<PAGE>1

                        SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C.   20549

                                     FORM 10-Q


                    QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF

                          THE SECURITIES EXCHANGE ACT OF 1934

                   FOR QUARTER ENDED:           SEPTEMBER 30, 1996

                            COMMISSION FILE NUMBER:  0-11108


                                 SUMMIT BANCSHARES, INC.

                     STATE OF CALIFORNIA    I.R.S. IDENTIFICATION
                                              NUMBER 94-2767067

                        2969 BROADWAY, OAKLAND CALIFORNIA   94611

                                    (510)  839-8800

         Indicate by the 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
                                ----------      ----------

         The number of shares outstanding of the registrant's common stock

         was:

                     424,659 shares of no par value common stock
                         issued as of September 30, 1996



<PAGE>2

                             PART I - FINANCIAL INFORMATION
                             ---- -   --------- -----------

ITEM 1                                                                      PAGE

  SUMMIT BANCSHARES, INC. AND SUBSIDIARY FINANCIAL STATEMENTS
  ------ ----------- ---- --- ---------- --------- ----------

         Consolidated Balance Sheets ..................................... 2

         Consolidated Statements of Income ............................... 3-4

         Consolidated Statements of Changes in

            Shareholders' Equity ......................................... 5

         Consolidated Statement of Cash Flows ............................ 6-7

         Notes to Financial Statements.................................... 8

         Interest Rate Risk Reporting Schedule............................ 9

ITEM 2

         Management's Discussion and Analysis of Financial

           Condition and Results of Operations ........................... 10-16


                              PART II - OTHER INFORMATION
                              ---- --   ----- -----------

ITEMS 1-6 ................................................................ 17

                                       1
<PAGE>3
                            PART I - FINANCIAL INFORMATION
                            ---- -   --------- -----------

                                        ITEM 1.
                                        ---- --
<TABLE>
<CAPTION>
                         SUMMIT BANCSHARES, INC. AND SUBSIDIARY
                         ------ ----------- ---- --- ----------
                               CONSOLIDATED BALANCE SHEETS
                               ------------ ------- ------
                        SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                        --------- --- ---- --- -------- --- ----
                                      (Unaudited)
                                              (Stated in Thousands)
ASSETS                                       9-30-96       12-31-95
------                                       -------       --------
<S>                                          <C>           <C>   
Cash and Due from Banks                      $ 4,976       $ 6,828
Federal Funds Sold                            13,622         9,600
                                              ------        ------
  Cash and Cash Equivalents                   18,598        16,428
Interest-bearing Deposits with
  Other Financial Institutions                 9,608        11,002
Investment Securities (Held-to-                9,705         6,018
  Maturity) Market Value of $9,790
  at September 30, 1996 and $6,090
  at December 31, 1995)
Loans                                         50,725        50,670
  Less:  Allowance for loan losses            (1,090)       (1,025)
                                              ------        ------
Net Loans                                     49,635        49,645
Premises and Equipment, net                      866           872
Other Real Estate Owned                        1,283         1,303
Interest Receivable and Other
  Assets                                       1,644         1,555
                                              ------        ------
TOTAL ASSETS                                 $91,339       $86,822
                                              ======        ======
LIABILITIES AND SHAREHOLDERS' EQUITY
----------- --- ------------- ------

Deposits:
  Demand                                     $23,686       $27,573
  Savings                                      2,951         2,365
  Interest-bearing Transaction
    Accounts                                  31,492        26,394
  Other Time                                  20,755        18,919
                                              ------        ------
Total Deposits                                78,884        75,251
Interest Payable and Other
  Liabilities                                    671           469
                                              ------        ------
TOTAL LIABILITIES                             79,555        75,720
                                              ------        ------
SHAREHOLDERS' EQUITY:
Preferred Stock, no par value:
  2,000,000 shares authorized, no
  shares outstanding                             ---           ---
Common Stock, no par value;
  3,000,000 shares authorized;
  424,259 shares issued and
  outstanding at December 31, 1995
  and 424,659 at September 30, 1996            3,751         3,767
Retained Earnings                              8,033         7,335
                                              ------        ------
TOTAL SHAREHOLDERS' EQUITY                    11,784        11,102
                                              ------        ------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                       $91,339       $86,822
                                              ======        ======
</TABLE>
                                        2
<PAGE>4
<TABLE>
<CAPTION>
                       SUMMIT BANCSHARES, INC. AND SUBSIDIARY
                       ------ ----------- ---- --- ----------
                      CONSOLIDATED STATEMENTS OF INCOME FOR THE
                      ------------ ---------- -- ------ --- ---
                THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                ----- --- ---- ------ ----- --------- --- ---- --- ----
                                     (unaudited)

