 was
approximately  $24.0  million.  For  purposes of the foregoing calculation only,
all  directors  and  executive  officers  of  the  Registrant  have  been deemed
affiliates.

As  of  March  1,  2001,  there were 3,598,318 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 2001 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 10-K,
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  10-K,  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

THE  COMPANY
     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 bank 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.  In  1997  the Bank incorporated Summit Investment
Services,  Inc., an investment and financial planning company, as a wholly-owned
subsidiary.  The  Company  has  no  foreign  operations.

     The  principal  role  of  the  Company  is  to supervise and coordinate the
activities  of its subsidiaries and to provide then with capital and services of
various  kinds.  The  Company  derives  substantially  all  of  its  income from
management  fees  for  services  performed,  interest on advances and loans, and
other  intercompany  payments as appropriate from the subsidiaries.  The Company
conducts  its  business  from  four  banking offices and eleven consumer finance
offices  throughout  South  Carolina.

     At December 31, 2000, the Company had total assets of $249.8 million, total
deposits of $209.2 million, loans, net of unearned income, of $180.5 million and
shareholders'  equity  of  $21.5  million.  This  compares  with total assets of
$191.2  million,  total  deposits of $158.0 million, loans of $148.2 million and
shareholders'  equity  of  $17.6  million  at  December 31, 1999.  The operating
results  and  key  financial  measures  of  the Company and its subsidiaries are
discussed  more  fully  in  "Management's  Discussion  and Analysis of Financial
Condition and Results of Operations", included in this report under Item 7.  For
a  discussion  of  the financial information on the Company's segments, refer to
Note  21  of the Consolidated Financial Statements included in this report under
Item  8.

SUMMIT  NATIONAL  BANK
     Summit  National  Bank,  headquartered  in  Greenville,  South  Carolina,
commenced  operations  in  July  1990.  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 four
full-service  branch  locations  in  Greenville and Spartanburg, 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,  remote  internet  banking and various cash management and
electronic  banking  programs.

     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.

SUMMIT  INVESTMENT  SERVICES,  INC.
     Summit Investment Services, Inc. commenced operations in November 1997.  It
provides  a full range of nondeposit investment products including annuities and
mutual  funds,  full  and  discount brokerage services, and financial management
services.  Summit Investment Services has offices in Greenville and Spartanburg,
South  Carolina.

FREEDOM  FINANCE,  INC.
     The  Finance  Company  makes  and services installment loans to individuals
with  loan  principal amounts generally not exceeding $2,000 and with maturities
ranging  from  three  to  eighteen  months.  The  Finance  Company,  which  is
headquartered  in  Greenville,  South  Carolina, currently has 11 branch offices
throughout  South  Carolina.  The Finance Company's loan customers are primarily
in  the  low-to-moderate  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,  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.

TERRITORY  SERVED  AND  COMPETITION
     THE  BANK:  Summit  National  Bank  and  its  subsidiary, Summit Investment
Services,  Inc.,  are  located in the Upstate of South Carolina, with offices in
Greenville and Spartanburg.  The extended market area encompasses Greenville and
Spartanburg  Counties,  with  the principal market area being the urban areas of
these  counties.  The  Upstate  of  South  Carolina  is  a  highly  competitive
commercial  banking  market  with  at  least  30 other banks and other financial
institutions  represented, including all of the largest banks in the state.  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 and range 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  may  have substantially greater resources and
lending  abilities  than  the  Bank  due to their size 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  four 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 11
locations  throughout  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.  The amounts,
rates,  and  fees  charged  on consumer finance loans are regulated by state law
according  to  the  type of license granted by the South Carolina State Board of
Financial  Institutions  (the  "State Board").  Numerous other finance companies
which  offer  similar types of loans are located in the areas served by Freedom.

     The  Finance  Company  competes  directly with national, regional and local
consumer  finance  companies. 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, 2000, the Company and its subsidiaries employed a total
of  82  full-time  equivalent  employees.

MONETARY  POLICY
     The  earnings  of  the  Company  and  its  subsidiaries  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.


SUPERVISION  AND  REGULATION
     The  business  in  which  the  Company  and its subsidiaries are engaged is
subject  to  extensive  supervision,  regulation and examination by various bank
regulatory  authorities  and  other governmental agencies in the state where the
Company  and  its  subsidiaries  operate.  The  supervision,  regulation  and
examination  to  which the Company and its subsidiaries are subject are intended
primarily  for  the  protection of depositors or are aimed at carrying out broad
public  policy  goals,  rather  than  for  the  protection  of security holders.

     Several  of  the  more  significant regulatory provisions applicable to the
Company and its subsidiaries are subject are discussed below. To the extent that
the  following  information  describes statutory or regulatory provisions, it is
qualified  in  its entirety by reference to the particular statutory provisions.
Any  change  in  applicable  law or regulation may have a material effect on the
business  and  prospects  of  the  Company  and  its  subsidiaries.

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.  Consequently, the Company must
receive  the approval of the State Board prior to engaging in the acquisition of
banking  or  nonbanking institutions or assets.  The Company is also required to
file annual reports and other information with the Federal Reserve and the State
Board  regarding  its financial condition, results of operations, management and
intercompany  relationships  and  transactions  between  the  Company  and  its
subsidiaries.   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.  The  Change in Bank Control Act
prohibits  a  person  or  group  of  persons  from acquiring "control" of a bank
holding  company, unless the Federal Reserve Board has been notified and has not
objected  to  the transaction. Under a rebuttable presumption established by the
Federal Reserve Board, the acquisition of 10% or more of a class of voting stock
of a bank holding company with a class of securities registered under Section 12
of  the  Exchange  Act,  such as the Company, would, under the circumstances set
forth  in the presumption, constitute acquisition of control of the bank holding
company.

     In  November  1999,  Congress  passed  the  "Gramm-Leach-Bliley"  Financial
Services  Modernization Act (the "GLB Act") which repealed two provisions of the
Glass-Stegall  Act  that previously separated banking, insurance, and securities
activities.  The  GLB  Act  creates  a  new  financial  services  structure, the
financial  holding company, under the BHCA.  Financial holding companies will be
able  to  engage  in  any  activity  that is deemed (1) financial in nature, (2)
incidental  to  any  such  financial  activity, or (3) complementary to any such
financial  activity  and  does  not  pose  a  substantial  risk to the safety or
soundness of depository institutions or the financial system generally.  The GLB
Act  specifies  certain  activities  that  are deemed to be financial in nature,
including  lending,  exchanging,  transferring,  investing  for  others,  or
safeguarding  money or securities; underwriting and selling insurance; providing
financial,  investment,  or economic advisory services; underwriting, dealing in
or making a market in, securities; and any activity currently permitted for bank
holding companies by the Federal Reserve Board under section 4(c)(8) of the Bank
Holding  Company  Act.  The GLB Act does not authorize banks or their affiliates
to  engage  in  commercial  activities that are not financial in nature.  A bank
holding  company  may elect to be treated as a financial holding company only if
all  depository  institution  subsidiaries  of  the  holding  company  are  well
capitalized,  well  managed  and  have  at least a satisfactory rating under the
Community  Reinvestment  Act.  On  March  23,  2000, the Federal Reserve Bank of
Richmond  accepted  the  Company's election to be treated as a financial holding
company  under  the  GLB  Act.

     National  banks  are  also  authorized  by  the  GLB Act to engage, through
"financial  subsidiaries,"  in  any activity that is permissible for a financial
holding  company (as described above) and any activity that the Secretary of the
Treasury,  in  consultation  with  the  Federal  Reserve  Board,  determines  is
financial  in  nature  or  incidental to any such financial activity, except (1)
insurance  underwriting,  (2)  real estate development or real estate investment
activities  (unless otherwise permitted by law), (3) insurance company portfolio
investments  and  (4)  merchant  banking.  The  authority  of a national bank to
invest  in  a  financial  subsidiary  is  subject  to  a  number  of conditions,
including,  among  other things, requirements that the bank must be well managed
and  well  capitalized  (after  deducting  from  the  bank's capital outstanding
investments  in  financial  subsidiaries).

     The GLB Act also contains a number of other provisions that will affect the
Company's  operations  and the operations of all financial institutions.  One of
the  new  provisions,  which  became  effective  on July 1, 2000, relates to the
financial  privacy  of  consumers.  Federal  banking  regulators  issued  final
regulations in November 2000 related to consumer privacy which limit the ability
of  banks  and other financial entities to disclose non-public information about
consumers  to  non-affiliated  entities.  These  limitations  will  require more
disclosure  to  consumers,  and in some circumstances, to require consent by the
consumer  before  information  is  allowed  to  be  provided  to  a third party.

     The  GLB  Act  adopts  a  system of functional regulation where the primary
regulator  is  determined  by the nature of the activity rather than the type of
institution.  Although  the  Federal  Reserve  Board (the "FRB") is the umbrella
supervisor of financial holding companies, the GLB Act limits the FRB's power to
supervise  and  conduct  examinations  of  affiliated companies of the financial
holding  company.  Rather,  under  the provisions of the GLB Act, the securities
activities  would  be  regulated  by  the  SEC  and other securities regulators,
insurance  activities by the state insurance authorities, and banking activities
by  the  appropriate  bank  regulator.

     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.  This support may be required at times when the bank holding
company may not have the resources to provide it. In the event of a bank holding
company's  bankruptcy,  any  commitment  by  the  bank holding company to a U.S.
federal  bank  regulatory  agency  to  maintain the capital of a subsidiary bank
would  be assumed by the bankruptcy trustee and entitled to priority of payment.
If a default occurred with respect to a bank, any capital loans to the bank from
its  parent  holding company would be subordinate in right of payment to payment
of  the  bank's  depositors  and  certain  of  its  other  obligations.

     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  divest  itself  of  any  bank  or  nonbank subsidiary if the agency
determines  that  divesture  may  aid  a  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 from the State Board.  The company proposing to
make  the acquisition must file with the State Board a notice or the 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 or merge with a
bank  located  in  any other state and a bank holding company located outside of
South Carolina may acquire or merge with any South Carolina-based bank, provided
the acquirer is adequately capitalized and adequately managed, as defined in the
Riegle-Neal  Act.  The  Interstate  Banking  Act  also permits de novo branching
provisions.  The  legislation preserves the state laws which require that a bank
must be in existence for a minimum period of time before being acquired, as long
as  the  requirement  is  five  years  or  less.

     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 that 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 are
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  a  member  of the Federal Home Loan Bank of Atlanta ("FHLB")
which  provides  a  central  credit  facility primarily for member institutions.
Members of the FHLB are required to acquire and hold shares of capital stock in,
and  may  obtain advances from, the FHLB.  The amount of stock owned is based on
the  Bank's  balance  of  residential  mortgages  and the balance of outstanding
advances  from  the FHLB.  The FHLB makes advances to members in accordance with
policies  and  procedures  established  by  its Board of Directors.  The Bank is
authorized  to  borrow  funds  from  the FHLB to meet demands for withdrawals of
deposit  accounts,  to meet seasonal requirements, to fund expansion of the loan
portfolio, or for general asset/liability management.  Advances may be made on a
secured  or  unsecured  basis  depending  on  a number of factors, including the
purpose  for  which  the  funds  are  being  borrowed  and  existing  advances.
Collateral  on  secured  advances  may  be in the form of first mortgages on 1-4
family  real  estate,  government  securities, or other assets acceptable to the
FHLB.  Interest  rates  charged  for  advances vary depending upon maturity, the
cost  of  funds  to  the  FHLB,  and  general  market  conditions.

     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 deposit insurance assessment
to  maintain the Bank Insurance Fund 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 States Department of the Treasury.  The
FDIC  has  broad authority to prohibit a 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.  The FDIC
requires  an assessment to be paid by each FDIC-insured institution 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  such  terms  have  been  defined  in
applicable federal regulations adopted to implement the prompt corrective action
provisions  of  FDICIA,  and  whether  such  institution  is  considered  by its
supervisory  agency  to  be  financially  sound or to have supervisory concerns.

     Pursuant  to  the  authority  granted  under  FDICIA,  United  States  bank
regulatory  agencies  were  empowered  to  impose progressively more restrictive
constraints  on  the  operations,  management  and  capital  distributions of an
insured  depository  institution,  depending  on  the  category  in  which  an
institution is classified.  Unless a banking institution is well capitalized, it
is  subject  to  restrictions  on  its ability to offer brokered deposits and on
certain  other  aspects  of  its  operations.  An  undercapitalized  banking
institution  must develop a capital restoration plan and its parent bank holding
company  must  guarantee the bank's compliance with the plan up to the lesser of
5%  of  the  bank's assets at the time it became undercapitalized and the amount
needed  to  comply  with  the plan.  As of December 31, 2000, the Company's bank
subsidiary  was  well  capitalized,  based  on  the  prompt  corrective  action
guidelines.  It  should  be  noted,  however,  that a bank's capital category is
determined  solely  for  the  purpose  of  applying  the  Comptroller's  prompt
corrective  action  regulations and that the capital category may not constitute
an  accurate  representation  of  the  bank's  overall  financial  condition  or
prospects.

     Interest  and certain other charges collected or contracted for by the Bank
are  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  and  regulated  by  the  State  Board.
Accordingly,  the Finance Company is subject to annual examinations by the State
Board  and  various  regulatory requirements, including annual reporting, annual
license  renewal,  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  and  other fee 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.

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, 2000,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they  are  subject.  At  December  31, 2000 and 1999, the Bank is categorized as
"well  capitalized" under the regulatory framework for prompt corrective action.
To  be  categorized  as "well capitalized", the Bank must maintain certain 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,  2000 and 1999 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  14  to the Notes to Consolidated
Financial  Statements.

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 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, 2000,
no cash dividends have been declared or paid by the Bank.  At December 31, 2000,
the  Bank  had  available  retained  earnings  of  $10  million.

FUTURE  LEGISLATION
     Changes  to  federal  and  state  laws  and  regulations  could  affect the
operating  environment  of  the  Company and its subsidiaries in substantial and
unpredictable ways.  The Company cannot accurately predict what legislation will
ultimately  be  enacted,  and,  if  enacted,  the  ultimate  effect  that it, or
implementing  regulations,  would  have  upon its or its subsidiaries' financial
condition  or  results  of  operations.

STATISTICAL  DISCLOSURES  BY  BANK  HOLDING  COMPANIES

     The  consolidated  selected  statistical  financial  data  provided  on the
following  pages presents a more detailed review of the Company's and the Bank's
business  activities.  The  disclosures  are  intended to provide information to
facilitate  analysis  and comparison of sources of income and exposures to risk.

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 $10
million,  $8.7 million, and $7.6 million for 2000, 1999, and 1998, respectively.
The  Company's  average  interest  rate  spread  is calculated as the difference
between  the  average  interest  rate  earned on interest-earning assets and the
average  interest  paid  on  interest-bearing  liabilities.  For  the year ended
December  31,  2000,  the  Company's  net interest margin was 5.11%, compared to
5.31%  in 1999 and 4.95% for 1998.  The net interest margin is calculated as net
interest  income  divided  by  average  earning  assets.  Refer  to  additional
discussion  related  to  the  net interest income changes under Part II, Item 7,
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations."

