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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
D.C.   20549FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF
1934

| | FOR QUARTER ENDED: | JUNE 30, 2002 | 
| | ------------------ | ------------- | 

COMMISSION FILE NUMBER:   0-11108SUMMIT BANCSHARES,
INC.STATE OF CALIFORNIA         I.R.S. IDENTIFICATIONNUMBER  94-27670672969 BROADWAY, OAKLAND
CALIFORNIA      94611(510)   839-8800

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.YESX      NO

The number of shares outstanding of the registrants common stock was1,854,328 shares of no par value common stockas of JUNE 30, 2002

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|PART I - FINANCIAL INFORMATION                             
|-----------------------------------------------------------
|                                                           
|ITEM 1                                                     
|                                                           
|SUMMIT BANCSHARES, INC. AND SUBSIDIARY FINANCIAL STATEMENTS
|                                                           
|                                                           
|                                                           
|                                                           
|                                                           
|                                                           
|                                                           
|                                                           
|ITEM 2                                                     
|                                                           
|                                                           
|                                                           
|ITEM 3                                                     
|                                                           
|                                                           
|PART II - OTHER INFORMATION                                
|                                                           
|                                                           
|ITEMS 1-6                                                  





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ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS

SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OFFINANCIAL POSITION JUNE 30, 2002 AND DECEMBER 31,
2001

|                                                                                                                               |  |   |             |  |   |            
|------------------------------------------------------------------------------------------------------------------------------ |  | - | ----------- |  | - | -----------
|                                                                                                                               |  |   | Unaudited   |  |   | Audited    
|ASSETS                                                                                                                         |  |   | 06/30/02    |  |   | 12/31/01   
|                                                                                                                              
|Cash and due from banks                                                                                                        |  | $ | 11,518,470  |  | $ | 5,532,202  
|Federal funds sold                                                                                                             |  |   | 16,945,000  |  |   | 20,070,000 
|                                                                                                                               |  |   |             | 
|Cash and cash equivalents                                                                                                      |  |   | 28,463,470  |  |   | 25,602,202 
|Time deposits with other financial institutions                                                                                |  |   | 22,246,026  |  |   | 27,189,613 
|Investment securities (fair value of $2,044,637 at     June 30, 2002 and $2,074,688 at    December 31, 2001 ) held to
maturity |  |   | 2,021,767   |  |   | 2,029,750  
|Loans:                                                                                                                         |  | $ | 95,915,357  |  | $ | 88,648,893 
|Less: allowance for loan losses                                                                                                |  | $ | 1,555,022   |  | $ | 1,506,750  
|                                                                                                                               |  |   |             |  |   |            
|Net loans                                                                                                                      |  |   | 94,360,335  |  |   | 87,142,143 
|Premises and equipment, net                                                                                                    |  |   | 750,511     |  |   | 804,115    
|Interest receivable and other assets                                                                                           |  |   | 5,264,409   |  |   | 4,884,324  
|                                                                                                                               |  |   |             | 
|                                                                                                                               |  |   |             |  |   |            
|Total Assets                                                                                                                   |  | $ | 153,106,518 |  | $ | 147,652,147
|                                                                                                                               |  |   |             | 
|                                                                                                                               |  |   |             |  |   |            
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                           |  |   |             |  |   |            
|Deposits:                                                                                                                      |  |   |             |  |   |            
|Demand                                                                                                                         |  | $ | 45,508,471  |  | $ | 38,484,086 
|Interest-bearing transaction accounts                                                                                          |  |   | 38,669,401  |  |   | 48,553,348 
|Savings                                                                                                                        |  |   | 3,232,923   |  |   | 2,566,402  
|Time certificates $100,000 and over                                                                                            |  |   | 32,396,077  |  |   | 32,420,495 
|Other time certificates                                                                                                        |  |   | 13,641,613  |  |   | 6,719,637  
|                                                                                                                               |  |   |             | 
|Total Deposits                                                                                                                 |  |   | 133,448,485 |  |   | 128,743,968
|Interest payable and other liabilities                                                                                         |  |   | 1,004,331   |  |   | 698,311    
|                                                                                                                               |  |   |             | 
|Total Liabilities                                                                                                              |  |   | 134,452,816 |  |   | 129,442,279
|Shareholders Equity                                                                                                           |  |   |             |  |   |            
|Preferred Stock, no par value:                                                                                                 |  |   |             |  |   |            
|2,000,000 shares authorized, no shares outstanding                                                                             |  |   | 0           |  |   | 0          
|Common Stock, no par value:                                                                                                    |  |   |             |  |   |            
|3,000,000 shares authorized;                                                                                                   |  |   |             |  |   |            
|1,854,328 shares outstanding at June 30, 2002 and 1,850,492 shares outstanding at December 31, 2001                            |  |   | 3,764,953   |  |   | 3,752,486  
|Retained Earnings                                                                                                              |  |   | 14,888,749  |  |   | 14,457,382 
|                                                                                                                               |  |   |             | 
|Total Shareholders Equity                                                                                                     |  |   | 18,653,702  |  |   | 18,209,868 
|                                                                                                                               |  |   |             | 
|                                                                                                                              
|Total Liabilities and Shareholders Equity                                                                                     |  | $ | 153,106,518 |  | $ | 147,652,147
|                                                                                                                               |  |   |             | 