                                  THREE       THREE        NINE        NINE
                                  MONTHS      MONTHS       MONTHS      MONTHS
                                  ENDED       ENDED        ENDED       ENDED
                                 9-30-96     9-30-95      9-30-96     9-30-95
                                 -------     -------      -------     -------
<S>                             <C>         <C>          <C>         <C>
Interest Income:

  Interest and Fees on Loans    $1,531,120  $1,402,669   $4,224,082  $4,115,584 
  Interest on Investment Sec.      150,017     135,385      371,134     438,115
  Interest on Federal Funds Sold   183,117     128,936      433,235     274,402
  Interest on Time Deposits with
    Other Financial Institutions   127,726     142,783      427,059     341,316 
                                 ---------   ---------    ---------   ---------
TOTAL INTEREST INCOME            1,991,980   1,809,773    5,455,510   5,169,417

Interest Expense:
  Interest on Deposits             594,670     427,859    1,428,693   1,108,663 
                                 ---------   ---------    ---------   ---------

TOTAL INTEREST EXPENSE             594,670     427,859    1,428,693   1,108,663 
                                 ---------   ---------    ---------   ---------
NET INTEREST INCOME              1,397,310   1,381,914    4,026,817   4,060,754

Provision for Loan Losses           50,000     125,000      165,000     415,000 
                                 ---------   ---------    ---------   ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES        1,347,310   1,256,914    3,861,817   3,645,754 
                                 ---------   ---------    ---------   ---------
Other Operating Income:
  Service Charges on Deposit
     Accts.                         80,881      90,878      241,673     282,867
  Other                             58,678      42,602      161,311     127,780 
                                 ---------   ---------    ---------   ---------
TOTAL OTHER OPERATING INCOME       139,559     133,480      402,984     410,647
                                 ---------   ---------    ---------   ---------
Other Operating Expenses:

  Salaries and Employee Benefits   497,835     471,531    1,416,317   1,344,201
  Occupancy Expense                 92,057      92,918      274,572     273,999
  Furniture and Equipment Expense   24,491      23,120       63,458      72,632
  Other                            266,632     253,161      752,156     868,482 
                                 ---------   ---------    ---------   ---------

TOTAL OTHER OPERATING EXPENSE      881,015     840,730    2,506,503   2,559,314 
                                 ---------   ---------    ---------   ---------

INCOME BEFORE INCOME TAXES         605,854     549,664    1,758,298   1,497,087

Provision for Income Taxes        (257,724)   (233,422)    (740,747)   (615,282) 
                                 ---------   ---------    ---------   ---------

NET INCOME                       $ 348,130   $ 316,242   $1,017,551   $ 881,805
                                 =========    =========   =========   =========
</TABLE>
                                          3
<PAGE>5
<TABLE>
<CAPTION>
                                     THREE       THREE      NINE        NINE
                                     MONTHS      MONTHS     MONTHS      MONTHS
                                     ENDED       ENDED      ENDED       ENDED

                                    9-30-96     9-30-95     9-30-96     9-30-95
                                    -------     -------     -------     -------

<S>                                <C>         <C>        <C>          <C>   
NET INCOME APPLICABLE TO
  COMMON STOCK                     $348,130    $316,242   $1,017,551   $881,805
                                   ========    ========   ==========   ========

PRIMARY EARNINGS:

  Weighted Average Shares
   Outstanding:                     464,313     456,224     456,780     457,038

PRIMARY EARNINGS PER SHARE             $.75        $.69       $2.23       $1.93
                                    =======     =======     =======     =======
</TABLE>
                                         4
<PAGE>6
<TABLE>
<CAPTION>
                       SUMMIT BANCSHARES, INC. AND SUBSIDIARY
                       ------ ----------- ---- --- ----------
              CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
              ------------ ---------- -- ------- -- ------------- ------
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                 --- --- ---- ------ ----- --------- --- ---- --- ----
                                     (Unaudited)

                                        NUMBER
                                       OF SHARES      COMMON        RETAINED
                                      OUTSTANDING     STOCK         EARNINGS
                                      -----------     ------        --------

<S>                                     <C>         <C>            <C>    
BALANCE AT DECEMBER 31, 1995            424,259     $3,767,258     $7,335,003

Repurchase of Common Stock               (1,250)       (36,437)           ---

Exercise of Stock Options                 1,650         20,246            ---

Payment of $.75 Cash Dividend
  for Holders of Record as of
  May 13, 1996 and Payable on
  June 7, 1996                              ---            ---       (319,431)

Net Income for the Nine Months
 ended September 30, 1996                   ---            ---      1,017,551
                                        -------      ---------      ---------

BALANCE AT SEPTEMBER 30, 1996           424,659     $3,751,067     $8,033,123
                                        =======     ==========     ==========