     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, 2000.
Tabular presentation of all average statistical data is based on daily averages.
<TABLE>
<CAPTION>


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


                                              Average                 2000                                   1999
                                                                    --------                               --------
                                             Yield/Rate   Average   Income/   Yield/             Average   Income/   Yield/
                                              12/31/00    Balance   Expense    Rate              Balance   Expense    Rate
                                                          --------  --------  -------            --------  --------  -------
<S>                                         <C>           <C>       <C>       <C>      <C>       <C>       <C>       <C>
ASSETS
Earning Assets:
Loans (net of unearned income) (1)                10.75%  $159,711  $ 16,882   10.57%            $138,989  $ 13,676    9.84%
Investment securities (taxable) (2)                6.76%    18,405     1,187    6.45%              16,038       951    5.93%
Investment securities                                       10,276
(non-taxable) (2) (3)                              7.67%                 515    7.59%              10,113       500    7.50%
Investment in stock (4)                            6.65%     1,221        87    7.13%                 888        61    6.87%
Federal funds sold                                 6.31%     8,790       563    6.41%               2,015       102    5.06%
Interest-bearing bank balances                     6.41%     2,748       183    6.66%               1,631        87    5.33%
                                                          --------  --------  -------            --------  --------  -------
     Total earning assets                          9.82%   201,151  $ 19,417    9.78%             169,674  $ 15,377    9.21%
                                            ============            ========  =======                      ========  =======
Non-earning assets                                          11,026                                 10,467
                                                          --------                               --------
     Total average assets                                 $212,177                               $180,141
                                                          ========                               ========
LIABILITIES & SHAREHOLDERS'
EQUITY
Liabilities:
Interest-bearing deposits:
  Interest checking                                3.10%  $ 12,168  $    382    3.14%            $ 10,409  $    251    2.41%
  Savings                                          2.43%     1,834        44    2.40%               1,758        43    2.45%
  Money market accounts                            5.40%    57,369     2,968    5.17%              55,667     2,450    4.40%
  Time deposits greater than $100M                 6.72%    37,176     2,315    6.23%              20,869     1,074    5.15%
  Other time deposits                              6.65%    45,077     2,754    6.11%              43,765     2,268    5.18%
                                            ------------  --------  --------  -------            --------  --------  -------
     Total interest-bearing deposits               5.90%   153,624     8,463    5.51%             132,468     6,086    4.59%
Federal funds purchased
 And repurchase agreements                         0.00%       254        16    6.30%                 909        46    5.06%
Other short-term borrowings                        7.88%       500        37    7.40%                 510        33    6.47%
FHLB advances                                      6.31%    14,131       878    6.21%               8,530       463    5.42%
                                            ------------  --------  --------  -------            --------  --------  -------
     Total interest-bearing liabilities            5.95%   168,509  $  9,394    5.57%             142,417  $  6,628    4.65%
                                            ============            ========  =======                      ========  =======
Noninterest bearing liabilities:
  Noninterest bearing deposits                              21,746                                 19,204
  Other noninterest bearing liabilities                      2,360                                  1,849
                                                       ------------                               --------
     Total liabilities                                     192,615                                163,470
Shareholders' equity                                        19,562                                 16,671
                                                          --------                               --------
     Total average liabilities and equity              $   212,177                               $180,141
                                                       ============                              ========
Net interest margin (5)                                             $ 10,023    5.11%                      $  8,749    5.31%
                                                                    ========  =======                      ========  =======
Interest rate spread (6)                                                        4.21%                                  4.56%
                                                                              =======                                =======



                                                                  1998
                                                                --------
                                                      Average   Income/   Yield/
                                                      Balance   Expense    Rate
                                                      --------  --------  -------
<S>                                         <C>       <C>       <C>       <C>
ASSETS
Earning Assets:
Loans (net of unearned income) (1)                    $120,488  $ 12,275   10.19%
Investment securities (taxable) (2)                     19,135     1,155    6.03%
Investment securities
(non-taxable) (2) (3)                                    8,365       413    7.49%
Investment in stock (4)                                    771        50    6.48%
Federal funds sold                                       7,242       397    5.48%
Interest-bearing bank balances                           2,047       126    6.15%
                                                      --------  --------  -------
     Total earning assets                              158,048  $ 14,416    9.26%
                                                                ========  =======
Non-earning assets                                       8,379
                                                      --------
     Total average assets                             $166,427
                                                      ========
LIABILITIES & SHAREHOLDERS'
EQUITY
Liabilities:
Interest-bearing deposits:
  Interest checking                                   $  6,931  $    155    2.24%
  Savings                                                1,643        42    2.56%
  Money market accounts                                 44,214     2,058    4.65%
  Time deposits greater than $100M                      25,316     1,445    5.71%
  Other time deposits                                   47,793     2,731    5.72%
                                                      --------  --------  -------
     Total interest-bearing deposits                   125,897     6,431    5.11%
Federal funds purchased
 And repurchase agreements                                 836        43    5.14%
Other short-term borrowings                              1,053        72    6.84%
FHLB advances                                            4,517       256    5.67%
                                                      --------  --------  -------
     Total interest-bearing liabilities                132,303  $  6,802    5.14%
                                                                ========  =======
Noninterest bearing liabilities:
  Noninterest bearing deposits                          17,502
  Other noninterest bearing liabilities                  2,203
                                                       --------
     Total liabilities                                 152,003
Shareholders' equity                                    14,424
                                                      --------
     Total average liabilities and equity             $166,427
                                                      ========
Net interest margin (5)                                         $  7,614    4.95%
                                                                ========  =======
Interest rate spread (6)                                                    4.12%
                                                                          =======

<FN>


(1)     Average  loans  are stated net of unearned income and include non-accrual loans.  Interest recognized on non-accrual
loans  has  been  included  in  interest  income.
(2)     Average  yield  on  investment securities is computed using historical cost balances; the yield information does not
give  effect  to  changes  in  fair  value  that  are  reflected  as  a  component  of  shareholders'  equity.
(3)          Yields  on nontaxable investment securities have been adjusted to a tax equivalent basis assuming a 34% Federal
tax  rate.
(4)     Includes  investments  in  stock  of  Federal  Reserve  Bank,  Federal  Home  Loan  Bank,  and  other  equities.
(5)     Net  interest  margin is computed by dividing net interest income (adjusted to a tax equivalent basis assuming a 34%
Federal  tax  rate)  by  total  average  interest-earning  assets.
(6)     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 (1) volume of
interest-earning  assets  and  interest-bearing  liabilities  (changes in volume
times  old  rate);  (2)  changes  in yields and rates (changes in rate times old
volume);  and  (3)  changes  in  rate-volume  (changes  in rate times changes in
volume).

<TABLE>
<CAPTION>


                                        VOLUME AND RATE VARIANCE ANALYSIS
                                             (DOLLARS IN THOUSANDS)

                                                  1999 - 2000                            1998 - 1999
                                       -----------------------------------   -----------------------------------
                                                                    TOTAL                                  TOTAL
                                                                   CHANGE                                 CHANGE
                                           CHANGE  RELATED  TO     IN  NII       CHANGE  RELATED  TO     IN  NII
                                       ---------------------------           --------------------------
                                                           Rate/                                 Rate/
                                        Volume    Rate     Volume             Volume    Rate    Volume
                                       --------  -------  --------           --------  -------  -------
<S>                                    <C>       <C>      <C>       <C>      <C>       <C>      <C>      <C>
EARNING ASSETS:
Loans (net of unearned income)         $ 2,039   $1,016   $   151   $3,206   $ 1,889    ($423)    ($65)  $1,401
Investment securities (taxable)            140       83        13      236      (189)     (18)       3     (204)
Investment securities (non-taxable)          8        6         1       15        86        1        0       87
Investment in stock                         23        2         1       26         8        3        0       11
Federal funds sold                         343       27        91      461      (287)     (30)      22     (295)
Interest-bearing bank balances              60       22        14       96       (26)     (17)       4      (39)
                                       --------  -------  --------  -------  --------  -------  -------  -------
     Total interest income               2,613    1,156       271    4,040     1,481     (484)     (36)     961
                                       --------  -------  --------  -------  --------  -------  -------  -------
INTEREST-BEARING LIABILITIES:
Interest-bearing deposits:
  Interest checking                         42       76        13      131        78       12        6       96
  Savings                                    2       (1)        0        1         3       (2)       0        1
  Money market accounts                     75      430        13      518       533     (112)     (29)     392
  Time deposits greater than $100M         839      226       176    1,241      (254)    (142)      25     (371)
  Other time deposits                       68      406        12      486      (230)    (254)      21     (463)
                                       --------  -------  --------  -------  --------  -------  -------  -------
     Total interest-bearing deposits     1,026    1,137       214    2,377       130     (498)      23     (345)
Federal funds purchased                    (33)      11        (8)     (30)        4       (1)       0        3
Other short-term borrowings                 (1)       5         0        4       (35)      (3)       0      (38)
FHLB advances                              304       67        44      415       228      (12)     (10)     206
                                       --------  -------  --------  -------  --------  -------  -------  -------
     Total interest expense              1,296    1,220       250    2,766       327     (514)      13     (174)
                                       --------  -------  --------  -------  --------  -------  -------  -------
NET INTEREST DIFFERENTIAL              $ 1,317     ($64)  $    21   $1,274   $ 1,154   $   30     ($49)  $1,135
                                       ========  =======  ========  =======  ========  =======  =======  =======
</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,  2000,  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 2000 of $751,000.  When the
effective  change  ratio  (the  historical relative movement of each asset's and
liability's  rates in relation to a 100 basis point change in the prime rate) is
applied  to  the  interest  gap  position,  the  Company is actually in an asset
sensitive  position over a 12 month period and the entire repricing lives of the
assets  and liabilities.  This is primarily due to the fact that over 60% of the
loan  portfolio  moves  immediately  on  a one-to-one ratio with a change in the
prime  rate,  while  the  deposit  accounts  do not increase or decrease as much
relative  to  a  prime  rate  movement.

     The  following table presents a measure, in a number of time frames, of 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, 2000
                                       Assets and Liabilities Repricing Within


                                                               3 Months    4 to 12    1 to 5   Over 5
                                                                or Less     Months     Years    Years    Total
                                                               ---------  ----------  -------  -------  --------
<S>                                                            <C>        <C>         <C>      <C>      <C>
Interest-earning assets:
Loans (net of unearned income)                                 $ 124,728  $   8,081   $46,676  $ 1,036  $180,521
Investments  (1)                                                   3,991      4,853     9,700   15,289    33,833
Federal funds sold                                                16,680          -         -        -    16,680
Interest-bearing bank balances                                     5,111          -         -        -     5,111
                                                               ---------  ----------  -------  -------  --------
   Total                                                         150,510     12,934    56,376   16,325   236,145
                                                               ---------  ----------  -------  -------  --------
Interest-bearing liabilities:
Demand deposits  (2)                                              78,462          -         -        -    78,462
Time deposits greater than $100M                                  13,867     27,153     5,503        -    46,523
Other time deposits                                               10,219     30,994     7,525        -    48,738

Federal funds purchased, FHLB advances, and other borrowings         500      3,000    12,000    1,000    16,500
                                                               ---------  ----------  -------  -------  --------
   Total                                                         103,048     61,147    25,028    1,000   190,223
                                                               ---------  ----------  -------  -------  --------
Period interest-sensitivity gap                                $  47,462   ($48,213)  $31,348  $15,325  $ 45,922
                                                               =========  ==========  =======  =======  ========
Cumulative interest-sensitivity gap                            $  47,462      ($751)  $30,597  $45,922
                                                               =========  ==========  =======  =======
<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, 2000, approximately 69% of the Company's interest-earning
assets  reprice  or  mature within one year, as compared to approximately 86% 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.



INVESTMENT  PORTFOLIO
---------------------
     The  Company  maintains  a  portfolio  of  investment securities consisting
primarily of U.S. Treasury securities, U.S. government agencies, mortgage-backed
securities,  and  state  and  municipal securities.  The investment portfolio is
designed  to  enhance liquidity while providing acceptable rates of return.  The
following  table  sets  forth  the  amortized  cost  and  the  fair value of the
investment  securities  of  the  Company  at  December 31, 2000, 1999, and 1998.
There  were  no  investments  categorized  as  "held  to maturity" as defined in
Statement  of  Financial  Accounting  Standards  ("SFAS")  115,  "Accounting for
Certain  Investments  in  Debt  and  Equity  Securities".

<TABLE>
<CAPTION>

                                  SECURITY PORTFOLIO COMPOSITION
                                      (DOLLARS IN THOUSANDS)

                                            2000                 1999               1998
                                    -------------------  -------------------   -----------------
<S>                                 <C>         <C>      <C>         <C>      <C>         <C>
                                    Amortized   Fair     Amortized   Fair     Amortized   Fair
Available for Sale:                 Cost        Value    Cost        Value    Cost        Value
                                    ----------  -------  ----------  -------  ----------  -------
          U.S. Treasury                      -        -  $      489  $   495  $    1,250  $ 1,253
          U.S. government agencies  $   17,167  $17,241      12,483   12,318       9,819    9,939
          Mortgage-backed                5,642    5,666       3,573    3,537       5,404    5,421
          State and municipal            9,584    9,538      10,829   10,116      10,124   10,489
                                    ----------  -------  ----------  -------  ----------  -------
                                    $   32,393  $32,445  $   27,374  $26,466  $   26,597  $27,102
                                    ==========  =======  ==========  =======  ==========  =======
</TABLE>

     Included  in  the  "Other assets" on the consolidated balance sheet in this
report  under  Part II, Item 8, "Financial Statements and Supplemental Data" are
amounts  for  stock  owned  by  the  Bank  as  follows:
<TABLE>
<CAPTION>

                                          2000   1999   1998
                                         ------  -----  -----
<S>                                      <C>     <C>    <C>
Federal Reserve Bank stock               $  255  $ 255  $ 255
Federal Home Loan Bank of Atlanta stock   1,000    550    479
Bankers Bank of Atlanta stock               133    133     58
                                         ------  -----  -----
                                         $1,388  $ 938  $ 792
                                         ======  =====  =====
</TABLE>

     The  amount  of  Federal  Reserve  Bank  stock owned is based on the Bank's
capital  levels.  The  amount  of Federal Home Loan Bank ("FHLB") stock owned is
determined  based  on  the Bank's balances of residential mortgages and advances
from  the FHLB.  No ready market exists for these stocks and they have no quoted
market  value.  However, redemption of these stocks has historically been at par
value.  Accordingly, the carrying amounts are deemed to be a reasonable estimate
of  fair  value.

     The  following  table indicates the estimated fair value of each investment
security  category  by  maturity  as of December 31, 2000.  The weighted average
yield  for  each  range  of  maturities at December 31, 2000 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)

                                               After 1, Within     After 5, Within
                             Within 1 Year          5 Years          10 Years          After 10 Years          Total
                            -----------------  -----------------  ----------------    ----------------   ----------------
                                    Weighted           Weighted           Weighted            Weighted            Weighted
                             Fair    Average    Fair    Average    Fair    Average    Fair     Average    Fair     Average
                            Value     Yield    Value     Yield    Value     Yield     Value     Yield     Value     Yield
                            ------  ---------  ------  ---------  ------  ---------  -------  ---------  -------  ---------
<S>                         <C>     <C>        <C>     <C>        <C>     <C>        <C>      <C>        <C>      <C>
U. S. Government agencies   $4,493      5.68%  $8,864      6.75%  $1,490      7.09%  $ 2,394      8.43%  $17,241      6.73%
Mortgage-backed                  -         -      508      6.39%   2,009      6.91%    3,149      6.87%    5,666      6.84%
State and municipal (1)          -         -      383      7.12%   1,217      7.05%    7,938      7.79%    9,538      7.67%
                            ------  ---------  ------  ---------  ------  ---------  -------  ---------  -------  ---------
     Total                  $4,493      5.68%  $9,755      6.75%  $4,716      7.00%  $13,481      7.69%  $32,445      7.03%
                            ======  =========  ======  =========  ======  =========  =======  =========  =======  =========
<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
using  historical  cost balances and effective yields for the scheduled maturity
of  each security.  The yield calculations do not give effect to changes in fair
value  that  are  reflected  as  a  component  of  shareholders'  equity.

          At  year  end,  the average maturity of the security portfolio was 6.1
years,  the  average  duration  of  the portfolio was 4.2 years, and the average
adjusted  tax  equivalent yield on the portfolio for the year ended December 31,
2000 was 6.86%.  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,  2000  were classified as "available for sale" and recorded on the
Company's  balance  sheet  at  estimated  fair  value.


LOANS
-----
          The  loan  portfolio  is  the  Company's principal earning asset.  The
following  table  shows the composition of the loan portfolio at December 31 for
each  year  presented.

<TABLE>
<CAPTION>

                                                 LOAN PORTFOLIO COMPOSITION
                                                   (DOLLARS IN THOUSANDS)

                                                 2000                  1999                 1998                 1997
                                          ------------------   ------------------   ------------------   ------------------
                                           Amount    Percent    Amount    Percent    Amount    Percent    Amount    Percent
                                          ---------  --------  ---------  --------  ---------  --------  ---------  --------
<S>                                       <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>
Commercial and industrial                 $ 31,995      17.7%  $ 26,217      17.7%  $ 24,100      18.4%  $ 25,313      21.3%
Commercial secured by real estate           62,709      34.7%    55,647      37.6%    48,527      37.1%    41,172      34.7%
Real estate - residential mortgages         52,287      29.0%    47,366      32.0%    42,832      32.8%    37,683      31.7%
Real estate - construction                  23,232      12.9%    10,135       6.9%     6,463       5.0%     3,685       3.1%
Installment and other consumer loans         6,540       3.6%     5,402       3.6%     5,656       4.3%     7,819       6.6%
Consumer finance, net of unearned income     3,542       2.0%     3,183       2.1%     2,881       2.2%     2,792       2.4%
Other loans, including overdrafts              216       0.1%       220       0.1%       210       0.2%       291       0.2%
                                          ---------  --------  ---------    ------- ---------  --------  ---------  --------
                                           180,521       100%   148,170       100%   130,669       100%   118,755       100%
                                                     ========                ======              =======              ======
Less - Allowance for loan losses            (2,560)              (2,163)              (1,827)              (1,728)
                                          ---------            ---------            ---------            ---------
Net loans                                 $177,961             $146,007             $128,842             $117,027
                                          =========            =========            =========            =========

                                                 1996
                                          -------------------
                                           Amount    Percent
                                          ---------  --------
<S>                                       <C>        <C>
Commercial and industrial                 $ 21,775      21.2%
Commercial secured by real estate           33,475      32.3%
Real estate - residential mortgages         33,140      32.2%
Real estate - construction                   4,518       4.4%
Installment and other consumer loans         7,031       6.8%
Consumer finance, net of unearned income     2,526       2.5%
Other loans, including overdrafts              227       0.2%
                                          ---------  --------
                                           102,692       100%
                                                       ======
Less - Allowance for loan losses            (1,487)
                                          ---------
Net loans                                 $101,205
                                          =========
</TABLE>


          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.
The  Company regularly monitors its credit concentrations based on loan purpose,
industry,  and  customer  base.  As of December 31, 2000, there were no material
concentrations  of  credit  risk  within  the  Company's  loan  portfolio.

          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 generally 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, 2000, 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 offset 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,  2000.

<TABLE>
<CAPTION>

                         LOAN PORTFOLIO MATURITY SCHEDULE
                              (DOLLARS IN THOUSANDS)

                                                     Over 1,
                                           1 Year   Less Than     Over
                                          or Less    5 Years    5 Years    Total
                                          --------  ----------  --------  --------
<S>                                       <C>       <C>         <C>       <C>
MATURITY DISTRIBUTION:
Commercial and industrial                 $ 19,530  $   12,465  $      -  $ 31,995
Real estate - commercial                    14,963      47,008       738    62,709
Real estate - residential                   17,794      23,566    10,927    52,287
Construction, development                   14,080       9,152         -    23,232
Installment and other consumer loans         2,437       4,085        18     6,540
Consumer finance, net of unearned income     3,542           -         -     3,542
Other loans, including overdrafts              216           -         -       216
                                          --------  ----------  --------  --------
Total                                     $ 72,562  $   96,276  $ 11,683  $180,521
                                          ========  ==========  ========  ========

INTEREST SENSITIVITY:
Total of loans with:
Predetermined interest rates              $ 12,636  $   48,577  $     72  $ 61,285
Floating interest rates                     59,926      47,699    11,611   119,236
                                          --------  ----------  --------  --------
Total                                     $ 72,562  $   96,276  $ 11,683  $180,521
                                          ========  ==========  ========  ========
</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.