The accompanying notes are an integral part of these consolidated financial statements

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SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                    (UNAUDITED)

|                                              | THREE MONTHS  |           | THREE MONTHS  |   | SIX MONTHS    |  | SIX MONTHS   
|--------------------------------------------- | ------------- | --------- | ------------- | - | ------------- |  | -------------
|                                              | ENDED 6-30-02 |           | ENDED 6-30-01 |   | ENDED 6-30-02 |  | ENDED 6-30-01
|INTEREST INCOME:                              |               |           |               |   |               |  |              
|Interest and fees on loans                    | $             | 2,107,595 |               | $ | 2,017,823     |  | $            
|Interest on time deposits with other          |               |           |               |   |               |  |              
|financial institutions                        |               | 283,013   |               |   | 365,439       |  |              
|Interest on U.S. government                   |               |           |               |   |               |  |              
|treasury securities                           |               | 22,259    |               |   | 38,742        |  |              
|Interest on federal funds sold                |               | 106,841   |               |   | 338,804       |  |              
|                                              |               |           |               |   |               |  |              
|Total interest income                         |               | 2,519,708 |               |   | 2,760,808     |  |              
|                                              |               |           |               |   |               |  |              
|INTEREST EXPENSE:                             |               |           |               |   |               |  |              
|Interest on deposits                          |               | 769,837   |               |   | 740,851       |  |              
|                                              |               |           |               |   |               |  |              
|Total interest expense                        |               | 769,837   |               |   | 740,851       |  |              
|                                              |               |           |               |   |               |  |              
|Net interest income                           |               | 1,749,871 |               |   | 2,019,957     |  |              
|Provision for loan losses                     |               | 15,000    |               |   | 35,000        |  |              
|                                              |               |           |               |   |               |  |              
|Net interest income after                     |               |           |               |   |               |  |              
|provision for loan losses                     |               | 1,734,871 |               |   | 1,984,957     |  |              
|                                              |               |           |               |   |               |  |              
|NON-INTEREST INCOME:                          |               |           |               |   |               |  |              
|Service charges on deposit accounts           |               | 54,084    |               |   | 63,133        |  |              
|Other customer fees and charges               |               | 28,631    |               |   | 22,511        |  |              
|                                              |               |           |               |   |               |  |              
|Total non-interest income                     |               | 82,715    |               |   | 85,644        |  |              
|                                              |               |           |               |   |               |  |              
|NON-INTEREST EXPENSE:                         |               |           |               |   |               |  |              
|Salaries and employee benefits                |               | 678,888   |               |   | 667,695       |  |              
|Occupancy expense                             |               | 73,353    |               |   | 85,733        |  |              
|Equipment expense                             |               | 92,535    |               |   | 61,995        |  |              
|Other                                         |               | 285,744   |               |   | 294,976       |  |              
|                                              |               |           |               |   |               |  |              
|Total non-interest expense                    |               | 1,130,520 |               |   | 1,110,399     |  |              
|Income before income taxes                    |               | 687,066   |               |   | 960,202       |  |              
|Provision for income taxes                    |               | 285,480   |               |   | 400,034       |  |              
|                                              |               |           |               |   |               |  |              
|Net Income                                    | $             | 401,586   |               | $ | 560,168       |  | $            
|                                              |               |           |               |   |               |  |              
|                                              |               |           |               |   |               |  |              
|EARNINGS PER SHARE:                           |               |           |               |   |               |  |              
|Earnings per common share                     | $             | 0.22      |               | $ | 0.29          |  | $            
|Earnings per common share assuming dilution   | $             | 0.21      |               | $ | 0.30          |  | $            
|Weighted average shares outstanding           |               | 1,854,328 |               |   | 1,846,224     |  |              
|Weighted avg. shrs. outsdg. assuming dilution |               | 1,871,894 |               |   | 1,860,344     |  |              
|                                              |               |           |               |   |               |  |              

The accompanying notes are an integral part of these consolidated financial statements