BALANCE AT DECEMBER 31, 1994            427,485     $3,837,684     $6,656,072

Purchase of Common Stock                 (3,226)       (70,246)           ---

Payment of $.25 Cash Dividend
  for Holders of Record as of
  May 12, 1995 and Payable on
  June 9, 1995                              ---            ---       (106,252)

Net Income for the Nine Months
 ended September 30, 1995                   ---            ---        881,805
                                        -------     ----------     ----------

BALANCE AT SEPTEMBER 30, 1995           424,259     $3,767,438     $7,431,625
                                        =======      =========      =========
</TABLE>
                                        5
<PAGE>7
<TABLE>
<CAPTION>
                        SUMMIT BANCSHARES, INC. AND SUBSIDIARY
                                 STATEMENT OF CASH FLOWS
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                      (Unaudited)
--------------------------------------------------------------------------------
             

<S>                                                      <C>        <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
      Interest received                                             $ 5,103,346
      Fees received                                                     744,102
      Interest paid                                                  (1,469,030)
      Cash paid to suppliers and employees                           (2,199,614)
      Income taxes paid                                                (687,000)
                                                                     ----------
         Net cash provided by operating activities                    1,491,804
                                                                     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Decrease in time deposits with other
         financial institutions                                       1,394,000
      Maturity of investment securities                               3,540,012
      Purchase of investment securities                              (7,227,004)
      Net decrease in loans made to customers                          (319,983)
      Recoveries on loans previously charged off                          2,750 
      Capital expenditures                                              (97,605)
                                                                     ----------
         Net cash used in investing activities                       (2,707,830)
                                                                     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Net decrease in demand, MRA, NOW,
         and savings accounts                                         1,796,800 
      Net increase in time deposits                                   1,836,674
      Increase in other miscellaneous assets                            109,026
      Purchase of common stock                                          (36,438)
      Dividends paid                                                   (319,432)
                                                                     ----------
         Net cash provided by financing activities                    3,386,630 
                                                                     ----------
Net increase in cash and cash equivalents                             2,170,604
Cash and cash equivalents at 12-31-95                                16,427,803
                                                                     ----------
Cash and cash equivalents at 9-30-96                                $18,598,407
                                                                    ===========

Reconciliation of net income to net cash provided by operating activities:

Net Income                                                          $ 1,017,551

Adjustments to reconcile net income to cash provided
 by operating activities:
         Depreciation                                    103,285
         Provision for loan losses                       165,000
         Decrease in accrued interest receivable           5,701
         Decrease in unearned loan fees                  (16,747)
         Decrease in accrued interest payable            (40,337)
         Decrease in prepaid expenses                     53,531
         Increase in accounts payable                    150,073
         Increase in income tax payable                   53,747
                                                         -------
           Total adjustments                                            474,253
                                                                     ----------
Net cash provided by operating activities                            $1,491,804
                                                                      =========
</TABLE>
                                        6
<PAGE>8
<TABLE>
<CAPTION>
                        SUMMIT BANCSHARES, INC. AND SUBSIDIARY
                                 STATEMENT OF CASH FLOWS
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
                                      (Unaudited)
--------------------------------------------------------------------------------
<S>                                                     <C>         <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
      Interest received                                             $ 4,741,684
      Fees received                                                     799,792
      Interest paid                                                    (991,961)
      Cash paid to suppliers and employees                           (2,349,817)
      Income taxes paid                                                (791,654)
                                                                     ----------
         Net cash provided by operating activities                    1,408,044
                                                                     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Increase in time deposits with other
         financial institutions                                      (3,071,000)
      Maturity of investment securities                               6,476,325
      Purchase of investment securities                              (4,081,780)
      Net decrease in loans made to customers                        (1,483,221)
      Recoveries on loans previously charged off                         10,639 
      Capital expenditures                                             (123,197)
                                                                     ----------
         Net cash used in investing activities                       (2,272,234)
                                                                     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Net decrease in demand, MRA, NOW,
         and savings accounts                                           (83,851)
      Net increase in time deposits                                   5,248,906
      Decrease in other miscellaneous assets                          1,738,464
      Purchase of common stock                                          (70,426)
      Dividends paid                                                   (106,252)
                                                                     ----------
         Net cash provided by financing activities                    6,726,841
                                                                     ----------
Net increase in cash and cash equivalents                             5,862,651
Cash and cash equivalents at 12-31-94                                 9,246,342
                                                                     ----------
Cash and cash equivalents at 6-30-95                                $15,108,993
                                                                    ===========

Reconciliation of net income to net cash provided by operating activities:

Net Income                                                             $881,805

Adjustments to reconcile net income to cash provided
 by operating activities:
         Depreciation                                    107,961
         Provision for loan losses                       415,000
         Increase in accrued interest receivable         (61,041)
         Increase in unearned loan fees                   22,453
         Increase in accrued interest payable            116,702
         Increase in prepaid expenses                    (24,693)
         Increase in accounts payable                    126,229
         Decrease in income tax payable                 (176,372)
                                                        ---------
           Total adjustments                                            526,239
                                                                     ----------
Net cash provided by operating activities                            $1,408,044
                                                                     ==========
</TABLE>
                                       7
<PAGE>9

NOTES TO 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
          financial position at September 30, 1996 and the results of operations
          for the nine months ended  September  30, 1996 and 1995 and cash flows
          for the nine months ended September 30, 1996 and 1995.