          The following table summarizes the nonperforming assets at December 31
for  each  year  presented.
<TABLE>
<CAPTION>

                              NONPERFORMING ASSETS
                             (DOLLARS IN THOUSANDS)

                                      2000    1999    1998    1997    1996
                                     ------  ------  ------  ------  ------
<S>                                  <C>     <C>     <C>     <C>     <C>
Non-accrual loan                     $ 218   $ 147   $   0   $   0   $ 110
Loans past due 90 days or more         122     130     483      82     200
Troubled debt restructurings             0       0       0       0       0
Other real estate owned                  0       0       0       0       0
                                     ------  ------  ------  ------  ------
Total nonperforming assets           $ 340   $ 277   $ 483   $  82   $ 310
                                     ======  ======  ======  ======  ======
Nonperforming assets to total loans    .19%    .19%    .36%    .07%    .30%
                                     ======  ======  ======  ======  ======
</TABLE>


          The  amount  of foregone interest income that would have been recorded
on  non-accrual  loans  had these loans performed according to their contractual
terms  amounted  to  approximately  $6,000  and  $4,000  during  2000  and 1999,
respectively,  while interest income recognized on these loans was approximately
$15,000  and  $17,000  during  2000  and  1999,  respectively.

          At  December 31, 2000, the carrying value of loans that are considered
to  be  impaired  under SFAS 114 totaled $1,462,000, which includes the $218,000
non-accrual  loan.  There  were  no  impaired loans at December 31 for any other
year  presented.  The  increase  in  impaired  loans is primarily related to one
large  commercial loan. The average balance of impaired loans was $1,457,000 for
the  year ended December 31, 2000 and there was no impairment allowance required
at  year  end.  Interest  income  recognized  on  impaired loans during 2000 was
approximately  $143,000.

          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 by 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, 2000 determined to be
potential problem loans, based upon management's internal designations, was $7.9
million, or 4.4%, of the loan portfolio at year end, compared to $8.4 million or
5.7%  of  the  loan  portfolio  at  December  31, 1999.  The amount of potential
problem  loans  at December 31, 2000 does not represent management's estimate of
potential  losses  since  the  majority  of such loans are considered adequately
secured  by  real  estate  or  other  collateral.  Management  believes that the
allowance  for  loan  losses  as of December 31, 2000 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 problem loans and will attempt to 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 to absorb probable losses inherent in the loan portfolio at
December  31, 2000.  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 probable
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 credit risks through the establishment of, and adherence to, internal
credit  policies.  These policies include loan officer and loan committee 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 of collection are placed in a special review status.  The
Company's  methodology  for  evaluating  the  adequacy of the allowance for loan
losses  consists  of  a  three-tiered process.  The first tier includes specific
allocations  set  aside  for  internally graded credits as defined in the Bank's
loan policy.  The second tier is the allocation for past due and problem credits
not  considered  in  the  first  tier.  Finally,  the  third tier is the general
portion  of  the allowance which applies appropriate loss factors to segments of
the  loan  portfolio as defined in the loan policy.  The loss factors applied in
the  third  tier  may  be  adjusted  as appropriate given consideration of local
economic  conditions,  exposure  concentration  that may exist in the portfolio,
changes  in  trends  of  past  due  loans,  problem  loans  and charge-offs, and
anticipated  loan  growth.

     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.

<TABLE>
<CAPTION>

                         SUMMARY OF LOAN LOSS EXPERIENCE
                             (DOLLARS IN THOUSANDS)


                                 2000     1999     1998     1997     1996
<S>                             <C>      <C>      <C>      <C>      <C>
Balance at beginning of period  $2,163   $1,827   $1,728   $1,487   $1,068
                                -------  -------  -------  -------  -------
Charge-offs:
   Commercial & industrial         125       74       26       40       50
   Installment & consumer          309      343      382      388      337
                                -------  -------  -------  -------  -------
                                   434      417      408      428      387
                                -------  -------  -------  -------  -------
Recoveries:
   Commercial & industrial          50       51       25       55       17
   Installment & consumer          127      257      192      196      216
                                -------  -------  -------  -------  -------
                                   177      308      217      251      233
                                -------  -------  -------  -------  -------
Net charge-offs                   (257)    (109)    (191)    (177)    (154)
Provision charged to expense       654      445      290      392      516
Allocation for purchased loans       0        0        0       26       57
                                -------  -------  -------  -------  -------
Balance at end of period        $2,560   $2,163   $1,827   $1,728   $1,487
                                =======  =======  =======  =======  =======
Ratio of net charge-offs to
 average loans                     .16%     .08%     .16%     .16%     .17%
                                =======  =======  =======  =======  =======
Ratio of allowance for loan
 losses to gross loans            1.42%    1.46%    1.40%    1.46%    1.45%
                                =======  =======  =======  =======  =======
Ratio of net charge-offs to
 allowance for loan losses       10.04%    5.04%   10.45%   10.24%   10.36%
                                =======  =======  =======  =======  =======
</TABLE>


          On  December 31, 2000, the allowance for loan losses was $2.6 million,
or 1.42% of outstanding loans.  This is compared to a $2.2 million allowance for
loan  losses  at  December 31, 1999, or 1.46% of outstanding loans at that date.
For  the  year  ended  December  31, 2000, the Company reported consolidated net
charge-offs  of  $257,000,  or  0.16%  of  average  loans.  This  is compared to
consolidated  net  charge-offs  of  $109,000, or 0.08% of average loans, for the
year  ended  December  31,  1999.  During  2000,  the Company charged a total of
$654,000  to expense through its provision for loan losses, compared to $445,000
for  1999  and  $290,000  for  1998.  The  change in the provision each year was
directly related to the level of net originations in each year as follows: $32.6
million  in 2000, $17.6 million in 1999, $12.1 million in 1998, $16.0 million in
1997,  and  $27.1  million  in  1996.  Also  impacting the amount charged to the
provision each year are trends in past due, classified and problem loans as well
as  the  amount  of  each at year end; concentrations of credit risk in the loan
portfolio;  local  and  national economic conditions and anticipated trends; and
the total outstanding loans and charge-off activity of the Finance Company which
generally  have  higher  inherent risk than do loans of the Bank.  An additional
consideration in the increase to the provision for 2000 was the Bank's move into
a  new  market  and  the resulting rapid growth creating higher risk.  Estimates
charged  to  the provision for loan losses are based on management's judgment as
to  the  amount required to cover probable losses inherent in the loan portfolio
and  are  adjusted  as  necessary.

     Management  considers  the  allowance  for  loan  losses  adequate to cover
probable losses inherent in the loan portfolio at December 31, 2000.  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 provide for loan losses in the current
period  in  which  a  loss is considered probable, there are additional risks of
future  losses  which cannot be quantified precisely or attributed to particular
loans  or  classes  of  loans.  Because  these  risks  include  the state of the
economy,  industry  trends,  and  conditions  affecting  individual  borrowers,
management's  judgement  of  the  allowance  is  necessarily  approximate  and
imprecise.  No  assurance  can  be  given  that  the  Company  will  not  in any
particular  period sustain loan losses which would be sizable in relationship to
the  amount  reserved  or  that  subsequent evaluation of the loan portfolio, in
light  of  conditions  and factors then prevailing, will not require significant
changes  in  the  allowance  for loan losses or future charges to earnings.  The
allowance  for  loan  losses  is  also subject to review and approval by various
regulatory  agencies  through  their  periodic  examinations  of  the  Company's
subsidiaries.  Such  examinations  could  result  in  required  changes  to  the
allowance  for  loan  losses.  No  adjustments  in  the allowance or significant
adjustments to the Bank's internal classified loans were made as a result of the
Bank's most recent examination performed by the Office of the Comptroller of the
Currency.


COMPOSITION  OF  ALLOWANCE  FOR  LOAN  LOSSES
---------------------------------------------
     The table below presents an allocation of the allowance for loan losses for
each  of the years ended December 31 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.

<TABLE>
<CAPTION>

                                              ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
                                                      (DOLLARS IN THOUSANDS)

                                         2000                    1999                      1998                     1997
                               -----------------------  ------------------------  ----------------------  -----------------------
                                Allowance   Percent of   Allowance   Percent of   Allowance   Percent of   Allowance   Percent of
                                  Break-     Loans in      Break-     Loans in      Break-     Loans in      Break-     Loans in
                                   down      Category       down      Category       down      Category       down      Category
                                ----------  -----------  ----------  -----------  ----------  -----------  ----------  -----------
<S>                             <C>         <C>          <C>         <C>          <C>         <C>          <C>         <C>
Commercial and industrial       $    1,011        52.4%  $      879        55.3%  $      771        55.5%  $      662        56.0%
Residential real estate                741        29.0%         692        32.0%         599        32.8%         548        31.7%
Construction                           330        12.9%         148         6.9%          90         5.0%          54         3.1%
Installment, consumer finance,
  and other loans                      337         5.7%         331         5.8%         275         6.7%         253         9.2%
Unallocated                            141                      113                       92                      211
                                ----------    ---------   ---------     --------   ---------    ---------   ----------  ----------

                                $    2,560         100%  $    2,163         100%  $    1,827         100%  $    1,728         100%
                                ==========  ===========  ==========  ===========  ==========  ===========  ==========  ===========

                                          1996
                               -----------------------
                                Allowance   Percent of
                                  Break-     Loans in
                                   down      Category
                                ----------  -----------
<S>                             <C>         <C>
Commercial and industrial       $      576        53.8%
Residential real estate                477        32.3%
Construction                            65         4.4%
Installment, consumer finance,
  and other loans                      227         9.5%
Unallocated                            142
                                ----------    ---------

                                $    1,487         100%
                                ==========  ===========

</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.  At  December 31, 2000, the Company had no foreign deposits.

     The  maturity distribution of certificates of deposit greater than or equal
to  $100,000  as  of  December  31,  2000  is as follows (dollars in thousands):


<TABLE>
<CAPTION>


<S>                                     <C>
3 months or less                        $13,868
Greater than 3, but less than or equal
 to 6 months                              8,063
Greater than 6, but less than or equal
 to 12 months                            19,090
Greater than 12 months                    5,502
                                        -------
                                        $46,523
                                        =======

</TABLE>



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, 2000, 1999, and 1998
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,
                                               2000    1999    1998
                                              ------  ------  ------
<S>                                           <C>     <C>     <C>
Return on average assets                       1.25%   1.34%   1.14%
Return on average shareholders' equity        13.57%  14.45%  13.14%
Average shareholders' equity as a percent of
  average assets                               9.22%   9.25%   8.67%
</TABLE>

<PAGE>

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 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  renewal options were exercised in April 1995 and September 1998.  The
term of current renewal of the lease is five years.  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.
During April 1998, the Company entered into an agreement to lease a facility for
a  branch  located  at  800 East North Street, Greenville, South Carolina.  This
facility, which was occupied in October 1998, is approximately 8,000 square feet
and  serves  as  the third full service bank branch and as the Bank's operations
facility.  The  lease  has an initial term of seven years and includes a renewal
option  for  an additional seven year period.  During 2000, the Bank purchased a
1.1  acre  parcel  of  land  for construction of a fourth branch in Spartanburg,
South  Carolina.  The  branch  facility  is  currently under construction and is
estimated  to  be  completed  by  mid-2001.

     The  11  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 to 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,  2000.


<PAGE>

                                     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 March 1, 2001 there
were  approximately  390 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  and  low  stock  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.
Stock  price  data  has  been restated to reflect all 5% stock dividends issued.
<TABLE>
<CAPTION>

                         QUARTERLY COMMON STOCK SUMMARY

                        2000                         1999
          ------------------------------  ------------------------------
            4Q      3Q      2Q      1Q      4Q      3Q      2Q      1Q
          ------  ------  ------  ------  ------  ------  ------  ------
<S>       <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
    High  $10.48  $10.24  $10.24  $11.67  $13.33  $12.70  $13.38  $14.91
    Low   $ 8.81  $ 8.57  $ 8.57  $ 8.33  $10.48  $10.66  $10.21  $11.34

</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 14
under  Notes  to  Consolidated  Financial  Statements.


<PAGE>

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)


                                       2000       1999       1998       1997       1996
                                     ---------  ---------  ---------  ---------  ---------
INCOME STATEMENT DATA
<S>                                  <C>        <C>        <C>        <C>        <C>
Net interest income                  $ 10,023   $  8,749   $  7,614   $  6,977   $  5,583
Provision for loan losses                 654        445        290        392        516
Other income                            1,846      1,560      1,408      1,035        980
Other expenses                          7,356      6,520      5,826      5,150      4,401
Provision for income taxes              1,204        936      1,011        895        644
Net income                              2,655      2,408      1,895      1,575      1,002

PER SHARE DATA: (1)
Basic net income                     $   0.75   $   0.72   $   0.58   $   0.48   $   0.30
Diluted net income                   $   0.69   $   0.62   $   0.48   $   0.44   $   0.29
Book value per share                 $   5.98   $   5.16   $   4.69   $   4.02   $   3.59
Closing market price per share       $   9.25   $  11.43   $  13.15   $  10.70   $   5.98

BALANCE SHEET DATA (YEAR END)
Total assets                         $249,835   $191,229   $170,485   $160,279   $134,162
Loans, net of unearned income         180,521    148,170    130,669    118,755    102,692
Allowance for loan losses               2,560      2,163      1,827      1,728      1,487
Total earning assets                  236,145    181,443    159,586    151,300    126,762
Deposits                              209,191    157,996    140,243    140,928    117,805
Long-term debt                         13,000      7,000      5,000          -          -
Shareholders' equity                   21,528     17,591     15,674     13,369     11,637

BALANCE SHEET DATA (AVERAGES)
Total assets                         $212,177   $180,141   $166,432   $149,662   $121,997
Loans, net of unearned income         159,711    138,989    120,488    110,812     88,482
Total earning assets                  201,151    169,674    158,048    142,561    116,038
Deposits                              175,370    151,672    143,399    131,249    106,363
Shareholders' equity                   19,562     16,671     14,424     12,500     11,047

FINANCIAL RATIOS
Return on average assets                 1.25%      1.34%      1.14%      1.05%      0.82%
Return on average equity                13.57%     14.45%     13.14%     12.60%      9.07%
Net interest margin                      5.11%      5.31%      4.95%      4.94%      4.81%
Tier 1 risk-based capital               10.96%     11.26%     10.91%     10.43%     10.79%
Total risk-based capital                12.21%     12.51%     12.16%     11.68%     12.17%

ASSET QUALITY RATIOS
Allowance for loan losses to loans       1.42%      1.46%      1.40%      1.46%      1.45%
Net charge-offs to average loans          .16%       .08%       .16%       .16%       .17%
Nonperforming assets                 $    218   $    147          -          -   $    110

<FN>

(1)  All  per  share  data  has  been  restated  to reflect all 5% stock dividends issued.
</TABLE>


<PAGE>

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.

FORWARD-LOOKING  STATEMENTS

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

GENERAL

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

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

INCOME  STATEMENT  REVIEW

GENERAL
     The  Company  reported record earnings in 2000 which were up 10% from 1999.
Net  income  totaled  $2.7  million, or $0.69 diluted earnings per share in 2000
compared with $2.4 million, or $0.62 diluted earnings per share in 1999 and $1.9
million  or  $0.48  diluted earnings per share for 1998.  The improvement in net
income  and earnings per share between 1999 and 2000 resulted primarily from the
growth  in  earning  assets.  Increases  in other income also contributed to the
higher  net  income  in  2000.



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 net interest
income 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  2000  the  Company recorded net interest income of $10.0 million, a
15%  increase  from  the  1999  net  interest  income  of $8.7 million.  This is
compared  to  net interest income of $7.6 million for 1998.  The increase in net
interest  income  in  2000  is  directly  related to the increase in the average
earning assets and interest-bearing liability volume of the Bank of 19% and 18%,
respectively,  offset  somewhat  by  the 20 basis point decrease in net interest
margin  during  the  year.  Net interest income increased in 1999 related to the
higher average loan and interest-bearing deposit volume of the Bank which was up
from  1998  by  15% and 7%, respectively, combined with the overall reduction in
the  cost  of  funds  in  1999.

     For the year ended December 31, 2000, the Company's net interest margin was
5.11%, compared to 5.31% in 1999 and 4.95% for 1998.  The net interest margin is
calculated as net interest income divided by average earning assets.  The margin
for  2000  decreased  20  basis  points from the prior year due primarily to the
higher  cost  of funds related to the general rise in interest rates during 2000
and  promotions offered on certificates of deposit ("CDs") during the year.  The
margins  between 1999 and 1998 increased 36 basis points due to the reduction in
the  cost of funds as CDs with higher rates matured and were replaced with lower
market  rate  deposits  during  the  declining rate period between late 1998 and
mid-year  1999.

INTEREST  INCOME
     Interest income for 2000 was $19.4 million, which was a $4.0 million or 26%
increase  over  the  $15.4 million for 1999.  Interest income for 1998 was $14.4
million.  The increases each year are primarily a result of the higher levels of
earning  assets which averaged $201.2 million, $169.7 million and $158.0 million
in  2000,  1999  and  1998,  respectively.  Changes  in average yield on earning
assets  also  affect the interest income reported each year.  The average yield,
on  a fully tax equivalent basis, decreased from 9.26% in 1998 to 9.21% in 1999,
and  increased to 9.78% in 2000 due to fluctuations in the general interest rate
environment  during  the  three  year  period.