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SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGESIN SHAREHOLDERS EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001(UNAUDITED)

|                                               | NUMBER OFSHARESOUTSTANDING |   | COMMONSTOCK |   | RETAINEDEARNINGS |   | TOTAL      |  
|---------------------------------------------- | -------------------------- | - | ----------- | - | ---------------- | - | ---------- | -
|                                               |                            |   |             |   |                  |   |            |  
|Balance at December 31, 2000                   | 1,837,548                  | $ | 3,699,017   | $ | 13,136,106       |   | 16,835,123 |  
|                                               |                            |   |             |   |                  |   |            |  
|Stock Options Exercised                        | 12,944                     |   | 53,469      |   | 0                |   | 53,469     |  
|                                               |                            |   |             |   |                  |   |            |  
|Repurchase of Common Stock                     | 0                          |   | 0           |   | 0                |   | 0          |  
|                                               |                            |   |             |   |                  |   |            |  
|Issuance of cash dividends of $.1875 per share | 0                          |   | 0           |   | (347,047         | ) | (347,047   | )
|                                               |                            |   |             |   |                  |   |            |  
|Net Income                                     | 0                          |   | 0           |   | 1,195,660        |   | 1,195,660  |  
|                                               |                            |   |             |   |                  |   |            |  
|                                               |                            |   |             |   |                  |   |            |  
|Balance at June 30, 2001                       | 1,850,492                  | $ | 3,752,486   | $ | 13,984,719       | $ | 17,737,205 |  
|                                               |                            |   |             |   |                  |   |            |  
|                                               |                            |   |             |   |                  |   |            |  
|Balance at December 31, 2001                   | 1,850,492                  | $ | 3,752,486   | $ | 14,457,382       | $ | 18,209,868 |  
|                                               |                            |   |             |   |                  |   |            |  
|Stock Options Exercised                        | 3,836                      |   | 12,467      |   | 0                |   | 12,467     |  
|                                               |                            |   |             |   |                  |   |            |  
|Issuance of cash dividends of $.1875 per share | 0                          |   | 0           |   | (347,686         | ) | (347,686   | )
|                                               |                            |   |             |   |                  |   |            |  
|Net Income                                     | 0                          |   | 0           |   | 779,053          |   | 779,053    |  
|                                               |                            |   |             |   |                  |   |            |  
|                                               |                            |   |             |   |                  |   |            |  
|Balance at June 30, 2000                       | 1,854,328                  | $ | 3,764,953   | $ | 14,688,749       | $ | 18,653,702 |  
|                                               |                            |   |             |   |                  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.

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SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OFCASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)

|                                                                                  | SIX MONTHSENDED 6-30-02 | SIX MONTHSENDED 6-30-01
|--------------------------------------------------------------------------------- | ----------------------- | -----------------------
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |                         |                        
|Interest received                                                                 | $                       | 4,207,535              
|Fees received                                                                     |                         | 714,684                
|Interest paid                                                                     |                         | (1,252,898             
|Cash paid to suppliers and employees                                              |                         | (2,268,251             
|Income taxes paid                                                                 |                         | (443,820               
|                                                                                  |                         |                        
|Net cash provided by operating activities                                         |                         | 957,250                
|                                                                                  |                         |                        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |                         |                        
|(Increase) decrease in time deposits with other financial institutions            |                         | 4,943,587              
|Maturity of investment securities                                                 |                         | 7,983                  
|Purchase of investment securities                                                 |                         | 0                      
|Net (increase) decrease in loans to customers                                     |                         | (7,366,129             
|Recoveries on loans previously charged-off                                        |                         | 18,632                 
|(Increase) decrease in premises and equipment                                     |                         | (69,353                
|                                                                                  |                         |                        
|Net cash provided by (used in) investing activities                               |                         | (2,465,280             
|                                                                                  |                         |                        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |                         |                        
|Increase (decrease) in demand, interest bearing transaction, and savings deposits |                         | (2,193,041             
|Net increase (decrease) in time deposits                                          |                         | 6,897,558              
|Exercise of stock options                                                         |                         | 12,467                 
|Repurchase of common stock (decrease)                                             |                         | 0                      
|Dividends paid (decrease)                                                         |                         | (347,686               
|                                                                                  |                         |                        
|Net cash provided by (used in) financing activities                               |                         | 4,369,298              
|                                                                                  |                         |                        
|Net increase (decrease) in cash and cash equivalents                              |                         | 2,861,268              
|Cash and cash equivalents at the beginning of the year                            |                         | 25,602,202             
|                                                                                  |                         |                        
|Cash and cash equivalents at the end of 6-30-02 and 6-30-01                       | $                       | 28,463,470             
|                                                                                  |                         |                        
|RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:       
|Net Income                                                                        | $                       | 779,053                
|Adjustments to reconcile net income to net cash provided by operating activities: |                         |                        
|Depreciation and amortization                                                     |                         | 122,957                
|Provision for loan losses and OREO losses                                         |                         | 32,000                 
|(Increase) decrease in interest receivable                                        |                         | (380,085               
|Increase (decrease) in unearned loan fees                                         |                         | 97,305                 
|Increase (decrease) in Int Pay and Other Liab                                     |                         | 306,020                
|Total adjustments                                                                 |                         | 178,197                
|                                                                                  |                         |                        
|Net cash provided by operating activities                                         |                         | 957,250                
|                                                                                  |                         |                        

The accompanying notes are an integral part of these consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the unaudited interim consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the
Companys financial position at June 30, 2002 and the results of operations for the three months and six months ended June 30, 2002 and 2001 and cash flows for the six months ended June 30, 2002 and 2001.