          Certain  information  and  footnote   disclosures   presented  in  the
          Corporation'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 Corporation's 1995 Annual
          Report to  Shareholders,  which is  incorporated  by  reference in the
          Company's  1995 annual report on Form 10-K.  The results of operations
          for the nine  months  ended  September  30,  1996 are not  necessarily
          indicative of the operating results for the full year.

      2.  SIGNIFICANT ACCOUNTING POLICIES
          ----------- ---------- --------
          Net income per common and common  equivalent  share is computed  using
          the weighted  average number of shares  outstanding  during the period
          and the dilutive effect of stock options.
                                        8

<PAGE>10

INTEREST RATE SENSITIVITY/INTEREST RATE RISK ANALYSIS

     The following table provides an interest rate sensitivity and interest rate
risk analysis for the quarter ended  September 30, 1996. The table presents each
major category of interest-earning assets and interest-bearing liabilities.

<TABLE>
<CAPTION>
                                                   INTEREST RATE RISK REPORTING SCHEDULE

REPORTING INSTITUTION:  SUMMIT BANK                                                   REPORTING DATE:    9/30/96

                                                      REMAINING TIME BEFORE MATURITY OR INTEREST RATE ADJUSTMENT
<S>                                     <C>        <C>      <C>       <C>        <C>       <C>       <C>
                                        ($000.00)
                                         OMITTED        UP       > 3       > 1       > 3      > 5       OVER
                                           TOTAL         3       < 1       < 3       < 5      < 10      10 YRS
  I.    EARNING ASSETS
        ------- ------

         A.  INVESTMENTS:
             -----------
          1.   U. S. TREASURIES          $ 9,705   $ 4,991   $   473    $4,241        $0        $0        $0
          2.   FED FUNDS                  13,622    13,622         0         0         0         0         0
          3.   PURCHASED CDS               9,608     2,379     4,654     2,575         0         0         0
                                          ------    ------     -----     -----         -         -         -
                  TOTAL INVESTMENTS      $32,935   $20,992   $ 5,127    $6,816        $0        $0        $0

         B.  LOANS:
             -----
          1.   COMMERCIAL LOANS          $46,928   $43,636   $ 1,418    $  774      $632      $468        $0
          2.   REAL ESTATE LOANS           1,549     1,549         0         0         0         0         0
          3.   INSTALLMENT                    16        16         0         0         0         0         0
                                          ------    ------     -----    ------       ---       ---       ---
                  TOTAL LOANS            $48,493   $45,201   $ 1,418    $  774      $632      $468        $0

         C.  TOTAL EARNING ASSETS        $81,428   $66,193   $ 6,545    $7,590      $632      $468        $0
             ----- ------- ------

  II.   COST OF FUNDS (DEPOSITS)
        ---- -- ----- ----------
         A.  CERTIFICATES OF DEPOSITS    $21,446   $12,251   $ 9,035   $   133    $    0       $27        $0
         B.  MONEY MARKET ACCOUNTS        24,464         0    12,232    12,232         0         0         0
         C.  TRANSACTIONS ACCOUNTS         7,885         0         0     3,943     1,971     1,971         0
         D.  SAVINGS ACCOUNTS              2,153         0         0     1,077       538       538         0
                                           -----    ------    ------    ------     -----     -----         -

            TOTAL COST OF FUNDS          $55,948   $12,251   $21,267   $17,385    $2,509    $2,536        $0

  III. INTEREST SENSITIVE ASSETS         $81,429   $66,193   $ 6,546   $ 7,590    $  632    $  468        $0
 
  IV.  INTEREST SENSITIVE LIABILITIES    $55,948   $12,250   $21,267   $17,385    $2,510    $2,536        $0
                                         -------   -------   -------   -------    ------    ------         -
  V.   GAP                               $25,481   $53,943  $(14,721) $( 9,795)  $(1,878)  $(2,068)       $0

  VI.  CUMULATIVE GAP                    $25,481   $53,943   $39,222   $29,427   $27,549    $25,481  $25,481

  VII. GAP RATIO                             1.46     5.40      0.31      0.44      0.25       0.18

  VIII.CUMULATIVE RATIO                      1.45     5.40      2.17      1.58      1.52       1.46     1.46

  IX.  GAP AS % OF TOTAL ASSETS             28.69    60.73    (16.57)   (11.03)    (2.11)     (2.33)

  X.   CUMULATIVE GAP AS A % OF
           TOTAL ASSETS                     28.69    60.73     44.16     33.13     31.01      28.69    28.69
</TABLE>
                                                     9
<PAGE>11