     The  majority  of  the  increase in average earning assets between 1998 and
1999  and  between  1999  and 2000 was in loans, which are the Company's highest
yielding  assets  that  accounted for 79% of average earning assets for the year
ended  2000.  Consolidated loans averaged $159.7 million in 2000 with an average
yield  of  10.57%,  compared  to $139.0 million in 1999 with an average yield of
9.84%,  and  $120.5  million  in  1998  with  an  average  yield  of  10.19%.
Approximately  68%  of  the  Company's  loan  portfolio adjusts immediately with
changes  in  the  prime  lending rate.  The average loan rate dropped in 1999 as
compared  to  1998  as  a  direct  result of the decline in the prime rate which
averaged  8.36%  in 1998 and 8.00% in 1999.  The prime rate increased in 2000 to
average 9.23% resulting in increases in the average yield on loans in 2000.  The
higher  level  of  average  loans  each  year,  combined  with  the  effect  of
fluctuations in average yield, resulted in increases in interest income on loans
of  $1.4  million  or 11% between 1998 and 1999, and $3.2 million or 23% between
1999  and  2000.

     The  second largest component of earning assets is the Company's investment
portfolio which averaged $28.7 million yielding 6.86% in 2000.  This is compared
to average securities of $26.3 million in 1999 yielding 6.50%, and $27.5 million
yielding  6.47%  for  1998.  The increase in the average yield of the investment
portfolio  is  related  to  the  timing,  maturity  distribution  and  types  of
securities  purchased,  combined  with fluctuations in the general interest rate
environment.  The changes in the level of average securities each year, combined
with  increases  in  average rate, resulted in an increase in interest income on
investments  of $251,000 or 17% between 1999 and 2000 and a decrease of $117,000
or  7%  between  1998  and  1999.

INTEREST  EXPENSE
     The  Company's interest expense for 2000 was $9.4 million, compared to $6.6
million  for  1999  and  $6.8  million  for  1998.  The 42% increase in interest
expense  in  2000  was  related  to the 18% increase in average interest-bearing
liabilities,  combined  with  the  92 basis point increase in the cost of funds.
The  reduction  in the interest expense in 1999 from 1998 was a result of the 7%
increase  in  average interest-bearing liabilities being more than offset by the
49 basis point reduction in the cost of funds.  The higher average cost of funds
in  2000 was primarily a result of the maturity of CDs renewed at higher current
market  rates  as  the  prime rate increased in the latter half of 1999 and into
2000,  combined  with  promotional  rates  offered  on  CDs  during  2000.
Interest-bearing  liabilities  averaged  $168.5  million in 2000 with an average
rate of 5.57%, compared to $142.4 million in 1999 with an average rate of 4.65%,
and  an  average  of  $132.3  million with an average rate of 5.14% during 1998.
<TABLE>
<CAPTION>

                   AVERAGE YIELDS AND RATES

                               For the Years Ended December 31,
                               --------------------------------
(on a fully tax-equivalent basis)          2000   1999    1998
                                          ------  -----  ------
<S>                                       <C>     <C>    <C>
EARNING ASSETS:
Loans                                     10.57%  9.84%  10.19%
Securities                                 6.86%  6.50%   6.47%
Short-term investments                     6.47%  5.51%   5.70%
                                          -----  ------  ------
     Total earning assets                  9.78%  9.21%   9.26%
                                          ------  -----  ------
INTEREST-BEARING LIABILITIES:
Interest-bearing deposits                  5.51%  4.59%   5.11%
Short-term borrowings                      7.41%  5.61%   6.07%
FHLB advances                              6.21%  5.42%   5.67%
                                          ------  -----  ------
     Total interest-bearing liabilities    5.57%  4.65%   5.14%
                                          ------  -----  ------
NET INTEREST MARGIN                        5.11%  5.31%   4.95%
                                          ======  =====  ======
AVERAGE PRIME INTEREST RATE                9.23%  8.00%   8.36%
                                          ======  =====  ======
</TABLE>


PROVISION  FOR  LOAN  LOSSES
     The  provision  for loan losses was $654,000 in 2000, $445,000 in 1999, and
$290,000 in 1998.  The change in the provision each year was directly related to
the  level  of  net originations in each year as follows: $32.6 million in 2000,
$17.6 million in 1999, and $12.1 million in 1998.  Other factors influencing the
amount  charged  to  the provision each year is the total amount of past due and
classified  loans and the total outstanding loans and charge-off activity of the
Finance  Company,  which  have  higher  inherent risk than do loans of the Bank.
Estimates  charged  to  the  provision for loan losses are based on management's
judgment  as  to  the  amount  required  to  cover  inherent  losses in the loan
portfolio  and  are  adjusted  as  necessary.

NONINTEREST  INCOME  AND  EXPENSES
     Noninterest  income increased $286,000 or 18%, to $1.8 million in 2000 from
$1.6 million in 1999 and $1.4 million in 1998.  Credit card fees and income, the
largest  single  item  in  noninterest income, rose 11% to $376,000 in 2000 from
$338,000  in  1999  and $298,000 in 1998.  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 approximately 50% in 2000 to $369,000 from $247,000 in 1999 and
$203,000  in  1998,  is related to the increases in the transaction fees and the
higher  number  of  Bank  deposit  accounts  and transactions subject to service
charges  and  fees.

     Insurance commission fee income increased $83,000 between 1999 and 2000 and
decreased  $32,000 between 1998 and 1999 related to fluctuations in the 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 primarily related to the
level  of  activity  in  the  Bank's nondeposit financial services and brokerage
department  which resulted in increased income of $58,000 in 2000 and a decrease
of  $29,000  in  1999.  Other  fluctuations  each year are related to the higher
level  of  activity  and transactions of the Bank generating other income in the
normal  course  of  business.

     Total noninterest expenses were $7.4 million in 2000, $6.5 million in 1999,
and  $5.8  million  in 1998.  A majority of the increased expenditures each year
reflects  the cost of additional personnel hired to support the Company's growth
and  new  bank  branches  opened  in  the  fourth quarter of 1998 and the second
quarter  of 2000.  The most significant item included in noninterest expenses is
salaries,  wages  and  benefits  which  amounted  to  $4.3 million in 2000, $3.5
million in 1999, and $3.2 million in 1998.  The increase of $780,000 in 2000 was
a  result  of  (1)  normal  annual  raises  and replacement of staff; (2) higher
profitability-related  bonus and incentives; and (3) additional staff, including
three  officers,  added  starting in April 2000 at the new branch location.  The
increase  of  $332,000  in  1999  was  a  result of (1) normal annual raises and
increases  in bonuses and incentive payments; and (2) additional branch, support
and  lending  staff  added  in  the  normal  course of business in late 1998 and
throughout  1999.

     Occupancy and furniture, fixtures, and equipment expenses increased $82,000
or  7%  to $1.3 million in 2000 from $1.2 million in 1999 and increased $172,000
from  $1.0 million in 1998.  The increase each year was related primarily to the
expenses associated with  new branch facilities which commenced in late 1998 and
mid-2000.

     Included  in  the line item "other expenses", which decreased $26,000 or 1%
between  1999 and 2000, and increased $190,000 or 12% between 1998 and 1999, 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.  A  majority of these items are
related  directly  to  the  normal operations of the Bank and are related to the
increase  in  assets,  the  higher  level  of transaction volume, and the larger
number  of customer accounts.  The reduction in 2000 is primarily related to the
Bank's  expenses  returning  to  a  normal  level after additional expenses were
incurred  in  1999  related  to  higher  repossession  and  collection  costs;
advertising  expenses  associated  with marketing new internet banking products;
and  Y2K  preparation  expenses.

INCOME  TAXES
     The Company recorded an income tax provision of $1.2 million, $936,000, and
$1.0  million  in 2000, 1999, and 1998, respectively.  The effective tax rate in
each  year  was  31%,  28%, and 35%, respectively.  The change in effective rate
each  year  is  primarily  related  to  fluctuations  in  the  level of tax-free
municipal  investments.


BALANCE  SHEET  REVIEW

INVESTMENT  SECURITIES
     At  December  31, 2000, the Company's total investment portfolio had a fair
value  of  $32.4  million,  which  is  an increase of 23% from the $26.5 million
invested  as of the end of 1999.  The investment portfolio consists primarily of
securities of United States government agencies, mortgage-backed securities, and
state and municipal obligations.  The Company has no trading account securities.
At the 2000 year end, the portfolio had a weighted average life of approximately
6.1  years and an average duration of 4.2 years.  Investment securities averaged
$28.7  million  yielding  6.86%  in  2000, compared to the 1999 average of $26.3
million  yielding 6.50%.  Securities are the second largest earning asset of the
Company  at  14%  and  16%  of  average  earning  assets  for  2000  and  1999,
respectively.


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,  2000,  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, 2000, the Company had total loans outstanding, net of
unearned income, of $180.5 million which represents an increase of $32.3 million
or  22%  from  the  1999 outstanding loans of $148.2 million.  Outstanding loans
represent  the  largest  component  of  earning assets at 79% of average earning
assets  for  2000  compared  to  82%  for  1999.  Gross  loans were 72% and 77%,
respectively,  of  total assets at December 31, 2000 and 1999.  The 22% increase
in loans between 1999 and 2000 is attributable to internal growth and the Bank's
expansion  into  a  new  market  during 2000 as the Company did not purchase any
loans  during  the  year.  Freedom's  outstanding loans, net of unearned income,
totaled  $3.5 million, or 1.9% of consolidated loans at December 31, 2000.  This
is  compared to $3.2 million or 2.1% of consolidated loans at December 31, 1999.

     For  2000,  the  Company's  loans  averaged  $159.7 million with a yield of
10.57%.  This  is compared to $139.0 million average loans with a yield of 9.84%
in  1999.  The  increase  in the loan yield reflects the general increasing rate
environment  experienced  through  2000.  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 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;  collateral  values;  and  general economic
conditions.  Finally,  management's  assessment  of  probable  losses based upon
internal  credit  grading  of  the loans and periodic reviews and assessments of
credit  risk  associated with particular loans is considered in establishing the
allowance  amount.

     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 $2.6 million or 1.42% of total loans
at  the  end  of 2000.  This is compared to a $2.2 million allowance or 1.46% of
total  loans  at  December  31, 1999.  For the year ended December 31, 2000, the
Company  reported  net  charge-offs of $257,000 or 0.16% of consolidated average
loans.  This is compared to consolidated net charge-offs of $109,000 or 0.08% of
average  loans  for  the  year  ended  December  31,  1999.

     Loans past due 90 days and greater totaled $122,000 or 0.07% of gross loans
at  December  31,  2000 compared to $130,000 or 0.09% of gross loans at December
31,  1999.  Loans on non-accrual totaled $218,000 and $147,000, respectively, at
December  31,  2000  and  1999.  Generally,  loans  of  the  Bank  are placed on
non-accrual  status at the earlier of when they are 90 days past due or when the
collection  of  the loan becomes doubtful.  Loans of the Finance Company are not
classified  as  non-accrual,  but  are  charged-off  when  such  become 150 days
contractually  past  due  or  earlier  if  the loan is deemed uncollectible.  At
December 31, 2000 and 1999, the Bank held no other real estate owned acquired in
partial  or  total  satisfaction  of problem loans.  At December 31, 2000, loans
considered  to be impaired under Statement of Financial Accounting Standards 114
totaled  $1.5 million, which includes the $218,000 non-accrual loan.  There were
no  impaired  loans  at  December  31,  1999.

INTEREST-BEARING  LIABILITIES
     During  2000,  interest-bearing liabilities averaged $168.5 million with an
average  rate  of 5.57% compared to $142.4 million with an average rate of 4.65%
in  1999.  The increase in the average rate reflects the general increasing rate
environment  experienced  throughout  2000.  In  pricing  deposits,  the Company
considers  its  liquidity  needs, the direction and levels of interest rates and
local  market  conditions.  At  December  31,  2000,  interest-bearing  deposits
comprised  approximately  83%  of  total  deposits  and  91% of interest-bearing
liabilities.  The remainder of interest-bearing liabilities consists principally
of  Federal  Home  Loan  Bank  advances.

     The  Company  uses  its deposit base as a primary source with which to fund
earning assets.  Deposits increased 32% from $158.0 million at December 31, 1999
to  $209.2  million  as  of  year  end  2000.  The increase was primarily in the
non-interest-bearing  demand  accounts,  money market accounts and time deposits
greater than $100,000.  Noninterest-bearing deposits, which increased 49% during
the  year,  averaged 12.4% of total deposits for the year 2000 compared to 12.7%
in  1999.

     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 continue to be 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.  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 represented 22% and 18%, respectively, of total
deposits  at  December 31, 2000 and 1999.  The Company has no brokered deposits.


CAPITAL  RESOURCES

     Total  shareholders'  equity  amounted  to  $21.5 million, or 8.6% of total
assets,  at  December  31,  2000.  This is compared to $17.6 million, or 9.2% of
total  assets,  at  December  31,  1999.  The  $3.9  million  increase  in total
shareholders'  equity  resulted principally from retention of earnings and stock
issued  pursuant to the Company's stock option plans, combined with the decrease
in  unrealized  loss  on  investments  available  for  sale.

     Book  value  per  share  at December 31, 2000 and 1999 was $5.98 and $5.16,
respectively.  On  November  20,  2000,  the  Company  issued its ninth 5% stock
dividend  to  shareholders  of  record  as  of  November 6, 2000.  This dividend
resulted  in the issuance of approximately 171,000 shares of the Company's $1.00
par  value common stock.  All weighted average share and per share data has been
restated  to  reflect  all  stock  dividends.

     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  following  table sets forth various capital ratios for the Company and
the Bank at December 31, 2000 and 1999.  The Company and the Bank are subject to
various  regulatory  capital  requirements  administered  by the federal banking
agencies.  At  December  31,  2000  and  1999,  the Company and the Bank were in
compliance  with  each  of  the applicable regulatory capital requirements.  The
Bank exceeded the "well-capitalized" standard under the regulatory framework for
prompt  corrective  action.
<TABLE>
<CAPTION>

                         CAPITAL SUMMARY

                               The Company            The Bank
                           -------------------   -------------------
                             As of      As of      As of      As of
                           12/31/00   12/31/99   12/31/00   12/31/99
                           ---------  ---------  ---------  ---------
<S>                        <C>        <C>        <C>        <C>
Total risk-based capital      12.21%     12.51%     10.76%     11.37%
Tier 1 risk-based capital     10.96%     11.26%      9.56%     10.16%
Leverage capital              10.13%      9.97%      8.82%      9.00%
</TABLE>


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  other  borrowings,  extensions of credit, and for the
payment  of  operating  expenses.  Maintaining an adequate level of liquidity is
accomplished  through  a combination of liquid assets, those which can easily be
converted  into  cash, and access to additional sources of funds.  The Company's
primary liquid assets are cash and due from banks, federal funds sold, unpledged
investment  securities  available  for  sale,  other  short-term investments and
maturing  loans.  These  primary  liquidity sources accounted for 15% and 13% of
average  assets  for  each  of  the  years  ended  December  31,  2000 and 1999,
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  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  and to provide funding to its consumer finance
subsidiary, Freedom Finance.  Summit Financial has approximately $2.8 million in
available liquidity remaining from its initial public offering and the retention
of  earnings.  A  total  of  $1.8  million of this liquidity was advanced to the
Finance  Company  to  fund  its  operations  as  of  December  31, 2000.  Summit
Financial  also  has  an  available line of credit totaling $2.5 million with an
unaffiliated  financial  institution, all of which was available at December 31,
2000.  Further sources of liquidity for Summit Financial include 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,  paying  operating  expenses, and servicing debt, 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.

     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
accounting  principles  generally accepted in the United States of America which
require the measurement of financial position and results of operations in terms
of  historical  dollars,  without  consideration  of  changes  in  the  relative
purchasing  power  over  time  due  to inflation.  Unlike most 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.
Approximately  48%  of  the  Company's liabilities at December 31, 2000 had been
issued with fixed terms and can be repriced only at maturity.  During periods of
rising interest rates, as experienced through 2000, the Company's assets reprice
faster  than  the  supporting  liabilities.  This  causes an increase in the net
interest  margin  until  the fixed rate deposits mature and are repriced at then
higher  current  market  rates,  thus  narrowing the difference between what the
Company  earns  on  its  assets  and what it pays on its liabilities.  Given the
Company's  current  balance  sheet  structure,  the  opposite effect (that is, a
decrease  in  net  interest  income)  is realized in a falling rate environment.

ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS

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

     SFAS  137,  "Accounting for Derivative Instruments and Hedging Activities -
Deferral  of the Effective Date of FASB Statement No. 133 - an Amendment of SFAS
133",  delayed  the  effective  date  of this statement for one year.  SFAS 138,
"Accounting  for Certain Derivative Instruments and Certain Hedging Activities -
an Amendment of Statement No. 133", addresses a limited number of issues causing
implementation difficulties for entities that apply  SFAS 133.  SFAS 133 applies
to all entities and is effective as of the beginning of the first quarter of the
fiscal  year  beginning  after  June  15,  2000.  The  Company  adopted SFAS 133
effective  January  1, 2001 with no material impact on its financial statements.