Certain information and footnote disclosures presented in the Companys annual consolidated financial statements are not included in these interim financial statements. Accordingly, the accompanying unaudited
interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys 2001 Annual Report to Shareholders, which is incorporated by reference in the
Companys 2001 annual report on Form 10-K. The results of operations for the three months and six months ended June 30, 2002 are not necessarily indicative of the operating results for the full year.

2.       COMPREHENSIVE INCOME

The Company had no items of other comprehensive income for the three
month and six-month periods ended June 30, 2002 and 2001. Accordingly, total comprehensive income was equal to net income for each of those periods

3.       SEGMENT REPORTING

The Company is principally engaged in community banking activities through the three banking
offices of its subsidiary bank. The community banking activities include accepting deposits, providing loans and lines of credit to local individuals and businesses, and investing in investment securities and money market instruments. The three
banking offices have been aggregated in to a single reportable segment. Because the Companys financial information is internally evaluated as a single operating segment, no separate segment information is presented. The combined results are
reflected in these financial statements.

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4.       EARNINGS PER SHARE

The following table
reconciles the numerator and denominator of the basic and diluted earnings per share computations:

|                                  | Net Income(Loss)                    | WeightedAvg. Shares | Per ShareAmount
|--------------------------------- | ----------------------------------- | ------------------- | ---------------
|                                  | For the quarter ended June 30, 2002
|                                 
|Basic Earnings (Loss) per share   | $402                                |                     |                
|Stock Options                     |                                     |                     |                
|Diluted Earnings (Loss) per share | $402                                |                     |                

|                                  | Net Income(Loss)                    | WeightedAvg. Shares | Per ShareAmount
|--------------------------------- | ----------------------------------- | ------------------- | ---------------
|                                  | For the quarter ended June 30, 2001
|                                 
|Basic Earnings (Loss) per share   | $560                                |                     |                
|Stock Options                     |                                     |                     |                
|Diluted Earnings (Loss) per share | $560                                |                     |                

|                                  | Net Income(Loss)                       | WeightedAvg. Shares | Per ShareAmount
|--------------------------------- | -------------------------------------- | ------------------- | ---------------
|                                  | For the six months ended June 30, 2002
|                                 
|Basic Earnings (Loss) per share   | $779                                   |                     |                
|Stock Options                     |                                        |                     |                
|Diluted Earnings (Loss) per share | $779                                   |                     |                

|                                  | Net Income(Loss)                       | WeightedAvg. Shares | Per ShareAmount
|--------------------------------- | -------------------------------------- | ------------------- | ---------------
|                                  | For the six months ended June 30, 2001
|                                 
|Basic Earnings (Loss) per share   | $1,196                                 |                     |                
|Stock Options                     |                                        |                     |                
|Diluted Earnings (Loss) per share | $1,196                                 |                     |                

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For the periods reported, the Company had no reconciling items between net income (loss) and income (loss) available to common shareholders.5.   NEW
ACCOUNTING PROUNOUNCEMENTS The Financial Accounting Standards Board Statement of Financial Accounting Standards No. 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS 138, establishes
accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The
Company adopted SFAS 133 on January 1, 2001. The implementation of this statement did not have a material impact on the Companys financial position or result of operations.

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INTEREST RATE SENSITIVITY/INTEREST RATE RISK ANALYSIS

The following table provides an interest rate sensitivity and interest rate risk analysis for the quarter ended June 30, 2002. The table
presents each major category of interest-earning assets and interest bearing-liabilities.

INTEREST RATE RISK REPORTING SCHEDULE

|REPORTING INSTITUTION: SUMMIT BANK |  | REPORTING DATE: 6-30-02
|---------------------------------- |  | -----------------------