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
------------  ----------  ---  -------- --  ---------  ---------  --- ------- --
               OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
               ---------- --- --- ---- ------ ----- --------- --- ----

The  registrant  is a bank holding  company whose only  operating  subsidiary is
Summit Bank. The following discussion primarily concerns the financial condition
and results of operations of the Holding  Company  ("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 September 30, 1996 was 64.3% which was
a decrease from 67.3% for the same period in 1995.  The average  loan-to-deposit
ratio for the third  quarter  of 1996 was  62.5%,  down from  66.1% for the same
period last year. Although the average  loan-to-deposit  ratio is down from last
year,  average total deposits for the year through  September 30, 1996 increased
$4,864,000  in  1996  versus  1995.  The  higher  cost  public   deposit,   time
certificates and market rate accounts increased $2,826,000,  while interest free
demand  deposit  accounts  increased   $2,038,000.   Average  outstanding  loans
increased  $1,362,000 due to increased loan  participations by the Bank with the
holding  company.  Management  continues  to seek  the  acquisition  of  quality
credits.

Net liquid assets,  which consists  primarily of cash, due from banks,
interest-bearing   deposits  with  other  financial  institutions,   short  term
securities  and federal  funds sold totaled  $37,911,000  on September 30, 1996.
This amount  represented  48.1% of total deposits in comparison to the liquidity
ratio of 45.4% as of September  30, 1995.  This increase is primarily the result
of an increase in total deposits and a decrease in the company's loan to deposit
ratio. It is management's belief that the current liquidity level is appropriate
given current economic uncertainties and is sufficient to meet current needs.

The  issuer  is not  aware  of any  current  recommendations  by the  regulatory
authorities which, if they were implemented, would have a material effect on the
Company.

                                        10
<PAGE>12

The  following  table sets forth book value of  investments  by category and the
percent of total investments at the dates specified.
<TABLE>
<CAPTION>
                                      Investment Comparative
                                      ----------------------
                                        (000.00 Omitted)
                          9-30-96   %     12-31-95   %      9-30-95   % 
                          -------   -     --------   -      -------   -

<S>                       <C>      <C>     <C>      <C>     <C>      <C>
Fed Funds Sold            $13,622  41%     $ 9,600  36%     $ 8,300  32%
Interest bearing
 Deposits                   9,608  29%      11,002  41%      10,110  38%
Securities                  9,705  30%       6,018  23%       7,930  30%
                           ------ ---       ------ ---       ------ ---
                          $32,935 100%     $26,620 100%     $26,340 100%
                          ======= ===      ======= ===      ======= ===
</TABLE>

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 September 30, 1996 were  comprised of $9,705,000 in U.S. gov't and
agency  instruments  maturing  between  3  months  and 2  years.  Securities  on
September  30,  1995 were  comprised  of  $7,570,000  in U.S.  gov't and  agency
instruments  maturing  between  3  months  and 3  years,  and  $360,000  in bank
qualified  1 year Tax  Anticipation  Revenue  Notes used to fund  annual  school
district budgets. 

Changes in Financial Position
------- -- --------- --------

As of September 30, 1996, deposits increased $3,633,000 from year end 1995 while
at the same time loans  outstanding  increased  $55,000.  Total  deposits  as of
September 30, 1996 were  $78,884,000, an increase of 8% from  $73,024,000  as of
September  30, 1995.  Total loans as of September 30, 1996 were  $50,725,000, an
increase of 3% from $49,113,000 as of September 30, 1995.

The  following  table sets forth the amount of deposits by each category and the
percent of total deposits at the dates specified. 
<TABLE>
<CAPTION>
                                              Deposit Comparative
                                              ------- -----------
                                               (000.00 Omitted)
                                 9-30-96   %     12-31-95   %      9-30-95   % 
                                 -------   -     --------   -      -------   -

<S>                              <C>      <C>     <C>      <C>     <C>      <C>
Demand                           $23,686  30%     $27,573  37%     $22,306  31%
Savings                            2,951   4%       2,365   3%       2,533   3%
Interest bearing
 transactions accts               31,492  40%      26,394  35%      29,467  40%
Other Time                        20,755  26%      18,919  25%      18,718  26%
                                  ------ ---       ------ ---       ------ ---
                                 $78,884 100%     $75,251 100%     $73,024 100%
                                 ======= ===      ======= ===      ======= ===
</TABLE>
                                         11
<PAGE>13

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

<TABLE>
<CAPTION>
                                                Loan Comparative
                                                ---- -----------
                                               (000.00 Omitted)
                                 9-30-96   %     12-31-95   %      9-30-95   % 
                                 -------   -     --------   -      -------   -

<S>                              <C>      <C>     <C>      <C>     <C>      <C>
Commercial                       $33,194  65%     $30,472  60%     $32,114  65%
Real estate-const.                 6,987  14%       8,432  17%       7,192  15%
Real estate-other                  4,779   9%       6,193  12%       4,745   9%
Installment/Other                  5,765  12%       5,573  11%       5,062  11%
                                 ------- ---      ------- ---      ------- ---
                                 $50,725 100%     $50,670 100%     $49,113 100%
                                 ======= ===      ======= ===      ======= ===
</TABLE>

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.