INTEREST  RATE  SENSITIVITY

     Achieving  consistent  growth  in net interest income, which is affected by
fluctuations  in  interest  rates,  is  the  primary  goal  of  the  Company's
asset/liability  function.  The  Company  attempts  to  control  the  mix  and
maturities  of  assets  and liabilities to maintain a reasonable balance between
exposure  to  interest  rate fluctuations and earnings and to achieve consistent
growth in net interest income, while maintaining adequate liquidity and capital.
A  sudden  and  substantial increase or decrease in interest rates may adversely
impact  the  Company's  earnings  to  the  extent  that  the  interest  rates on
interest-earning  assets  and  interest-bearing liabilities do not change at the
same  speed,  to  the  same  extent  or  on  the  same  basis.  The  Company's
asset/liability  mix  is  sufficiently  balanced  so that the effect of interest
rates  moving  in  either direction is not expected to be significant over time.

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

     The Company also uses interest rate sensitivity gap analysis to monitor the
relationship  between  the maturity and repricing of its interest-earning assets
and  interest-bearing  liabilities.  Interest rate sensitivity gap is defined as
the  difference  between  the  amount  of  interest-earning  assets  maturing or
repricing  within  a  specific  time  period  and the amount of interest-bearing
liabilities  maturing  or  repricing  within  the  same time period.  The static
interest  sensitivity  gap  position,  while  not a complete measure of interest
sensitivity, is also reviewed periodically to provide insights related to static
repricing  structure  of  assets  and  liabilities.  At  December 31, 2000, on a
cumulative  basis  through  12  months,  rate-sensitive  liabilities  exceed
rate-sensitive  assets,  resulting  in  a  12  month  period liability sensitive
position  of  approximately  $751,000.  When  the  effective  change  ratio (the
historical  relative  movement of each asset's and liability's rates in relation
to  a  100  basis point change in the prime rate) is applied to the interest gap
position, the Company is actually in an asset sensitive position over a 12 month
period  and  the  entire repricing lives of the assets and liabilities.  This is
primarily  due  to  the  fact that approximately 68% of the loan portfolio moves
immediately  on  a  one-to-one  ratio with a change in the prime rate, while the
deposit  accounts  do  not increase or decrease as much relative to a prime rate
movement.  The  Company's  asset  sensitive  position  means that assets reprice
faster  than  the  liabilities,  which generally results in increases in the net
interest  income  during  periods  of rising rates and decreases in net interest
income  when  market  rates  decline.

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, investing, deposit gathering and borrowing activities.
Management  actively  monitors  and  manages  its  interest  rate risk exposure.
Although the Company manages other risks, including credit quality and liquidity
risk,  in the normal course of business, management considers interest rate risk
to be its most significant market risk and it could potentially have the largest
material  effect on the Company's financial condition and results of operations.
Other  types  of  market  risks, such as foreign currency exchange rate risk and
commodity  price  risk,  do  not  arise  in  the  normal course of the Company's
business  activities.

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

     The  Company's  exposure  to  interest  rate risk is reviewed on a periodic
basis  by  the  Board  of  Directors  and  the  ALCO  which  is charged with the
responsibility  to  maintain  the  level  of  sensitivity  of  the Company's net
portfolio  value  within  Board approved limits.  Interest rate risk exposure is
measured using interest rate sensitivity analysis by computing estimated changes
in  NPV  of its cash flows from assets, liabilities, and off-balance sheet items
in  the  event  of  a  range  of assumed changes in market interest rates.  This
analysis  assesses  the risk of loss in market risk sensitive instruments in the
event  of  a sudden and sustained 100 - 300 basis points increase or decrease in
the  market  interest  rates.  The  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 year end.  At December 31, 2000, the Company's
estimated  changes  in  NPV  were  within  the  limits established by the Board.

<TABLE>
<CAPTION>


                                    Market Value
                                    of Portfolio
                          Policy       Equity      Percent
Change in Interest Rates   Limit       (000s)       Change
------------------------  -------  --------------  --------
<S>                       <C>      <C>             <C>
300 basis point rise       40.00%  $       21,366     0.75%
200 basis point rise       25.00%  $       21,407     0.56%
100 basis point rise       10.00%  $       21,499     0.13%
No change                   0.00%  $       21,528     0.00%
100 basis point decline    10.00%  $       21,158     1.72%
200 basis point decline    25.00%  $       20,633     4.16%
300 basis point decline    40.00%  $       20,162     6.35%
</TABLE>


<PAGE>

ITEM  8.          FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

<TABLE>
<CAPTION>

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

                                                                December 31,
                                                              2000       1999
                                                            ---------  ---------
<S>                                                         <C>        <C>
ASSETS
Cash and due from banks                                     $  7,604   $  3,952
Interest-bearing bank balances                                 5,111      4,399
Federal funds sold                                            16,680      1,470
Investment securities available for sale                      32,445     26,466
Loans, net of unearned income and net of allowance
 for loan losses of $2,560 and $2,163                        177,961    146,007
Premises and equipment, net                                    3,473      2,890
Accrued interest receivable                                    1,691      1,337
Other assets                                                   4,870      4,708
                                                            ---------  ---------
                                                            $249,835   $191,229
                                                            =========  =========
  LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing demand                                 $ 35,468   $ 23,823
 Interest-bearing demand                                      14,641     14,073
 Savings and money market                                     63,821     50,845
 Time deposits, $100,000 and over                             46,523     28,459
 Other time deposits                                          48,738     40,796
                                                            ---------  ---------
                                                             209,191    157,996
Federal funds purchased                                            -      4,000
Other short-term borrowings                                      500        500
FHLB advances                                                 16,000      9,000
Accrued interest payable                                       1,753      1,132
Other liabilities                                                863      1,010
                                                            ---------  ---------
     Total liabilities                                       228,307    173,638
                                                            ---------  ---------
Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000 shares
  authorized; 3,598,318 and 3,243,739 shares
  issued and outstanding                                       3,598      3,244
 Additional paid-in capital                                   16,803     14,730
 Retained earnings                                             1,425        483
 Accumulated other comprehensive income (loss), net of tax        32       (563)
 Nonvested restricted stock                                     (330)      (303)
                                                            ---------  ---------
     Total shareholders' equity                               21,528     17,591
                                                            --------    --------
                                                            $249,835   $191,229
                                                            =========  =========
<FN>

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

<PAGE>

<TABLE>
<CAPTION>


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

                                                      For the Years Ended December 31,
                                                    ----------------------------------
                                                            2000      1999      1998
                                                          --------  --------  --------
<S>                                                       <C>       <C>       <C>
Interest Income:
 Loans                                                    $16,882   $13,676   $12,275
 Taxable securities                                         1,187       951     1,155
 Nontaxable securities                                        515       500       413
 Federal funds sold                                           563       102       397
 Other                                                        270       148       176
                                                          --------  --------  --------
                                                           19,417    15,377    14,416
                                                          --------  --------  --------
Interest Expense:
 Deposits                                                   8,463     6,086     6,431
 FHLB advances                                                878       463       256
 Other                                                         53        79       115
                                                          --------  --------  --------
                                                            9,394     6,628     6,802
                                                          --------  --------  --------
     Net interest income                                   10,023     8,749     7,614
Provision for loan losses                                    (654)     (445)     (290)
                                                          --------  --------  --------
     Net interest income after provision for loan losses    9,369     8,304     7,324
                                                          --------  --------  --------

Noninterest Income:
 Service charges and fees on deposit accounts                 369       247       203
 Credit card fees and income                                  376       338       298
 Gain on sale of investment securities                         12        22         1
 Insurance commission fee income                              337       254       286
 Other income                                                 752       699       620
                                                          --------  --------  --------
                                                            1,846     1,560     1,408
                                                          --------  --------  --------
Noninterest Expenses:
 Salaries, wages and benefits                               4,279     3,499     3,167
 Occupancy                                                    630       578       494
 Furniture, fixtures and equipment                            663       633       545
 Other expenses                                             1,784     1,810     1,620
                                                          --------  --------  --------
                                                            7,356     6,520     5,826
                                                          --------  --------  --------
Income before income taxes                                  3,859     3,344     2,906
Income taxes                                               (1,204)     (936)   (1,011)
                                                          --------  --------  --------
Net income                                                $ 2,655   $ 2,408   $ 1,895
                                                          ========  ========  ========

Net income per common share:
  Basic                                                   $  0.75   $  0.72   $  0.58
  Diluted                                                 $  0.69   $  0.62   $  0.48
Average shares outstanding:
  Basic                                                     3,539     3,335     3,295
  Diluted                                                   3,869     3,913     3,950
<FN>

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

<PAGE>

<TABLE>
<CAPTION>

                                   SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                               FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
                                              (Dollars in Thousands)


                                                                                       Accumulated
                                                                                          other
                                                                                         compre-
                                                            Additional                   hensive        Nonvested
                                                   Common     paid-in     Retained    income (loss),   restricted
                                                    stock     capital     earnings         net            stock
                                                   -------  -----------  ----------  ----------------  -----------
<S>                                                <C>      <C>          <C>         <C>               <C>
Balance at December 31, 1997                       $ 2,876  $    10,908          -   $            90        ($505)
 Net income for the year ended
December 31, 1998                                        -            -      1,895                 -            -
Other comprehensive income:
Unrealized holding gains on securities
arising during the period, net of taxes of $146          -            -          -               223            -
Comprehensive income                                     -            -          -                 -            -

Stock options exercised                                 18           70          -                 -            -
Amortization of deferred
compensation on restricted stock                         -            -          -                 -          101
Issuance of 5% stock dividend                          145        1,748     (1,893)                -            -
Cash in lieu of fractional shares                        -            -         (2)                -            -
                                                   -------  -----------  ----------  ----------------  -----------
Balance at December 31, 1998                         3,039       12,726          -               313         (404)
Net income for the year ended
December 31, 1999                                        -            -      2,408                 -            -
Other comprehensive loss:
Unrealized holding losses on securities
arising during the period, net of taxes of ($531)        -            -          -              (860)           -
Less: reclassification adjustment for
gains included in net income,
net of tax of ($6)                                       -            -          -               (16)
                                                                                     ----------------
Other comprehensive loss                                 -            -          -              (876)           -
                                                                                     ----------------
Comprehensive income                                     -            -          -                 -            -

Stock options exercised                                 53          233          -                 -            -
Amortization of deferred
compensation on restricted stock                         -            -          -                 -          101
Issuance of 5% stock dividend                          152        1,771     (1,923)                -            -
Cash in lieu of fractional shares                        -            -         (2)                -            -
                                                   -------  -----------  ----------  ----------------  -----------
Balance at December 31, 1999                         3,244       14,730        483              (563)        (303)
Net income for the year ended
December 31, 2000                                        -            -      2,655                 -            -
Other comprehensive income:
Unrealized holding gains on
securities arising during the period,
net of taxes of $368                                     -            -          -               604            -
Less: reclassification adjustment
for gains included in net income,
net of tax of ($3)                                       -            -          -                (9)
 Other comprehensive income                              -            -          -               595            -
                                                                                     ----------------
Comprehensive income                                     -            -          -                 -            -

Stock options exercised                                169          392          -                 -            -
Issuance of common stock pursuant
to restricted stock plan                                14          141          -                 -         (155)
Amortization of deferred
compensation on restricted stock                         -            -          -                 -          128
Issuance of 5% stock dividend                          171        1,540     (1,711)                -            -
Cash in lieu of fractional shares                        -            -         (2)                -            -
                                                   -------  -----------  ----------  ----------------  -----------
Balance at December 31, 2000                       $ 3,598  $    16,803  $   1,425   $            32        ($330)
                                                   =======  ===========  ==========  ================  ===========





                                                        Total
                                                    shareholders'
                                                       equity
                                                   ---------------
<S>                                                <C>
Balance at December 31, 1997                       $       13,369
 Net income for the year ended
December 31, 1998                                           1,895
Other comprehensive income:
Unrealized holding gains on securities
arising during the period, net of taxes of $146               223
Comprehensive income                                        2,118
                                                   ---------------
Stock options exercised                                        88
Amortization of deferred
compensation on restricted stock                              101
Issuance of 5% stock dividend                                   -
Cash in lieu of fractional shares                              (2)
                                                   ---------------
Balance at December 31, 1998                               15,674
Net income for the year ended
December 31, 1999                                           2,408
Other comprehensive loss:
Unrealized holding losses on securities
arising during the period, net of taxes of ($531)
Less: reclassification adjustment for
gains included in net income,
net of tax of ($6)

Other comprehensive loss                                     (876)

Comprehensive income                                        1,532
                                                   ---------------
Stock options exercised                                       286
Amortization of deferred
compensation on restricted stock                              101
Issuance of 5% stock dividend                                   -
Cash in lieu of fractional shares                              (2)
                                                   ---------------
Balance at December 31, 1999                               17,591
Net income for the year ended
December 31, 2000                                           2,655
Other comprehensive income:
Unrealized holding gains on
securities arising during the period,
net of taxes of $368
Less: reclassification adjustment
for gains included in net income,
net of tax of ($3)
 Other comprehensive income                                   595

Comprehensive income                                        3,250
                                                   ---------------
Stock options exercised                                       561
Issuance of common stock pursuant
to restricted stock plan                                        -
Amortization of deferred
compensation on restricted stock                              128
Issuance of 5% stock dividend                                   -
Cash in lieu of fractional shares                              (2)
                                                   ---------------
Balance at December 31, 2000                       $       21,528
                                                   ===============
<FN>

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

<PAGE>

<TABLE>
<CAPTION>

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

                                                               For the Years Ended December 31,
                                                               --------------------------------
                                                                   2000       1999       1998
                                                                ---------  ---------  ---------
<S>                                                             <C>        <C>        <C>
Cash flows from operating activities:
  Net income                                                    $  2,655   $  2,408   $  1,895
  Adjustments to reconcile net income to net cash
provided by operating activities:
    Provision for loan losses                                        654        445        290
    Depreciation                                                     478        496        403
    (Gain) loss on sale and disposal of equipment and vehicles         -        (18)        34
    Gain on sale of securities available for sale                    (12)       (22)        (1)
    Net amortization of net premium on investment securities          30         75         56
    Amortization of deferred compensation on restricted stock        128        101        101
    (Increase) decrease in other assets                             (210)      (335)       226
    Increase (decrease) in other liabilities                         454        152       (143)
    Deferred income taxes                                           (200)      (179)      (140)
                                                                ---------  ---------  ---------
         Net cash provided by operating activities                 3,977      3,123      2,721
                                                                ---------  ---------  ---------
Cash flows from investing activities:
  Purchases of securities available for sale                     (12,415)    (7,483)   (11,406)
  Proceeds from sales of securities available for sale             5,400      1,021        951
  Proceeds from maturities of securities available for sale        1,977      5,632     11,882
  Purchases of investments in FHLB and other stock                  (450)      (146)       (84)
  Purchase of company-owned life insurance                             -          -     (1,725)
  Net increase in loans                                          (32,608)   (17,610)   (12,106)
  Purchases of premises and equipment                             (1,061)      (315)    (1,178)
  Proceeds from sale of equipment and vehicles                         -         49          -
                                                                ---------  ---------  ---------
         Net cash used by investing activities                   (39,157)   (18,852)   (13,666)
                                                                ---------  ---------  ---------
Cash flows from financing activities:
  Net increase (decrease) in deposit accounts                     51,195     17,753       (685)
  Net (decrease) increase in federal funds purchased
and repurchase agreements                                         (4,000)       433      2,763
  Proceeds from FHLB advances                                     22,000     10,550      8,500
  Repayments of FHLB advances                                    (15,000)    (9,550)    (2,500)
  Net repayments of other short-term borrowings                        -       (320)      (180)
  Proceeds from stock options exercised                              561        286         88
  Cash paid in lieu of fractional shares                              (2)        (2)        (2)
                                                                ---------  ---------  ---------
         Net cash provided by financing activities                54,754     19,150      7,984
                                                                ---------  ---------  ---------
Net increase (decrease) in cash and cash equivalents              19,574      3,421     (2,961)
Cash and cash equivalents, beginning of year                       9,821      6,400      9,361
                                                                ---------  ---------  ---------
Cash and cash equivalents, end of year                          $ 29,395   $  9,821   $  6,400
                                                                =========  =========  =========
<FN>

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

<PAGE>

                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

PRINCIPLES  OF CONSOLIDATION  -  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.  Summit Investment Services,
Inc.  is  a  wholly-owned  subsidiary  of  the  Bank  which  provides  financial
management services and nondeposit product sales.  The accompanying consolidated
financial  statements  include the accounts of the Company and its subsidiaries.
All  significant  intercompany accounts and transactions have been eliminated in
consolidation.

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

INVESTMENT  SECURITIES  -  At  the  time  of purchase, investment securities are
classified by management into three categories as follows:  (1) Investments Held
to Maturity: securities which the Company 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,  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.  Management may elect to continue accrual of interest when
the  estimated  net  realizable  value  of collateral is sufficient to cover the
principal  balances  and  accrued  interest  and  the  loan is in the process of
collection.  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 using the "Rule of 78's" method.  The
results  from  the use of the "Rule of 78's" method are not materially different
from  those  obtained  by  using  the  simple interest method.  Charges for late
payments  are  credited  to income when collected.  Loans of the Finance Company
are  generally  charged-off  when  they  become  150 days past due or when it is
determined  that  collection  is  doubtful.