|      |  |    |  |                                            |  | REMAINING TIME BEFORE MATURITY OR INTEREST RATE ADJUSTMENT
|----- |  | -- |  | ------------------------------------------ |  | ----------------------------------------------------------
|      |  |    |  |                                            |  | ($000.00) OMITTED TOTAL                                   
|      |  |    |  |                                            |  |                                                           
|I.    |  |    |  | EARNING ASSETS                             |  |                                                           
|      |  |    |  |                                            |  |                                                           
|      |  | A. |  | INVESTMENTS:                               |  |                                                           
|      |  | 1. |  | U. S. TREASURIES                           |  | $                                                         
|      |  | 2. |  | U. S. AGENCIES                             |  |                                                           
|      |  | 3. |  | FED FUNDS SOLD                             |  |                                                           
|      |  | 4. |  | PURCHASED CDS                              |  |                                                           
|      |  |    |  |                                            |  |                                                           
|      |  |    |  | TOTAL INVESTMENTS                          |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|      |  |    |  |                                            |  |                                                           
|      |  | B. |  | LOANS                                      |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|      |  |    |  | TOTAL LOANS                                |  | $                                                         
|      |  | C. |  | TOTAL EARNING ASSETS                       |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|II.   |  |    |  | COST OF FUNDS (DEPOSITS)                   |  |                                                           
|      |  |    |  |                                            |  |                                                           
|      |  | A. |  | CERTIFICATE OF DEPOSITS                    |  | $                                                         
|      |  | B. |  | MONEY MARKET ACCOUNTS                      |  |                                                           
|      |  | C. |  | TRANSACTION ACCOUNTS                       |  |                                                           
|      |  | D. |  | SAVINGS ACCOUNTS                           |  |                                                           
|      |  |    |  |                                            |  |                                                           
|      |  |    |  | TOTAL COST OF FUNDS                        |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|III.  |  |    |  | INTEREST SENSITIVE ASSETS                  |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|IV.   |  |    |  | INTEREST SENSITIVE      LIABILITIES        |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|V.    |  |    |  | GAP                                        |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|VI.   |  |    |  | CUMULATIVE GAP                             |  | $                                                         
|      |  |    |  |                                            |  |                                                           
|VII.  |  |    |  | GAP RATIO                                  |  |                                                           
|      |  |    |  |                                            |  |                                                           
|VIII. |  |    |  | CUMULATIVE RATIO                           |  |                                                           
|      |  |    |  |                                            |  |                                                           
|IX.   |  |    |  | GAP AS A % OF TOTAL ASSETS                 |  |                                                           
|      |  |    |  |                                            |  |                                                           
|X.    |  |    |  | CUMULATIVE GAP AS A % OF      TOTAL ASSETS |  |                                                           

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ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2001

The registrant, Summit
Bancshares, Inc. (the Company) is a financial holding company whose only operating subsidiary is Summit Bank (the Bank). The following discussion primarily concerns the financial condition and results of operations of the
Company on a consolidated basis including the subsidiary Bank. All adjustments made in the compilation of this information are of a normal recurring nature.



FINANCIAL CONDITION

Liquidity Management

The consolidated loan-to-deposit ratio
at June 30, 2002 was 70.7%, which was an increase from 63.3% for the same period in 2001. Total outstanding loans as of June 30, 2002 increased $13,352,407 compared to the same period a year ago while total deposits increased $5,494,706 versus the
same time last year. The increase in loans and deposits was mainly due to Summits effort in marketing its products and the formation of the Real Estate Capital Markets Group. The average loan-to-deposit ratio at the end of the second quarter
of 2002 was 66.2%, an increase from 60.7% for the same period last year. This increase was caused by an increase in average total deposits of $10,871,047 or 8.3% while average total loans increased $14,596,222 or 19.6%.

One of the Companys customers manages accounts for medical offices and physicians. This customer has brought approximately 80 of the accounts they manage to the Company. As of June 30, 2002
the aggregate monthly average balance in these accounts was approximately $16,000,000.

This customer has notified the Bank that due to the expiration of a contract and its merger with
an affiliated company, approximately $9,000,000 of the deposit relationship will be moving to the affiliates bank in Southern California. It is anticipated that these accounts will move by the end of the third quarter.

In anticipation of the transfer of those accounts, the Bank purchased brokered CDs to assist in the outflow of funds. The increase in the deposit accounts is partially reflective of the purchase of
brokered CDs.

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Net liquid assets, which consists primarily of cash, due from banks, interest-bearing deposits with other financial institutions, investment securities and Federal
Funds sold totaled $50,709,496 on June 30, 2002. This amount represented 38.0% of total deposits in comparison to the liquidity ratio of 46.7% as of June 30, 2001. This decrease is primarily a result of a proportionately higher rise in loan growth
than the corresponding increase in deposits. It is managements belief that the current liquidity level is sufficient to meet current needs. The Company is not aware of any current recommendations by the regulatory authorities, which, if they
were implemented, would have a material effect on the Company.

The following table sets forth book value of investments by category and the percent of total investments at the dates
specified.

Investment Comparative($000.00 Omitted)

|                          | 6-30-02 | %   | 12-31-01 | %   | 6-30-01 | %  
|------------------------- | ------- | --- | -------- | --- | ------- | ---
|                         
|Fed funds sold            | $16,945 | 41% | $20,070  | 41% | $29,670 | 58%
|Interest bearing Deposits | 22,246  | 54% | 27,189   | 55% | 19,076  | 38%
|Securities                | 2,022   | 5%  | 2,030    | 4%  | 2,037   | 4% 

Interest bearing deposits are comprised of Time Certificates of Deposit with other banks and savings and
loan institutions with no more than $100,000 in any institution.

Securities on June 30, 2002 were comprised of U.S. Govt agencies.