<TABLE>
<CAPTION>
                                                  Non-Performing Assets
                                                  ---------------------
                                                     (000.00 Omitted)
                                             9-30-96     12-31-95     9-30-95
                                             -------     --------     -------

<S>                                           <C>          <C>         <C>
Loans 90 days or more past
 due & still accruing                         $   18       $  367      $  392
Non-accrual loans                                  0           39         694
Other real estate owned                        1,283        1,303       1,303
                                               -----        -----       -----
   Total non-performing assets                $1,301       $1,709      $2,389
                                              ======        =====       =====

Non-performing assets to
  period end loans plus
  other real estate owned                       2.50%        3.28%       4.74%

Allowance to non-performing
  loans                                         6056%        252%        117%

Allowance to non-performing
  assets                                          84%          60%         53%
</TABLE>

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.

                                        12

<PAGE>14

Other real estate owned 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.  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 acquisition.  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  noninterest  expense  in the period
incurred.

The decrease in  non-performing  assets from 9-30-95 to 9-30-96 is due primarily
to a decrease of $694,000 in non-accrual  loans.  Loans 90 days or more past due
and still accruing also decreased $374,000 from previous year.

The amount in other real estate owned  represents a parcel of improved  land and
two parcels of partially  improved  land. The Bank is actively  marketing  these
parcels and an  additional $10,000 write-down was  taken in the month of October
to reflect market conditions on one of these properties.

Capital Position
------- --------

As of September 30, 1996, Shareholders' Equity was $11,784,000.  This represents
an increase  of  $585,000,  or 5.2% over the same  period  last year.  Since the
inception of the stock  repurchase  program in 1989,  the Company has authorized
the repurchase of $2,100,000 of its stock. As of September 30, 1996, the Company
has  repurchased a total of 151,538 shares of the Company's  stock  constituting
28.0% of the Company's  original  stock prior to the  repurchase  program,  at a
total cost of $2,067,000,  or an average price per share of $13.64.  The Company
plans to continue its repurchase  program as an additional  avenue for liquidity
for its  shareholders.  The program has not affected the Company's  liquidity or
capital  positions or its ability to operate as the Company's capital growth has
exceeded its asset growth.  In addition,  the Company's  subsidiary Bank remains
more than well capitalized under current regulations.

On March 14,  1989,  the Board of  Directors  of the Federal  Deposit  Insurance
Corporation  approved a Statement of Policy on  Risk-Based  Capital which became
effective  December 31, 1990.  Under this  statement  banks are required to meet
certain  capital  standards  in  addition to leverage  standards  as  previously
outlined  under  FDIC  Rules  and  Regulations.  The Bank does not  foresee  any
material or  significant  impact to its manner of operation  in the  foreseeable
future.  Total qualifying  capital allowable under risk-based capital guidelines
for the subsidiary bank is $8,552,000.  The following table shows the risk-based
capital  ratios  and the  leverage  ratios  for  1996  as  well  as the  minimum
regulatory requirements as of September 30, 1996:

                                       13
<PAGE>15


<TABLE>
<CAPTION>
                                                    Minimum
                            Capital Ratio    Regulatory Requirement

<S>                            <C>                   <C>  
Tier 1 Capital                 13.11%                4.00%
Total Capital                  14.22%                8.00%
Leverage Ratio                  9.79%                3.00%
</TABLE>

The  issuer  is not  aware  of any  current  recommendations  by the  regulatory
authorities  which if they were implemented  would have a material effect on the
Company.


RESULTS OF OPERATIONS 
------- -- ----------

Net Interest Income 
--- -------- ------

Total interest  income  including  loan fees  increased from  $4,116,000 for the
first  nine  months of 1995 to  $4,224,000  for the same  period  in 1996.  This
increase  was due to an  increase  in the  average  loan  volume  of  $1,362,000
compared to to same period last year. However,  prime rate during the first nine
months of 1996 was .61% lower  than the same  period  last year.  Yield on loans
decreased from 10.88% to 10.83% compared to the same period last year. Loan fees
showed a decrease  of $8,800 from the same  period  last year  primarily  due to
decrease in fee related  credit  demand.  Total  interest  income on investments
increased  $178,000 or 16.89% for the nine  months of 1996  compared to the same
period last year. Average outstanding investments increased $5,419,000 due to an
higher growth in total deposits without the corresponding  rate of growth in the
loan  portfolio.  This  increase  provided the Bank with funds to invest in time
certificate of deposits with other banks,  securities,  and fed funds. The yield
on  investments  showed a decrease of .56% related to lower  interest  rates and
lower prime lending rate.  