IMPAIRMENT  OF  LOANS  -  Loans  are  considered  to  be  impaired  when,  in
management's  judgment,  the collection of all amounts of principal and interest
is not probable in accordance with the terms of the loan agreement.  The Company
accounts for impaired loans in accordance with Statement of Financial Accounting
Standards  ("SFAS")  114, "Accounting by Creditors for Impairment of a Loan", as
amended  by  SFAS  118  in  the  areas of disclosure requirements and methods of
recognizing  income.  SFAS  114 requires that impaired loans be recorded at fair
value,  which  is determined based upon the present value of expected cash flows
discounted  at the loan's effective interest rate, the market price of the loan,
if  available,  or the value of the underlying collateral.  All cash receipts on
impaired  loans  are  applied  to  principal until such time as the principal is
brought  current,  and  thereafter  according  to  the  contractual terms of the
agreement.  After principal has been satisfied, future cash receipts are applied
to  interest  income,  to  the extent that any interest has been foregone.  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.  Management  believes  that  the  allowance  is adequate.  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,  equipment and leasehold improvements 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  and  computer  hardware  and  software, 3 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 respective 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  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 to 7 years.  Intangible assets are included in "Other
assets"  on  the  accompanying  consolidated balance sheets and have unamortized
balances  of  $340,000 and $497,000 at December 31, 2000 and 1999, respectively,
with  related  amortization of $157,000 for each of the years ended December 31,
2000,  1999,  and  1998.

STOCK-BASED  COMPENSATION  -  The Company reports stock-based compensation using
the  intrinsic  value  method  prescribed in Accounting Principles Board Opinion
("APB")  25,  "Accounting  for  Stock  Issued  to  Employees",  which  measures
compensation  expense  as  the excess, if any, of the quoted market price of the
Company's stock at the date of the grant over the amount an employee must pay to
acquire  the  stock.  SFAS  123,  "Accounting  for  Stock-Based  Compensation",
encourages  but  does  not  require  companies  to  record compensation cost for
stock-based  compensation  plans  at  fair  value.  The  Company  follows  the
disclosure-only  provisions  of  SFAS  123.

PER  SHARE  DATA  -  Earnings  per share ("EPS") are computed in accordance with
SFAS 128, "Earnings per Share."  SFAS 128 requires companies to report basic and
diluted  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.  Shares of restricted stock that are unvested are
not  included  in weighted average shares outstanding.  Diluted EPS reflects the
potential  dilution  of  securities  that  could occur if the Company's dilutive
stock  options  were  exercised.  Weighted average share and per share data have
been  restated  to  reflect  all  5%  stock  dividends.

REPORTING  COMPREHENSIVE  INCOME  -  As  of January 1, 1998, the Company adopted
SFAS  130,  "Reporting  Comprehensive Income."  SFAS 130 requires that all items
that  are  required to be recognized under accounting standards as comprehensive
income  be  reported  in  a  financial statement that is displayed with the same
prominence  as  other financial statements.  The disclosure requirements of SFAS
130 have been included in the Company's consolidated statements of shareholders'
equity  and  comprehensive  income.

INCOME  TAXES  -  Income  taxes  are  accounted for in accordance with SFAS 109,
"Accounting  for  Income  Taxes".  Under  the asset and liability method of SFAS
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 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.

RECLASSIFICATIONS  -  Certain  amounts  in  the  1999  and  1998  consolidated
financial  statements  have  been  reclassified  to  conform  with  the  2000
presentations.  These reclassifications had no impact on shareholders' equity or
net  income  as  previously  reported.

NOTE  2  -  STATEMENT  OF  CASH  FLOWS
     For  the  purpose of reporting cash flows, cash includes currency and coin,
cash  items  in  process of collection and due from banks.  Included in cash and
cash  equivalents are federal funds sold and overnight investments.  The Company
considers  the  amounts  included in the balance sheet line items, "Cash and due
from  banks",  "Interest-bearing  bank  balances" and "Federal funds sold" to be
cash and cash equivalents.  These accounts totaled $29,395,000 and $9,821,000 at
December  31,  2000  and  1999,  respectively.

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

<TABLE>
<CAPTION>

(dollars in thousands)                2000    1999     1998
-----------------------------------  ------  -------  ------
<S>                                  <C>     <C>      <C>
Interest paid                        $8,773  $6,548   $7,120
Income taxes paid                     1,419   1,162      870
Change in fair value of investment
 securities, net of income taxes        595    (876)     223
</TABLE>


NOTE  3  -  RESTRICTIONS  ON  CASH  AND  DUE  FROM  BANKS
     The  Company's  banking  subsidiary is required to maintain average reserve
balances with the Federal Reserve Bank based upon a percentage of deposits.  The
amount  of  the  required  reserve  balance  at  December  31, 2000 and 1999 was
$850,000  and  $834,000,  respectively.


NOTE  4  -  INVESTMENT  SECURITIES
     The  aggregate  amortized  cost, fair value, and gross unrealized gains and
losses  of  investment  securities  available  for  sale  at December 31 were as
follows:
<TABLE>
<CAPTION>

(dollars in thousands)                        2000                                         1999
                          -----------------------------------------   -----------------------------------------
                                              Gross                                       Gross
                          Amortized        Unrealized         Fair    Amortized         Unrealized        Fair
                                      --------------------                        ---------------------
                             Cost        Gains      Losses    Value      Cost        Gains      Losses    Value
                          ----------  -----------  --------  -------  ----------  -----------  --------  -------
<S>                       <C>         <C>          <C>       <C>      <C>         <C>          <C>       <C>
U.S. treasury             $        -  $         -  $     -   $     -  $      489  $         6  $     -   $   495
U.S. government agencies      17,167          114      (40)   17,241      12,483            -     (165)   12,318
Mortgage-backed                5,642           33       (9)    5,666       3,573            -      (36)    3,537
States and municipal           9,584          126     (172)    9,538      10,829            3     (716)   10,116
                          ----------  -----------  --------  -------  ----------  -----------  --------  -------
                          $   32,393  $       273    ($221)  $32,445  $   27,374  $         9    ($917)  $26,466
                          ==========  ===========  ========  =======  ==========  ===========  ========  =======
</TABLE>


     The  amortized  cost  and  estimated  fair  value  of investment securities
available  for  sale at December 31, 2000, by contractual maturity, are shown in
the following table.  Expected maturities may differ from contractual maturities
because issuers may have the right to call or prepay obligations with or without
prepayment  penalties.  Fair  value  of  securities  was determined using quoted
market  prices.
<TABLE>
<CAPTION>


                                          Amortized    Fair
(dollars in thousands)                       Cost      Value
----------------------------------------  ----------  -------
<S>                                       <C>         <C>
Due in one year or less                   $    4,508  $ 4,493
Due after one year, through five years         9,678    9,755
Due after five years, through ten years        4,667    4,716
Due after ten years                           13,540   13,481
                                          ----------  -------
                                          $   32,393  $32,445
                                          ==========  =======
</TABLE>


     The  change in the unrealized gain on securities available for sale, net of
taxes, recorded in shareholders' equity for the year ended December 31, 2000 was
$595,000.  Investment  securities  with an approximate book value of $15,987,000
and  $13,045,000  at  December  31, 2000 and 1999, respectively, were pledged to
secure  public  deposits and for other purposes as required or permitted by law.
Estimated  fair values of securities pledged were $16,011,000 and $12,717,000 at
December  31, 2000 and 1999, respectively.   There were no securities classified
as "Held to Maturity" in any year presented.  Information related to the sale of
securities  classified  as  available  for  sale  for  each  year is as follows:
<TABLE>
<CAPTION>



(dollars in thousands)                       2000    1999   1998
------------------------------------------  ------  ------  -----
<S>                                         <C>     <C>     <C>
Proceeds from sales of securities           $5,400  $1,021  $ 951
Gross realized gains on securities sales        49      22      1
Gross realized losses on securities sales       37       -      -
</TABLE>


NOTE  5  -  INVESTMENTS  REQUIRED  BY  LAW
     Summit  National  Bank, as a member of the Federal Reserve Bank ("FRB") and
the Federal Home Loan Bank of Atlanta ("FHLB"), is required to own capital stock
in  these  organizations.  The  Bank's  equity  investments  required by law are
included in the accompanying consolidated balance sheets in "Other assets".  The
amount  of  stock owned is based on the Bank's capital levels in the case of the
FRB  and  totaled  $255,000  at  December 31, 2000 and 1999.  The amount of FHLB
stock  owned is determined based on the Bank's balances of residential mortgages
and  advances  from the FHLB and totaled $1,000,000 and $550,000 at December 31,
2000  and  1999, respectively.  No ready market exists for these stocks and they
have  no  quoted  market  value.  However,  redemption  of  these  stocks  has
historically been at par value.  Accordingly, the carrying amounts are deemed to
be  a  reasonable  estimate  of  fair  value.


NOTE  6  -  LOANS  AND  ALLOWANCE  FOR  LOAN  LOSSES
     A  summary  of  loans  by  classification  at  December  31  is as follows:
<TABLE>
<CAPTION>


(dollars in thousands)                       2000       1999
-----------------------------------------  ---------  ---------
<S>                                        <C>        <C>
Commercial and industrial                  $ 31,995   $ 26,217
Commercial secured by real estate            62,709     55,647
Real estate - residential mortgages          52,287     47,366
Real estate - construction                   23,232     10,135
Installment and other consumer loans          6,540      5,402
Consumer finance, net of unearned income      3,542      3,183
Other loans and overdrafts                      216        220
                                           ---------  ---------
                                            180,521    148,170
Less - allowance for loan losses             (2,560)    (2,163)
                                           ---------  ---------
                                           $177,961   $146,007
                                           =========  =========
</TABLE>


     Unearned  income  on consumer finance loans totaled $1,057,000 and $939,000
at  December  31,  2000  and  1999,  respectively.

     Loans past due in excess of 90 days and still accruing interest amounted to
approximately $122,000 and $130,000 at December 31, 2000 and 1999, respectively.
At  December  31,  2000  and  1999  the  Company  had approximately $218,000 and
$147,000,  respectively,  in non-accrual loans.  There were no non-accrual loans
at  December  31,  1998.  The amount of foregone interest income that would have
been  recorded  had  these  loans performed according to their contractual terms
amounted  to approximately $6,000 and $4,000 during 2000 and 1999, respectively,
while  interest  income  recognized on these loans was approximately $15,000 and
$17,000  during  2000  and  1999,  respectively.

     At December 31, 2000, the carrying value of loans that are considered to be
impaired  under  SFAS  114  totaled  $1,462,000,  which  includes  the  $218,000
non-accrual  loan.  There  were  no impaired loans at December 31, 1999 or 1998.
The average balance of impaired loans was $1,457,000 for the year ended December
31,  2000  and there was no impairment allowance required at year end.  Interest
income  recognized  on  impaired  loans  during 2000 was approximately $143,000.
There were no foreclosed loans or other real estate owned in any year presented.

     Changes  in  the  allowance for loan losses for the years ended December 31
were  as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)                            2000     1999     1998
-----------------------------------------------  -------  -------  -------
<S>                                              <C>      <C>      <C>
Balance, beginning of year                       $2,163   $1,827   $1,728
    Provision for losses                            654      445      290
    Loans charged-off                              (434)    (417)    (408)
    Recoveries of loans previously charged-off      177      308      217
Balance, end of year                             $2,560   $2,163   $1,827
                                                 =======  =======  =======
</TABLE>


     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.  The Company
regularly  monitors  its  credit concentrations based on loan purpose, industry,
and  customer  base.  As  of  December  31,  2000,  there  were  no  material
concentrations  of  credit  risk  within  the  Company's  loan  portfolio.

     Directors, executive officers, and associates of such persons are customers
of  and  have  transactions  with  the Company's bank subsidiary in the ordinary
course  of  business.  Included  in  such transactions are outstanding loans and
commitments,  all  of  which are made under substantially the same credit terms,
including  interest  rates  and  collateral, as those prevailing at the time for
comparable  transactions with unrelated persons and do not involve more than the
normal  risk  of  collectibility.  All loans to related parties were current and
performing  in  accordance  with  contractual  terms  at  December  31,  2000.

     The  aggregate  dollar  amount  of loans outstanding to related parties was
approximately  $5,805,000  and  $4,434,000  at  December  31,  2000  and  1999,
respectively.  During  2000,  new  loans  and  advances  on  lines  of credit of
approximately  $2,328,000  were  made,  and  payments  on  these loans and lines
totaled approximately $957,000.  At December 31, 2000, there were commitments to
extend  additional  credit  to  related  parties  in the amount of approximately
$2,508,000.

     Under  current  Federal  Reserve  regulations,  the  Bank is limited in the
amount  it  may  loan  to the Company, the Finance Company, or other affiliates.
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.  Based on these
limitations,  approximately  $4.2 million was available for loans to the Company
and  the  Finance Company at December 31, 2000.  Certain collateral restrictions
also  apply  to  loans  from  the  Bank  to  its  affiliates.


NOTE  7  -  PREMISES,  EQUIPMENT  AND  LEASES
     A  summary  of  premises  and  equipment  at  December  31  is  as follows:
<TABLE>
<CAPTION>


(dollars in thousands)                  2000      1999
------------------------------------  --------  --------
<S>                                   <C>       <C>
Land                                  $ 1,043   $   483
Building and leasehold improvements     2,118     2,094
Furniture, fixtures and equipment       2,387     2,184
Vehicles                                  161        94
Construction in progress                  207         -
                                      --------  --------
                                        5,916     4,855
Less - accumulated depreciation        (2,443)   (1,965)
                                      --------  --------
                                      $ 3,473   $ 2,890
                                      ========  ========
</TABLE>


     Depreciation  expense charged to operations totaled $478,000, $496,000, and
$403,000  in  2000,  1999  and  1998,  respectively.  The  Company leases branch
facilities for both the Bank and the Finance Company.  These leases have initial
terms  of  from two to ten years and various renewal options under substantially
the  same  terms  with  certain  rate  escalations.   Rent  expense  charged  to
operations totaled $297,000, $271,000, and $226,000, respectively, for the years
ended  December 31, 2000, 1999, and 1998.  The annual minimum rental commitments
under  the terms of the Company's noncancellable leases at December 31, 2000 are
as  follows:  (dollars  in  thousands)
<TABLE>
<CAPTION>


<S>         <C>
2001        $  270
2002           250
2003           252
2004           212
2005            54
Thereafter      22
            ------
            $1,060
            ======
</TABLE>


NOTE  8  -  DEPOSITS
     The  scheduled  maturities of time deposits subsequent to December 31, 2000
are  as  follows:  (dollars  in  thousands)
<TABLE>
<CAPTION>


<S>         <C>
2001        $82,156
2002         12,120
2003            123
2004            323
2005            463
Thereafter       76
            -------
            $95,261
            =======
</TABLE>


     The  remaining  maturity  of  time  deposits  in denominations in excess of
$100,000  is  $13,868,000  in  three  months  or  less; $8,063,000 in over three
through  six  months;  $19,090,000  in  over  six  through  twelve  months;  and
$5,502,000  in  over  twelve  months.


NOTE  9  -  FHLB  ADVANCES
     FHLB  advances  represent  borrowings  from the FHLB of Atlanta by the Bank
pursuant  to  a  line  of  credit collateralized by a blanket lien on qualifying
loans  secured by first mortgages on 1-4 family residences.  These advances have
various  maturity  dates,  terms  and repayment schedules with fixed or variable
rates of interest, payable monthly on maturities of one year or less and payable
quarterly  on  maturities  over  one  year.

     At  December  31,  2000 fixed rate FHLB advances ranged from 5.01% to 7.48%
with  initial maturities from one to ten years.  Variable rate advances based on
3  month  LIBOR had a rate of 6.53% at December 31, 2000.  Interest rates ranged
from 5.01% to 5.77% at December 31, 1999.  The weighted-average interest rate on
FHLB  advances  outstanding  at  December 31, 2000 and 1999 was 6.31% and 5.32%,
respectively.  At  December 31, 2000, advances totaling $10 million were subject
to  call  features  at the option of the FHLB with call dates ranging from March
2001  to June 2003.  Call provisions are more likely to be exercised by the FHLB
when  rates  rise.  Scheduled maturities of FHLB advances subsequent to December
31,  2000  are  $3,000,000  in  2001;  $1,000,000  in  2002; $7,000,000 in 2003;
$3,000,000  in  2004;  $1,000,000  in  2005;  and  $1,000,000  thereafter.

     Total  qualifying  loans  of  the  Bank pledged to the FHLB for advances at
December  31,  2000  were  approximately  $32 million.  The Bank has adopted the
policy of pledging excess collateral to facilitate future advances.  At December
31,  2000,  based  on  eligible  collateral  available,  the Bank had additional
available  credit  of  approximately  $8  million  from  the  FHLB.


NOTE  10  -  OTHER  BORROWINGS
     Federal funds purchased represent unsecured overnight borrowings from other
financial  institutions  by  the  Bank.  These  borrowings  bear interest at the
prevailing  market  rate for federal funds purchased.  Average interest rates on
federal  funds  purchased  were  6.04%,  5.02%,  and  5.40%  for the years ended
December  31, 2000, 1999, and 1998 respectively.  At December 31, 2000, the Bank
had  short-term  lines  of  credit  to  purchase  unsecured  federal  funds from
unrelated banks with available balances totaling $15,500,000.  The interest rate
on  any  borrowings  under  these  lines would be the prevailing market rate for
federal  funds purchased.  These lines are available to be outstanding up to ten
consecutive  days  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.

     Other  short-term  borrowings  consist  of  a  term  loan agreement with an
unrelated individual which has a maturity of less than one year.  This term loan
is  unsecured and bears interest at a fixed rate.  The weighted average interest
rate  on  short-term  borrowings outstanding at December 31, 2000, 1999 and 1998
was  7.41%,  6.50%,  and  6.91%,  respectively.

     The Company has a line of credit arrangement with a commercial bank for the
purpose of funding the loan receivables of the Finance Company.  The line, which
is  for  a total of $2.5 million, is secured by the common stock of the Bank and
bears  interest  at  the  prime  lending  rate  less  50 basis points.  The line
requires  quarterly  interest  payments and  matures in October 2001.  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,  2000  or  1999.