Changes in Financial Position

As of June 30, 2002, total deposits increased $4,704,517 from December 31, 2001 and net loans outstanding increased
$7,218,192. The increase in loans was primarily due to an increase in real estate construction loans. Total deposits as of June 30, 2002 were $133,448,485, an increase of 4.3% from $127,953,779 as of June 30, 2001. Total loans as of June 30, 2002
were $94,360,335, an increase of 16.5% from $81,007,928 as of June 30, 2001.

The following table sets forth the amount of deposits by each category and the percent of total deposits at
the dates specified.

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Deposit Comparative($000.00 Omitted)

|                                 | 6-30-02 | %   | 12-31-01 | %   | 6-30-01 | %  
|-------------------------------- | ------- | --- | -------- | --- | ------- | ---
|                                
|Demand                           | $45,508 | 34% | $38,484  | 34% | $36,017 | 28%
|                                 |         |     |          |     |         |    
|Savings                          | 3,233   | 2%  | 2,566    | 2%  | 3,148   | 2% 
|                                 |         |     |          |     |         |    
|Interest bearing Trans. Deposits | 38,669  | 29% | 48,553   | 33% | 51,943  | 41%
|                                 |         |     |          |     |         |    
|Other time                       | 46,038  | 35% | 39,140   | 31% | 36,846  | 29%

The following table sets forth the amount of loans outstanding by each category and the percent of total
loans outstanding at the dates specified.

Loan Comparative($000.00 Omitted)

|                  | 6-30-02 | %   | 12-31-01 | %   | 6-30-01 | %  
|----------------- | ------- | --- | -------- | --- | ------- | ---
|                 
|Commercial        | $29,499 | 31% | $23,475  | 26% | $30,997 | 38%
|Real estate-const | 24,881  | 26% | 27,389   | 31% | 20,918  | 26%
|Real estate-other | 35,399  | 37% | 30,829   | 35% | 21,834  | 27%
|Installment/other | 6,136   | 6%  | 6,956    | 8%  | 7,259   | 9% 

Non-Performing Assets

The
following table provides information with respect to the subsidiary Banks past due loans and components for non- performing assets at the dates indicated. Included in the following figures for June 30, 2002 is a $1,894,000 loan that
subsequently paid off on July 19, 2002.

|                                                | Non-Performing Assets($000.00 Omitted)
|----------------------------------------------- | --------------------------------------
|                                               
|                                                | 6-30-02                               
|                                               
|Loans 90 days or more past due & still accruing | $       2,182                         
|Non-accrual loans                               | 0                                     
|Other real estate owned                         | 0                                     
|                                                |                                       
|Total non-performing assets                     | $       2,182                         
|                                                |                                       




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|Non-performing assets to period end loans plus other real estate owned | 2.27 | % | .17   | % | .90 | %
|---------------------------------------------------------------------- | ---- | - | ----- | - | --- | -
|                                                                      
|Allowance to non-performing loans                                      | 71   | % | 1,039 | % | 218 | %

The subsidiary Banks policy is to recognize interest income on an accrual basis unless the full
collectibility of principal and interest is uncertain. Loans that are delinquent 90 days as to principal or interest are placed on a non-accrual basis, unless they are well secured and in the process of collection, and any interest earned but
uncollected is reversed from income. Collectibility is determined by considering the borrowers financial condition, cash flow, quality of management, the existence of collateral or guarantees and the state of the local economy.

Other real estate owned (OREO) is comprised of properties acquired through foreclosure. These properties are carried at the lower of the recorded loan balance or their estimated fair market value
based on appraisal, less estimated disposal costs. When the loan balance plus accrued interest exceeds the fair value of the property, the difference is charged to the allowance for loan losses at the time of foreclosure. Subsequent declines in
value from the recorded amount, if any, and gains or losses upon disposition are included in noninterest expense. Operating expenses related to other real estate owned are charged to non-interest expense in the period incurred.Capital Position As of June 30, 2002, Shareholders Equity was $18,654,000. This represents an increase of $917,000 or 5.2% over the same period last year. Since the inception of the repurchase program in 1989, the Company has
authorized the repurchase of $3,500,000 of its stock. As of June 30, 2002, the Company has repurchased a total of 668,680 shares of the Company stock constituting 31.1% of the Companys original stock prior to the repurchase program, at a total
cost of $2,668,000, or an average price per share of $3.99. The Company plans to continue its repurchase program as an additional avenue for liquidity for its shareholders. The program has not significantly affected the Companys liquidity or
capital position or its ability to operate. In addition, the Companys subsidiary Bank remains more than well-capitalized under current regulations.