Interest  expense  increased  from  $1,109,000  as of the end of the first  nine
months  of 1995 to  $1,429,000  in 1996.  Average  outstanding  interest-bearing
deposit  accounts  increased  $2,826,000  during the first  nine  months of 1996
versus the same  period  last  year.  The  average  cost of funds for the period
ending  September  30, 1996 was .56% more than the same period last year.  Since
yields from  investments  are  generally  lower than  yields on loans,  interest
margin for the nine months ended  September 30, 1996 is 6.82%  compared to 7.78%
in the same period last year.As a result of these factors,  net interest  income
for the first nine months of 1996 decreased .84% over the same period last year.

For the third quarter, total interest income increased from 

                                      14
<PAGE>16

$1,810,000 in 1995 to $1,992,000  for the same period in 1996. The average loans
for the 1996 period showed an increase of  $2,120,000  from the same period last
year.  However,  the average  prime rate during the third  quarter was .75% less
than the same  period  last year  which  caused  the yield on loans in the third
quarter of 1996 to be  approximately  .23% lower than 1995.  Loan fees  showed a
decrease of $20,300 over the same period last year.  Following  the trend in the
prime lending rate, the investment  portfolio  showed an decrease of .69% in its
yield. For the third quarter of 1996 interest expense increased from $428,000 to
$595,000.  Average  outstanding   interest-bearing  deposit  accounts  increased
$3,394,000  during the third  quarter  versus  the same  period  last year.  The
average cost of funds for the third quarter of 1996  increased  .25% compared to
the same period last year. As a result of these factors, net interest income for
the third quarter of 1996 increased 1.11% over the third quarter of 1995.

Other Operating Income 
----- --------- ------

Service  charges on deposit  accounts  as of the end of the first nine months of
1996 decreased to $242,000  versus  $283,000 for the same period in 1995 and was
centered in service charges related to return check and overdraft  charges which
decreased  $24,000.  Other charges and fees increased  $34,000 compared to 1995,
primarily due to increase in wire transfer fees of $18,300 in 1996.

Service  charges on deposit  accounts  for the third  quarter of 1996  decreased
$10,000  over the same  period  last year and was  primarily  centered  in lower
collection of return check charges and  overdraft  fees.  Other charges and fees
increased  $16,000  primarily  due to an increase in collection of wire transfer
fees and safe deposit box fees.

Loan Loss Provision
---- ---- ---------

The decrease in loan loss provision was primarily due to management's assessment
of the adequacy of the allowance account.  The balance in the allowance for loan
losses at September 30, 1996 was  $1,090,000 or 2.15% of total loans compared to
$1,272,000 or 2.59% at September 30, 1995.

The  allowance  for loan  losses is  maintained  at a level that  management  of
Company considers to be adequate for losses that can be reasonably  anticipated.
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 potential  losses in the loan portfolio,  as well as
prevailing and anticipated economic conditions.


Management employs a systematic methodology on a monthly 
                                         15
<PAGE>17

basis to  determine  the adequacy of the  allowance  for current and future loan
losses.  Each loan is graded at the time of  extension  or renewal by the credit
administrator. 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.

Other Operating Expenses
----- --------- --------

Total other operating expenses decreased $53,000 as of the end of the first nine
months of 1996  compared  to the same  period last year.  Total  salary  expense
increased  $72,000 directly related to incentive  program based on growth goals.
Foreclosure and OREO expense  decreased $86,000 primarily related to maintenance
of properties held in 1995. Data processing fees decreased  $5,700 and insurance
costs decrease  $7,400.  These decreases were offset by consulting fees increase
of $15,600  directly  related to the Bank's SBA loan program and  assisting  the
Bank to develop a formal sales culture.

For the third quarter 1996 operating  expenses increased $40,300 compared to the
same period last year and was  centered in  salaries  and  employee  benefits of
$26,300  for  the  same  reason  as  mentioned  above  and  expense  charged  to
foreclosure and OREO expense associated with property foreclosed and sold in the
current quarter amounting to $7,400.

Provision for Income Taxes 
--------- --- ------ -----

The Company's  provision for income taxes as of the end of the first nine months
of 1996 increased from $615,000 in 1995 to $741,000. This increase was primarily
related  to the growth in income and is  considered  normal.  For the first nine
months of 1996 the  company's  total  effective  tax rate was 42.1%  compared to
41.1% in 1995.