     The  components  of  other  interest  expense  for  each of the years ended
December  31  presented in the accompanying consolidated statements of income is
as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)        2000   1999   1998
----------------------------  -----  -----  -----
<S>                           <C>    <C>    <C>
Federal funds purchased       $  16  $  46  $   2
Other short-term borrowings      37     33    113
                              $  53  $  79  $ 115
                              =====  =====  =====
</TABLE>


NOTE  11  -  INCOME  TAXES
     The  provision  for  income  taxes  for  the  years ended December 31 is as
follows:
<TABLE>
<CAPTION>


(dollars in thousands)   2000     1999     1998
----------------------  -------  -------  -------
<S>                     <C>      <C>      <C>
Current:
  Federal               $1,287   $1,023   $1,061
  State                    117       92       90
                        -------  -------  -------
                         1,404    1,115    1,151
                        -------  -------  -------
Deferred:
  Federal                 (172)    (179)    (140)
  State                    (28)       -        -
                        -------  -------  -------
                          (200)    (179)    (140)
                        -------  -------  -------
Total tax provision     $1,204   $  936   $1,011
                        =======  =======  =======
</TABLE>


     Income  taxes  are  different  than  tax  expense  computed by applying the
statutory  federal  tax  rate of 34% to income before income taxes.  The reasons
for  the  differences  for  years  ended  December  31  are  as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)               2000     1999     1998
----------------------------------  -------  -------  -------
<S>                                 <C>      <C>      <C>
Tax expense at statutory rate       $1,312   $1,137   $  988
State tax, net of federal benefit       59       61       59
Change in valuation allowance for
 deferred tax assets                    (2)     (13)     (10)
Effect of tax exempt interest         (148)    (192)     (75)
Other, net                             (17)     (57)      49
                                    -------  -------  -------
Total                               $1,204   $  936   $1,011
                                    =======  =======  =======
</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  were  as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)                                      2000     1999
---------------------------------------------------------  -------  -------
<S>                                                        <C>      <C>
Deferred tax assets:
  Allowance for loan losses deferred for tax purposes      $  842   $  700
  Book depreciation and amortization in excess of tax         125       90
  Unrealized net losses on securities available for sale        -      345
  Other                                                        54       33
                                                           -------  -------
          Gross deferred tax assets                         1,021    1,168
          Less: valuation allowance                             -       (2)
                                                           -------  -------
          Net deferred tax assets                           1,021    1,166
                                                           -------  -------
Deferred tax liabilities:
  Net deferred loan costs                                      (5)     (15)
  Unrealized net gains on securities available for sale       (20)       -
  Compensation expense deferred for financial reporting       (92)     (82)
                                                           -------  -------
          Gross deferred tax liabilities                     (117)     (97)
                                                           -------  -------
Net deferred tax asset                                     $  904   $1,069
                                                           =======  =======
</TABLE>


     The  net  deferred  tax  asset  is  included  in  "Other  assets"  in  the
accompanying  consolidated  balance  sheets.  A portion of the change in the net
deferred  tax  asset  relates  to  unrealized  gains  and  losses  on securities
available for sale for which a current period deferred tax expense of ($365,000)
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
benefit  of  $200,000.  The decreases in the valuation allowance for each of the
years  ended  December  31,  2000  and 1999 were based on actual earnings of the
Company  for  those  years.  In management's opinion, it is more likely than not
that the results of future operations will generate sufficient income to realize
the net deferred tax asset and no valuation allowance is considered necessary at
December  31,  2000.


NOTE  12  -  OTHER  INCOME  AND  OTHER  EXPENSES
     The  components  of  other operating income for the years ended December 31
are  as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)                2000   1999   1998
------------------------------------  -----  -----  -----
<S>                                   <C>    <C>    <C>
Late charges and other loan fees      $ 216  $ 235  $ 215
Nondeposit product sales commission     206    148    177
Other                                   330    316    228
                                      -----  -----  -----
                                      $ 752  $ 699  $ 620
                                      =====  =====  =====
</TABLE>


          The  components  of  other  operating  expenses  for  the  years ended
December  31  are  as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)                     2000    1999    1998
----------------------------------------  ------  ------  ------
<S>                                       <C>     <C>     <C>
Advertising and public relations          $  176  $  251  $  200
Stationary, printing and office support      364     314     324
Credit card service expense                  298     277     231
Legal and professional fees                  240     311     239
Amortization of intangibles                  157     157     157
Other                                        549     500     469
                                          ------  ------  ------
                                          $1,784  $1,810  $1,620
                                          ======  ======  ======
</TABLE>


NOTE  13  -  CAPITAL  STOCK  AND  PER  SHARE  INFORMATION
     On November 20, 2000, the Company issued a 5% stock dividend.  The dividend
was issued to all shareholders of record on November 6, 2000 and resulted in the
issuance  of  171,119  shares of common stock of the Company.  All average share
and  per  share  data  have  been  retroactively  restated  to reflect the stock
dividend  as  of  the  earliest  period  presented.

     As  of  December  31,  2000, there were approximately 790,000 common shares
reserved  for  issuance  under  stock  compensation  benefit  plans,  of  which
approximately  246,000  were  available  for  issuance.

     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>


                                         2000                    1999                    1998
                                ---------------------   ---------------------   ----------------------
                                  Basic      Diluted      Basic      Diluted      Basic      Diluted
<S>                             <C>         <C>         <C>         <C>         <C>         <C>
Net income                      $2,655,000  $2,655,000  $2,408,000  $2,408,000  $1,895,000  $1,895,000
                                ----------  ----------  ----------  ----------  ----------  ----------
Average shares outstanding       3,538,981   3,538,981   3,334,556   3,334,556   3,294,880   3,294,880
Effect of dilutive securities:
   Stock options                         -     293,930           -     543,816           -     608,591
   Unvested restricted stock             -      36,226           -      35,007           -      46,676
                                ----------  ----------  ----------  ----------  ----------  ----------
                                 3,538,981   3,869,137   3,334,556   3,913,379   3,294,880   3,950,147
                                ----------  ----------  ----------  ----------  ----------  ----------
Per share amount                $     0.75  $     0.69  $     0.72  $     0.62  $     0.58  $     0.48
                                ==========  ==========  ==========  ==========  ==========  ==========
</TABLE>


NOTE  14  -  REGULATORY  CAPITAL  REQUIREMENTS  AND  DIVIDEND  RESTRICTIONS
     The  Company  and  the  Bank  are  subject  to  various  regulatory capital
requirements  administered  by  the  federal  banking agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory  and  possibly
additional discretionary actions by regulators that, if undertaken, could have a
material  effect on the financial statements.  Under capital adequacy guidelines
and  the  regulatory framework for prompt corrective action, the Company and the
Bank must meet specific capital guidelines that involve quantitative measures of
the  Company's  and the Bank's assets, liabilities and certain off-balance sheet
items  as  calculated  under regulatory accounting practices.  The Company's and
the  Bank's  capital  amounts and classification are also subject to qualitative
judgments  by  the  regulators  about  components,  risk  weightings,  and other
factors.

     The  Company  and  the  Bank  are  required to maintain minimum amounts and
ratios  of total risk-based capital, Tier I capital, and Tier I leverage capital
as  set  forth  in the table following.  Management believes, as of December 31,
2000,  that  the  Company and the Bank meet all capital adequacy requirements to
which  they are subject.  At December 31, 2000 and 1999, the Bank is categorized
as  "well  capitalized"  under  the  regulatory  framework for prompt corrective
action.  There  are  no  current  conditions  or events that management believes
would  change  the  Company's  or  the  Bank's  category.

     The  following  table  presents the Company's and the Bank's actual capital
amounts  and  ratios  at  December  31,  2000  and  1999  as well as the minimum
calculated  amounts  for  each  regulatory  defined  category.

<TABLE>
<CAPTION>

                                                                               To Be
                                                          For Capital       Categorized
                                                            Adequacy          "Well
(dollars  in  thousands)                    Actual          Purposes        Capitalized"
------------------------               ----------------  ---------------  ---------------
                                        Amount   Ratio   Amount   Ratio   Amount   Ratio
                                        -------  ------  -------  ------  -------  ------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF DECEMBER 31, 2000
The Company
--------------------------------------
Total capital to risk-weighted assets   $23,937  12.21%  $15,688   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $21,486  10.96%  $ 7,844   4.00%  N.A.
Tier 1 capital to average assets        $21,486  10.13%  $ 8,487   4.00%  N.A.
The Bank
--------------------------------------
Total capital to risk-weighted assets   $20,822  10.76%  $15,474   8.00%  $19,343  10.00%
Tier 1 capital to risk-weighted assets  $18,490   9.56%  $ 7,737   4.00%  $11,606   6.00%
Tier 1 capital to average assets        $18,490   8.82%  $ 8,387   4.00%  $10,483   5.00%

AS OF DECEMBER 31, 1999
The Company
--------------------------------------
Total capital to risk-weighted assets   $19,955  12.51%  $12,765   8.00%  N.A.
Tier 1 capital to risk-weighted assets  $17,960  11.26%  $ 6,383   4.00%  N.A.
Tier 1 capital to average assets        $17,960   9.97%  $ 7,206   4.00%  N.A.
The Bank
--------------------------------------
Total capital to risk-weighted assets   $17,907  11.37%  $12,596   8.00%  $15,745  10.00%
Tier 1 capital to risk-weighted assets  $15,995  10.16%  $ 6,298   4.00%  $ 9,447   6.00%
Tier 1 capital to average assets        $15,995   9.00%  $ 7,111   4.00%  $ 8,890   5.00%
</TABLE>


     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.  The  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, 2000,
no  cash  dividends  have  been  declared  or  paid by the Bank and the Bank had
available  retained  earnings  of  $10  million.


NOTE  15  -  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 approximately 281,000 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,  2000,  there  were 73,044 shares 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 amortized
over  a  five-year  vesting  period  as the restrictions lapse.  Included in the
accompanying  consolidated  statements  of  income  under the caption "Salaries,
wages  and  benefits"  is $128,000, $101,000, and $101,000 of amortized deferred
compensation for the years ended December 31, 2000, 1999 and 1998, respectively.

     The  Company has two Incentive Stock Option Plans (one approved in 1989 and
one  in  1999) and a Non-Employee Stock Option Plan (collectively referred to as
stock-based  option plans).  Under the Incentive Stock Option Plans, 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
Incentive  Stock  Option  Plans  authorize the granting of stock options up to a
maximum  of  approximately  958,000  shares of common stock, however, 800,000 of
these  reserved  shares  are under the 1989 Plan which has expired.  At December
31,  2000,  approximately 6,000 option shares were available to be granted under
these  plans.

     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  non-employee  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.  The  Non-Employee  Stock  Option  Plan authorizes the
granting  of  stock  options  up to a maximum of approximately 352,000 shares of
common  stock.  At  December  31,  2000, approximately 31,000 option shares were
available  to  be  granted  under  this  plan.

     All  outstanding  options  and  option  activity for all stock-based option
plans  have  been  retroactively restated to reflect the effects of all 5% stock
dividends  issued.

     A  summary  of the activity under the stock-based option plans for the year
ended  December  31  is  as  follows:
<TABLE>
<CAPTION>


                                 2000                   1999                    1998
                          --------------------   -------------------   --------------------
                                     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     953,203   $    5.45  1,021,678   $    5.29  1,005,307   $    4.88
Granted                    144,690   $    9.22     16,884   $   12.76     53,340   $   13.43
Canceled                   (28,507)  $    7.72    (29,370)  $    7.17    (16,932)  $    7.75
Exercised                 (177,954)  $    3.01    (55,989)  $    3.66    (20,037)  $    4.48
                          ---------   --------   ---------   --------   ---------   --------
Outstanding, December 31   891,432   $    6.48    953,203   $    5.45  1,021,678   $    5.29
                          =========  =========  ==========  =========  ==========  =========
Exercisable, December 31   512,032   $    5.53    629,503   $    4.64    522,724   $    4.14
                          =========  =========  ==========  =========  ==========  =========
</TABLE>


     The  following table summarizes information about stock options outstanding
under  the  stock-based  option  plans  at  December  31,  2000:
<TABLE>
<CAPTION>


                                  OPTIONS OUTSTANDING              OPTIONS EXERCISABLE
                           -----------------------------------    --------------------
                                          Weighted
                                           Average    Weighted                Weighted
                              Number      Remaining    Average     Number      Average
                              Options    Contractual  Exercise     Options    Exercise
Range of Exercise Prices:   Outstanding     Life        Price    Exercisable    Price
                            -----------  -----------  ---------  -----------  ---------
<S>                         <C>          <C>          <C>        <C>          <C>
2.26  -  $2.90                  15,384     .7 years  $    2.53       15,384  $    2.53
3.47  -  $4.18                 169,219    3.8 years  $    4.15      169,219  $    4.15
5.60                           277,199    4.8 years  $    5.60      129,185  $    5.60
6.07 - $6.17                   226,239    6.2 years  $    6.17      175,970  $    6.17
8.33 - $9.05                   126,836    8.9 years  $    8.99        4,376  $    8.33
10.00 - $12.14                  35,118    9.0 years  $   10.67        2,040  $   12.04
13.82 - $14.06                  41,437    7.6 years  $   13.84       15,858  $   13.83
                            -----------   ----------  ---------   ----------  --------
2.26  - $14.06                 891,432    5.8 years  $    6.48      512,032  $    5.53
                            ===========  ===========  =========  ===========  =========
</TABLE>


     The  Company  follows  APB  25 to account for its stock-based option plans.
Accordingly, no compensation cost has been recognized for the stock-based 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  2000, 1999, and 1998 consistent with the provisions of SFAS 123, the
Company's  net  income and diluted earnings per share would have been reduced to
the  proforma  amounts  as  follows:
<TABLE>
<CAPTION>


(dollars, except per share, in thousands)   2000    1999    1998
-----------------------------------------  ------  ------  ------
<S>                                        <C>     <C>     <C>
Net income - as reported                   $2,655  $2,408  $1,895
Net income - proforma                      $2,398  $2,167  $1,705
Diluted earnings per share - as reported   $ 0.69  $ 0.62  $ 0.48
Diluted earnings per share - proforma      $ 0.62  $ 0.55  $ 0.43
</TABLE>


     The weighted average fair value per share of options granted in 2000, 1999,
and  1998  amounted  to $5.32, $7.64, and $8.34, respectively.  Fair values were
estimated on the date of grant using the Black-Scholes option-pricing model with
the  following assumptions used for grants: expected volatility of 63.5%, 79.5%,
and  49.1%  for  2000,  1999  and 1998, respectively; risk-free interest rate of
4.95%,  6.00%,  and  4.54%  for 2000, 1999, and 1998, respectively; and expected
lives  of the options of 4.9 years, 4.6 years, and 7.5 years for 2000, 1999, and
1998,  respectively.  There  were  no  cash  dividends  in  any  year.


NOTE  16  -  CONTINGENT  LIABILITIES
     In  the  normal  course  of  business, the Company and its subsidiaries are
periodically  subject  to various pending or threatened lawsuits in which claims
for  monetary  damages  may  be  asserted.  In  the  opinion  of  the  Company's
management,  after  consultation  with  legal  counsel,  none of this litigation
should  have  a  material  adverse effect on the Company's financial position or
results  of  operations.


NOTE  17  -  EMPLOYEE  BENEFIT  PLANS
     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 as a percent of
deferred  compensation  were  6%  for each year 2000, 1999 and 1998.  A total of
$124,000,  $113,000,  and  $106,000,  respectively,  in 2000, 1999, and 1998 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 completion of five years of service, as
defined  in  the  Plan.

     During  1998,  Summit  National  Bank  entered  into  salary  continuation
agreements  with  several  key  management  employees, all of whom are officers.
Under the agreements, the Bank is obligated to provide for each such employee or
his  beneficiaries,  during  a  period  of  20 years after the employee's death,
disability,  or  retirement,  annual  benefits ranging from $38,000 to $113,000.
The  estimated present value of future benefits to be paid is being accrued over
the  period  from  the  effective  date  of  the  agreements  until the expected
retirement  dates  of the participants.  The expense incurred and amount accrued
for  this  nonqualified salary continuation plan, which is an unfunded plan, for
the  years  ended  December 31, 2000, 1999 and 1998 amounted to $56,000, $52,000
and  $49,000,  respectively.  To partially finance benefits under this plan, the
Bank purchased and is the beneficiary of life insurance policies.  Proceeds from
the  insurance  policies  are  payable  to  the  Company  upon  the death of the
participant.  The  cash  surrender  value  of  these  policies  included  in the
accompanying  consolidated  balance  sheets in "Other assets" was $1,919,000 and
$1,831,000  at  December  31,  2000  and  1999,  respectively.


NOTE  18  -  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, 2000 the Company's commitments to extend additional credit,
including obligations under the Company's revolving credit card program, totaled
approximately  $48,580,000,  of  which  approximately  $5,326,000  represents
commitments  to extend credit at fixed rates of interest.  Commitments to extend
credit  at  fixed rates expose 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 $3,576,000 at December
31,  2000.  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  19  -  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
     SFAS 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 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 bank balances, federal funds sold, federal funds purchased, 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, reduced by an
estimate  of  credit losses inherent in the portfolio.  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,
reduced  by  an  estimate  of credit losses inherent in the portfolio.  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 variable rate interest-bearing
accounts  is  equal  to  the  carrying  value.  Certificate  of deposit accounts
maturing during 2001 are valued at their carrying value.  Certificate of deposit
accounts  maturing  after  2001  are  estimated  by  discounting cash flows from
expected  maturities  using current interest rates on similar instruments.  Fair
value  for  FHLB  advances  is  based on discounted cash flows using the current
market  rate.