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The following table shows the risk-based capital and leverage ratios as well as the minimum regulatory requirements for the same as of June 30, 2002:

|               | Capital Ratio | MinimumRegulatory Requirement
|-------------- | ------------- | -----------------------------
|              
|Tier 1 Capital | 15.99%        | 4.00%                        
|Total Capital  | 17.16%        | 8.00%                        
|Leverage Ratio | 12.65%        | 4.00%                        

RESULTS OF OPERATIONSNet Interest Income Total interest income
including loan fees decreased to $4,769,000 for the first six months of 2002 from $5,889,000 for the same period in 2001. Total interest income on loans and fees decreased to $3,912,000 for the first six months of 2002 from $4,312,000 for
the same period last year. Although average loans outstanding during the first six months of 2002 increased $10,260,000 over the same period last year, the average prime lending rate decreased from an average of 8.40% in the first six months of 2001
to an average rate of 4.75% for the first six months of 2002, or a decrease of 365 basis points. Due to this factor, the yield on loans and fees decreased 114 basis points over the same period last year. The yield on investments decreased 197 basis
points over the same period last year. This decrease was brought about by a decrease in yields in the marketplace due to the change in the prime-lending rate. Average outstanding investments decreased $2,462,000 for the period brought about by an
increase in total loans. Interest expense decreased from $1,604,000 at the end of the first six months of 2001 to $1,270,000 for the same period in 2002. Although average interest-bearing deposit accounts increased $3,763,000 during the
first six months of 2002 versus the same period last year the average cost of funds decreased 86 basis points. This was brought about by changes in the marketplace brought influenced by the decrease in the prime lending rate. As a result of
these factors, net interest margin for the first six months of 2002 was 4.77% compared to 6.21% for the same period last year. For the second quarter, total interest income including loan fees decreased from $2,761,000 in 2001 to $2,520,000
for the same period in 2002. This decrease is due to the decrease in the average prime rate, which for the second quarter 2001 was

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7.74% versus the average of 4.75% for the same period in 2002. Offsetting this decrease was an increase in average loans outstanding of $13,276,000 for the second quarter of
2002 versus the same period in 2001. Average outstanding investments decreased $2,353,000 during the second quarter of 2002 versus the same period last year, primarily due to the increase in loans. For the second quarter of 2002, interest
expense increased $29,000 compared to the same period in 2001. Average outstanding interest bearing deposits increased from $84,897,000 in 2001 to $93,504,000 in 2002. Average cost of funds for the same period was 2.59% compared to 4.04% in 2001. As
a result, net interest income for the second quarter of 2002 decreased $270,000, or 13.4% compared to the same period in 2001.Other Operating Income Service charges on deposit accounts as of the end of the first six months of
2002 decreased to $117,000 versus $118,000 for the same period in 2001. This was primarily related to a decrease in service charges collected on returned checks. Other customer fees and charges as of the end of the first six months of 2002
increased to $101,000 versus $57,000 for the same period in 2001. This was primarily related to an increase in service charge related to early withdrawal of time certificates of deposits Service charges on deposit accounts as of the end of
the second quarter of 2002 decreased to $54,000 versus $63,000 for the same period in 2001. This was primarily related to a decrease in service charges collected on returned checks and a decrease in analysis charges. Other customer fees and
charges increased $6,000 for the second quarter. This was primarily related to an increase in other miscellaneous income.Loan Loss Provision The allowance for loan losses is maintained at a level that management of the
Company considers to be adequate for losses that inherent in the current loan portfolio. The allowance is increased by charges to operating expenses and reduced by net-charge-offs. The level of the allowance for loan losses is based on
managements evaluation of losses in the loan portfolio, as well as prevailing economic conditions. Management employs a systematic methodology on a monthly basis to determine the adequacy of the allowance for current

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and future loan losses. The credit administrator grades each loan at the time of extension or renewal. Gradings are assigned a risk factor, which is calculated to assess the
adequacy of the allowance for loan losses. Further, management considers other factors such as overall portfolio quality, trends in the level of delinquent and classified loans, specific problem loans, and current and anticipated economic
conditions. The following table summarizes the allocation of the allowance for loan losses by loan type for the years indicated and the percent of loans in each category to total loan dollar amounts in thousands:

|             |        
|------------ | -------
|             | 6-30-02
|             |        
|             | Amount 
|             |        
|             |        
|Commercial   | $      
|Construction |        
|Real Estate  |        
|Consumer     |        
|Unallocated  |        
|             | $      

The following table summarizes the activity in the Banks allowance for loan losses for the six months
ended June 30, 2002 and 2001.

|                                 | Six months ended 
|-------------------------------- | -----------------
|                                 |                  
|                                 | ($000.00 Omitted)
|                                 | 6-30-02          
|                                 |                  
|Balance, beginning of the period | $                
|Provision for loan losses        |                  
|Recoveries                       |                  
|Loans charged-off                |                  
|                                 |                  
|Balance, end of the period       | $                

The balance in the allowance for loan losses at June 30, 2002 was 1.62% of total loans compared to 1.98% of total loans at June 30,
2001. This level is considered appropriate and is slightly greater than the industry average.Other Operating Expenses Total other operating expenses increased $94,000 as of the end of the first six months of 2002 compared to
the same period last year. This increase was primarily due to an

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increase in salaries of $106,000 primarily centered in incentive accruals and an increase in staff over the same period last year. In addition, equipment expense
increased $52,000 primarily related to the purchase of a new computer system, however, this was partially offset by an occupancy expense decrease of $45,000 centered in a reduction of leasehold expense. Other expenses also decreased $19,000 centered
in business development expenses.

Total other operating expenses increased $20,000 as of the end of the second quarter of 2002. This increase was primarily due to an increase in
salaries of $11,000 primarily centered in incentive accruals and an increase in equipment expense related to the purchase of a new computer system.

Provision for Income
Taxes

The Companys provision for income taxes as of the end of the first six months of 2002 decreased from $858,000 in 2001 to $539,000. For the same period, the
Companys total effective tax rate was 40.1% compared to 41.8% in 2001.

Net Income

Net income for the first
six months of 2002 decreased to $779,000 from $1,196,000 for the same period in 2001, or a decrease of 34.9%.

ITEM   3.     Quantitative and Qualitative Disclosures About Market Risk



Interest rate and credit risks are the most significant market risks impacting the Companys performance. Other types of market risk, such as foreign currency exchanges rate risk and the commodity price risk, do
not arise in the normal course of the Companys business activities. The Company relies on loan reviews, prudent loan underwriting standards and an adequate allowance for loan losses to mitigate credit risk.

Interest rate risk is managed by subjecting the Companys balance sheet to hypothetical interest rate shocks. The Companys primary objective in managing interest rate risk is to minimize the adverse impact
of changes in interest rates on the Companys net interest income and capital, while structuring the Companys asset/liability position to obtain the maximum yield-cost spread on that structure.

Rate shock is an instantaneous and complete adjustment in market rates of various magnitudes on static or level balance sheet to determine the effect such a change in rates would

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have on the Companys net interest income for the succeeding twelve months, and the fair values of financial instruments.

Management has assessed these risks and believes that there has been no material change since December 31, 2001.

CERTAIN FACTORS THAT MAY AFFECT
FUTURE RESULTS The primary factor, which may affect future results, is the fluctuation of interest rates in the market place more commonly referred to as interest rate risk. Interest rate risk is the exposure of a banks current and
future earnings and equity capital arising from adverse movements in interest rates. It results from the possibility that changes in interest rates may have an adverse effect on a banks earnings and its underlying economic value. Changes in
interest rates affect a banks earnings by changing its net interest income and the level of other interest-sensitive income and operating expenses. As mentioned previously, the potential decrease in a declining interest rate environment would
be minimized by an increase in assets. In addition, earnings and growth of the company are and will be affected by general economic conditions, both domestic and international, and by monetary and fiscal policies of the United States Government,
particularly the Federal Reserve Bank.

PART  II  -  OTHER INFORMATION

|ITEM 1 - LEGAL PROCEEDINGS                                  
|------------------------------------------------------------
|                                                            
|                                                            
|ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS          
|                                                            
|                                                            
|ITEM 3 - DEFAULTS UPON SENIOR SECURITIES                    
|                                                            
|                                                            
|ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|                                                            

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|                                          |    | approved. The second and final proposal was the approved of Vavrinek, Trine Day and Co., LLP as the public accounting firm to perform the Companys audit for the year 2002. This proposal
was also approved. There was no further business to come before the shareholders.
|----------------------------------------- | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                         
|ITEM 5 - OTHER INFORMATION               
|                                          |    | None                                                                                                                                                                                                                                                                        
|                                         
|ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
|                                          |    |                                                                                                                                                                                                                                                                             
|                                          | A) | Exhibits:                                                                                                                                                                                                                                                                   
|                                          |    |                                                                                                                                                                                                                                                                             
|                                          |    | 99.1 - Certification of CEO pursuant to Section 906 of Sarbanes-Oxley Act of 2002                                                                                                                                                                                           
|                                          |    |                                                                                                                                                                                                                                                                             
|                                          |    | 99.2 - Certification of CFO pursuant to Section 906 of Sarbanes-Oxley Act of 2002                                                                                                                                                                                           
|                                          |    |                                                                                                                                                                                                                                                                             
|                                          | B) | Reports on Form 8-K                                                                                                                                                                                                                                                         
|                                          |    |                                                                                                                                                                                                                                                                             
|                                          |    | None                                                                                                                                                                                                                                                                        

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

| |                      | SUMMIT BANCSHARES, INC. Registrant                                                                        
| | -------------------- | ----------------------------------------------------------------------------------------------------------
|
|
| | DATE:August 9, 2002  | By:/s/  Shirley W. NelsonShirley W. Nelson         Chairman and CEO         (Principal Executive Officer) 
|
| | DATE: August 9, 2002 | By:/s/  Kikuo
NakaharaKikuo Nakahara
        Chief Financial Officer         (Principal Financial Officer)
|
| |                     

20