     The estimated fair market value of commitments to extend credit and standby
letters  of  credit  are  equal to their carrying value as the majority of these
off-balance  sheet  instruments  have relatively short terms to maturity and are
written  with  variable  rates  of  interest.

     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 as of
December  31  are  as  follows:
<TABLE>
<CAPTION>


(dollars in thousands)                            2000                     1999
                                          ----------------------  ----------------------
                                          Carrying    Estimated   Carrying    Estimated
                                           Amount    Fair Value    Amount    Fair Value
                                          ---------  -----------  ---------  -----------
<S>                                       <C>        <C>          <C>        <C>
Financial Assets:
Cash and due from banks                   $   7,604  $     7,604  $   3,952  $     3,952
Interest-bearing bank balances                5,111        5,111      4,399        4,399
Federal funds sold                           16,680       16,680      1,470        1,470
Investment securities available for sale     32,445       32,445     26,466       26,466
Loans, net                                  177,961      172,234    146,007      143,840
Financial Liabilities:
Deposits                                    209,191      209,814    157,996      158,646
Federal funds purchased                           -            -      4,000        4,000
Other short-term borrowings                     500          500        500          500
FHLB advances                                16,000       15,875      9,000        9,100
</TABLE>


NOTE  20  -  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 all 5% stock
dividends  issued):
<TABLE>
<CAPTION>


(dollars  in  thousands,
except  per  share  data)                              2000                                         1999
--------------------------          ------------------------------------------    ----------------------------------------
                                       First     Second      Third     Fourth      First     Second      Third     Fourth
                                      Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
<S>                                  <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Interest income                      $  4,281   $  4,498   $  5,140   $  5,498   $  3,565   $  3,690   $  3,991   $  4,131
Interest expense                       (1,877)    (2,059)    (2,634)    (2,824)    (1,520)    (1,584)    (1,737)    (1,787)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net interest income                     2,404      2,439      2,506      2,674      2,045      2,106      2,254      2,344
Provision for loan losses                 (93)      (105)      (119)      (337)       (81)      (129)      (108)      (127)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net interest income after
  provision for loan losses             2,311      2,334      2,387      2,337      1,964      1,977      2,146      2,217
Noninterest income                        402        433        430        581        394        390        369        407
Noninterest expenses                   (1,753)    (1,801)    (1,824)    (1,978)    (1,563)    (1,550)    (1,661)    (1,746)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Income before income taxes                960        966        993        940        795        817        854        878
Income taxes                             (308)      (297)      (309)      (290)      (228)      (235)      (237)      (236)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net income                                652        669        684        650        567        582        617        642
Unrealized net holding (loss)
  gain on securities, net of taxes
  and reclassification of gains in
  net income                              (66)        33        296        332       (190)      (312)      (218)      (156)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Comprehensive income                 $    586   $    702   $    980   $    982   $    377   $    270   $    399   $    486
                                     =========  =========  =========  =========  =========  =========  =========  =========
NET INCOME PER SHARE:
   Basic                             $   0.19   $   0.19   $   0.19   $   0.18   $   0.17   $   0.18   $   0.18   $   0.19
   Diluted                           $   0.17   $   0.17   $   0.18   $   0.17   $   0.15   $   0.15   $   0.16   $   0.16
AVERAGE COMMON SHARES
 OUTSTANDING:
   Basic                                3,483      3,523      3,544      3,561      3,321      3,325      3,330      3,357
   Diluted                              3,889      3,852      3,855      3,878      3,960      3,964      3,908      3,912
</TABLE>


NOTE  21  -  SEGMENT  INFORMATION
     The  Company reports information about its operating segments in accordance
with  SFAS  131,  "Disclosures  about  Segments  of  an  Enterprise  and Related
Information".  Summit  Financial  Corporation  is the parent holding company for
Summit National Bank ("Bank"), a nationally chartered bank, and Freedom Finance,
Inc.  ("Finance"),  a  consumer  finance  company.  Through its bank subsidiary,
which  commenced  operations  in July 1990, the Company provides a full range of
banking  services,  including  offering demand and time deposits, commercial and
consumer loans, and nondeposit investment services.  The Bank currently has four
full-service  branches  in  Greenville  and  Spartanburg,  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  eleven  offices  throughout  South Carolina. The Company
considers  the  Bank  and  the  Finance  Company  separate  business  segments.
Financial  performance  for  each  segment  is detailed in the following tables.
Included  in the "Corporate" column are amounts for general corporate activities
and  eliminations  of  intersegment  transactions.

<TABLE>
<CAPTION>



(dollars in thousands)         Bank      Finance    Corporate     Total
---------------------------  ---------  ---------  -----------  ---------
<S>                          <C>        <C>        <C>          <C>
AT AND FOR THE YEAR ENDED
 DECEMBER 31, 2000
Interest income              $ 17,787   $  1,744        ($114)  $ 19,417
Interest expense               (9,356)      (342)         304     (9,394)
                             ---------  ---------  -----------  ---------
Net interest income             8,431      1,402          190     10,023
Provision for loan losses        (495)      (159)           -       (654)
Noninterest income              1,562        332          (48)     1,846
Noninterest expenses           (5,847)    (1,514)           5     (7,356)
                             ---------  ---------  -----------  ---------
Income before income taxes      3,651         61          147      3,859
Income taxes                   (1,155)         6          (55)    (1,204)
                             ---------  ---------  -----------  ---------
Net income                   $  2,496   $     67   $       92   $  2,655
                             =========  =========  ===========  =========
Net loans                    $176,088   $  3,314      ($1,441)  $177,961
                             =========  =========  ===========  =========
Total assets                 $247,360   $  4,000      ($1,525)  $249,835
                             =========  =========  ===========  =========

AT AND FOR THE YEAR ENDED
 DECEMBER 31, 1999
Interest income              $ 13,761   $  1,713         ($97)  $ 15,377
Interest expense               (6,594)      (284)         250     (6,628)
                             ---------  ---------  -----------  ---------
Net interest income             7,167      1,429          153      8,749
Provision for loan losses        (265)      (180)           -       (445)
Noninterest income              1,262        346          (48)     1,560
Noninterest expenses           (4,998)    (1,512)         (10)    (6,520)
                             ---------  ---------  -----------  ---------
Income before income taxes      3,166         83           95      3,344
Income taxes                     (874)       (29)         (33)      (936)
                             ---------  ---------  -----------  ---------
Net income                   $  2,292   $     54   $       62   $  2,408
                             =========  =========  ===========  =========
Net loans                    $144,285   $  2,932      ($1,210)  $146,007
                             =========  =========  ===========  =========
Total assets                 $188,769   $  3,748      ($1,288)  $191,229
                             =========  =========  ===========  =========

AT AND FOR THE YEAR ENDED
 DECEMBER 31, 1998
Interest income              $ 12,912   $  1,577         ($73)  $ 14,416
Interest expense               (6,731)      (286)         215     (6,802)
                             ---------  ---------  -----------  ---------
Net interest income             6,181      1,291          142      7,614
Provision for loan losses        (146)      (144)           -       (290)
Noninterest income              1,156        300          (48)     1,408
Noninterest expenses           (4,260)    (1,550)         (16)    (5,826)
                             ---------  ---------  -----------  ---------
Income before income taxes      2,931       (103)          78      2,906
Income taxes                   (1,020)        35          (26)    (1,011)
                             ---------  ---------  -----------  ---------
Net income                   $  1,911       ($68)  $       52   $  1,895
                             =========  =========  ===========  =========
Net loans                    $127,327   $  2,660      ($1,145)  $128,842
                             =========  =========  ===========  =========
Total assets                 $168,072   $  3,634      ($1,221)  $170,485
                             =========  =========  ===========  =========
</TABLE>

NOTE  22  -  PARENT  COMPANY  FINANCIAL  INFORMATION
     The  following  is  condensed  financial  information  of  Summit Financial
Corporation  (parent  company  only)  at  December 31, 2000 and 1999 and for the
years  ended  December  31,  2000,  1999  and  1998.
<TABLE>
<CAPTION>

                SUMMIT FINANCIAL CORPORATION
                  CONDENSED BALANCE SHEETS

                                         December 31,
(dollars in thousands)                  2000     1999
                                       -------  -------
<S>                                    <C>      <C>
ASSETS
Cash                                   $ 1,053  $   267
Investment in bank subsidiary           18,522   15,432
Investment in nonbank subsidiary           120       53
Due from subsidiaries                    1,860    1,879
                                       -------  -------
                                       $21,555  $17,631
                                       =======  =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accruals and other liabilities         $    27  $    40
Shareholders' equity                    21,528   17,591
                                       -------  -------
                                       $21,555  $17,631
                                       =======  =======
</TABLE>


<TABLE>
<CAPTION>

                SUMMIT FINANCIAL CORPORATION
               CONDENSED STATEMENTS OF INCOME

                              For the Years Ended December 31,
(dollars in thousands)                2000     1999     1998
                                     -------  -------  -------
<S>                                  <C>      <C>      <C>
Interest income                      $  191   $  153   $  176
Interest expense                          -       (1)     (33)
                                     -------  -------  -------
Net interest income                     191      152      143
Noninterest expenses                    (43)     (57)     (65)
                                     -------  -------  -------
Net operating income                    148       95       78
Equity in undistributed net income
 of subsidiaries                      2,562    2,346    1,843
                                     -------  -------  -------
Income before taxes                   2,710    2,441    1,921
Income taxes                            (55)     (33)     (26)
                                     -------  -------  -------
Net income                           $2,655   $2,408   $1,895
                                     =======  =======  =======
</TABLE>


<TABLE>
<CAPTION>

                  SUMMIT FINANCIAL CORPORATION
              CONDENSED STATEMENTS OF CASH FLOWS

                                                    For the Years Ended December 31,
(dollars in thousands)                                    2000      1999      1998
                                                        --------  --------  --------
<S>                                                     <C>       <C>       <C>
Operating activities:
Net income                                              $ 2,655   $ 2,408   $ 1,895
Adjustments to reconcile net income to net cash
  provided by operating activities:
Equity in undistributed net income of subsidiaries       (2,562)   (2,346)   (1,843)
Decrease in other assets                                      -         2         1
(Decrease) increase in other liabilities                    (13)        2        (9)
Amortization of deferred compensation                       128       101       101
                                                        --------  --------  --------
     Net cash provided by operating activities              208       167       145
                                                        --------  --------  --------
INVESTING ACTIVITIES:
Net decrease (increase) in due from subsidiary               19       (15)       66
Net (decrease) increase in due to subsidiary                  -        (3)        3
                                                        --------  --------  --------
     Net cash provided (used) by investing activities        19       (18)       69
                                                        --------  --------  --------
FINANCING ACTIVITIES:
Repayments of notes payable                                   -      (320)     (180)
Employee stock options exercised                            561       286        88
Cash paid in lieu of fractional shares                       (2)       (2)       (2)
                                                        --------  --------  --------
     Net cash provided (used) by financing activities       559       (36)      (94)
                                                        --------  --------  --------
Net increase in cash and cash equivalents                   786       113       120
Balance, beginning of year                                  267       154        34
                                                         -------  --------  --------
Balance, end of year                                    $ 1,053   $   267   $   154
                                                        ========  ========  ========
</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, 2000
and  1999,  and  the  related  consolidated  statements of income, shareholders'
equity  and  comprehensive  income  and  cash flows for each of the years in the
three-year  period  ended  December  31,  2000.  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 auditing standards generally
accepted  in the United States of America.  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, 2000 and 1999, and the
results  of  their  operations and their cash flows for each of the years in the
three-year  period  ended  December  31,  2000,  in  conformity  with accounting
principles  generally  accepted  in  the  United  States  of  America.

                                               /s/  KPMG  LLP

Greenville,  South  Carolina
January  19,  2001


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 under the headings
"Election  of  Directors",  "Executive  Officers and Compensation", and "Section
16(a)  Beneficial  Ownership  Reporting  Compliance"  in  the  definitive  Proxy
Statement of the Company filed in connection with its 2001 Annual Meeting of the
Shareholders,  which  information  is  incorporated  herein  by  reference.

ITEM  11.     EXECUTIVE  COMPENSATION

     The  information  required  by  this  item  is set forth under the headings
"Directors'  Compensation"  and  "Executive  Officers  and  Compensation" in the
definitive  Proxy  Statement  of  the  Company filed in connection with its 2001
Annual  Meeting  of  Shareholders,  which  information is incorporated herein by
reference.

ITEM  12.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required  by  this  item  is set forth under the headings
"Stock  Ownership" and "Election of Directors" in the definitive Proxy Statement
of the Company filed in connection with its 2001 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 headings
"Compensation  Committee Interlocks and Insider Participation" and "Transactions
with  Management"  in  the  definitive  Proxy  Statement of the Company filed in
connection  with  its  2001 Annual Meeting of Shareholders, which information is
incorporated  herein  by  reference.

<PAGE>
                                     PART IV

ITEM  14.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES AND 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,  2000  and  1999
          Consolidated  Statements  of  Income  For The Years Ended December 31,
             2000,  1999,  and  1998
          Consolidated  Statements  of  Shareholders'  Equity  And Comprehensive
             Income  For The  Years Ended  December 31,  2000,  1999, and  1998
          Consolidated Statements of Cash Flows For The Years Ended December 31,
             2000,  1999,  and  1998
          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
Exhibit 3.1 filed with the Registrant's Registration Statement on Form S-1 under
The  Securities  Act  of  1933,  File  No.  33-31466).

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

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

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

     10.2     Lease  Agreement  for  North  Pleasantburg  Drive  Bank  Site
(incorporated  by  reference  to  Exhibit  10.2  filed  with  the  Registrant's
Registration  Statement  on  Form S-1 under The Securities Act of 1933, File No.
33-31466).

     10.3     Employment Agreement of J. Randolph Potter dated December 21, 1998
(incorporated  by  reference  to Exhibit 10.3 filed with the Registrant's Annual
Report  on  Form 10-K for the year ended December 31, 1998, File No. 000-19235).

     10.4     Employment  Agreement  of  Blaise B. Bettendorf dated December 21,
1998  (incorporated  by  reference  to  Exhibit 10.4 filed with the Registrant's
Annual  Report  on  Form  10-K  for  the  year ended December 31, 1998, File No.
000-19235).

     10.5     Summit  Financial  Corporation Restricted Stock Plan (incorporated
by  reference  to Exhibit 10.5 filed with the Registrant's Annual Report 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 Exhibit 10.6 filed with the Registrant's Annual
Report  on  Form 10-K for the year ended December 31, 1994, File No. 000-19235).

10.7     Employment  Agreement  of  James  B.  Schwiers  dated September 2, 1999
(incorporated  by  reference  to Exhibit 10.7 filed with the Registrant's Annual
Report  on  Form 10-K for the year ended December 31, 1999, File No. 000-19235).

10.8     Summit Financial Corporation 1999 Incentive Stock Plan (incorporated by
reference to Exhibit 10.8 filed with the Registrant's Annual Report on Form 10-K
for  the  year  ended  December  31,  1999,  File  No.  000-19235).

10.9     Employment  Agreement  of  James  G.  Bagnal  dated  April  20,  2000.

10.10     Lease  Agreement  for  East  north  Street  Bank  Site

10.11     Salary Continuation Agreement of J. Randolph Potter dated September 9,
1998.

10.12     Salary  Continuation Agreement of Blaise B. Bettendorf dated September
9,  1998.

10.13     Salary  Continuation Agreement of James B. Schwiers dated September 9,
1998.

     21     Subsidiaries  of  Summit  Financial  Corporation:
               Summit  National  Bank, a nationally chartered bank, incorporated
                  in  South  Carolina
               Summit Investment Services, Inc., a subsidiary of Summit National
                  Bank,  incorporated  in  South  Carolina
               Freedom  Finance,  Inc., a consumer finance company, incorporated
                  in  South  Carolina

     23     Consent  of  KPMG 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).



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  2000.

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

                              SUMMIT  FINANCIAL  CORPORATION
                                /s/  J.  Randolph  Potter
                              ---------------------------
Dated:  March  19,  2001                    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 19, 2001
--------------------------
J. Randolph Potter          Officer and Director

  /s/ Blaise B. Bettendorf  Senior Vice President        March 19, 2001
--------------------------
Blaise B. Bettendorf        (Principal Financial and
                            Accounting Officer)
  /s/ C. Vincent Brown      Chairman                     March 19, 2001
--------------------------
C. Vincent Brown

 /s/ John A. Kuhne          Vice Chairman                March 19, 2001
--------------------------
John A. Kuhne

  /s/ David C. Poole        Secretary                    March 19, 2001
--------------------------
David C. Poole

  /s/ James G. Bagnal, III  Director                     March 19, 2001
--------------------------
James G. Bagnal, III

  /s/ Ivan E. Block         Director                     March 19, 2001
--------------------------
Ivan E. Block

  /s/ J. Earle Furman, Jr.  Director                     March 19, 2001
--------------------------
J. Earle Furman, Jr.

 /s/ John W. Houser         Director                     March 19, 2001
--------------------------
John W. Houser

 /s/ T. Wayne McDonald      Director                     March 19, 2001
--------------------------
T. Wayne McDonald

 /s/ Allen H. McIntyre      Director                     March 19, 2001
--------------------------
T. Wayne McDonald

  /s/ Larry A. McKinney     Director                     March 19, 2001
--------------------------
Larry A. McKinney

  /s/ James B. Schwiers     Director                     March 19, 2001
--------------------------
James B. Schwiers

  /s/ George O. Short, Jr.  Director                     March 19, 2001
--------------------------
George O. Short, Jr.
</TABLE>