For the third  quarter 1996 the  provision  for income taxes  increased  $24,300
compared to the third  quarter of 1995.  This  increase was related to the items
mentioned  above. The Company's total effective tax rate was 42.5% for the third
quarter of 1996 versus 42.5% for the same period last year.

Net Income 
--- ------

Net income for the first nine months of 1996  increased  from  $882,000  for the
same period in 1995 to  $1,018,000,  or an increase of 15.4%.  Third quarter net
income increased $32,000 or 10.0% over the same period last year.

                                       16
<PAGE>18

                          PART II  -  OTHER INFORMATION
                          ---- --     ----- -----------

ITEM 1 - LEGAL PROCEEDINGS
         ----- -----------
         No material developments from that which was reported in the 10-K dated
         March 29, 1996 for the year ended December 31, 1995.

ITEM 2 - CHANGE IN SECURITIES
         ------ -- ----------
         None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
         -------- ---- ------ ----------
         None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------- -- ------- -- - ---- -- -------- -------
         None

ITEM 5 - OTHER INFORMATION
         ----- -----------
         None

ITEM 6 - REPORTS ON FORM 8-K
         ------- -- ---- ---
         No  reports on Form 8-K have been  filed by the  registrant  during the
         third quarter of 1996 for which this report is filed.



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: November 14, 1996                  By:  /s/ Shirley W. Nelson            
                                            ---------------------------
                                              Shirley W. Nelson
                                              Chairman and
                                              Chief Executive Officer


DATE: November 14, 1996                  By:  /s/ Kikuo Nakahara
                                            ---------------------------
                                              Kikuo Nakahara
                                              Chief Financial Officer


                                       17
<PAGE>19

<TABLE>
<CAPTION>
                               WEIGHTED AVERAGE SHARES
                         Nine Months Ended September 30, 1996

                                                        PRIMARY        FULLY
                                                        -------        -----

<S>                                                     <C>           <C>    
A.  Common Stock                                        424,780       424,780

    424,259  12-31-95  (Bal. Fwd.)
    424,259  to 03-21-96  80 days  =    33,940,720
    425,359  to 04-10-96  20 days  =     8,507,180
    425,909  to 05-17-96  37 days  =    15,758,633
    425,659  to 05-22-96   5 days  =     2,128,295
    424,659  to 09-30-96 132 days  =    56,054,988
                         274 days  =   116,389,816

Average shares outstanding for period =    424,780


            Options - Fully                              39,654
            -------   -----

    Use Higher of Year End Price
       or Average Price

     Year End Price  =         $26.00
     Average Price   =         $31.75

    Use Avg Price of $31.75

SN       8,250 X (31.75 - 10.45)  = 5,535
                 ---------------
                      31.75

MZ       1,000 X (31.75 - 10.00)  =   685
                 ---------------
                      31.75

SN      10,000 X (31.75 - 10.00)  = 6,850
                 ---------------
                      31.75

SN      15,689 X (31.75 - 10.00)   10,758
                 ---------------
                      31.75

SN       8,333 X (31.75 - 12.00)  = 5,184
                 ---------------
                      31.75

MZ       2,900 X (31.75 - 13.50)  = 1,667
                 ---------------
                      31.75

TW         400 X (31.75 - 12.25)  =   246
                 ---------------
                      31.75

SN         978 X (31.75 - 13.25)  =   570
                 ---------------
                      31.75
</TABLE>
                                          18
<PAGE>20

<TABLE>
<CAPTION>
<S>                                                               <C>  
DD       2,500 X (31.75 - 13.00)  = 1,476
                 ---------------
                      31.75

MZ       1,045 X (31.75 - 13.00)  =   617
                 ---------------
                      31.75

FD       1,950 X (31.75 - 13.00)  = 1,152
                 ---------------
                      31.75

AC         400 X (31.75 - 13.00)  =   236
                 ---------------
                      31.75

TW       1,500 X (31.75 - 13.00)  =   886
                 ---------------
                      31.75

SN       4,000 X (31.75 - 17.75)  = 1,764
                 ---------------
                      31.75

MZ       2,000 X (31.75 - 17.75)  =   882
                 ---------------
                      31.75

DD       1,000 X (31.75 - 17.75)  =   441
                 ---------------
                      31.75

TW       1,000 X (31.75 - 17.75)  =   441
                 --------------
                      31.75

FD         500 X (31.75 - 17.75)  =   220
                 ---------------
                      31.75

AC         100 X (31.75 - 17.75)  =    44
                 ---------------
                      31.75

                Options - Primary                                 37,446
                -------   -------

                 Average Price for the Year
                          $29.08

SN       8,250 X (29.08 - 10.45)  = 5,285
                 ---------------
                      29.08

MZ       1,000 X (29.08 - 10.00)  =   656
                 ---------------
                      29.08

SN      10,000 X (29.08 - 10.00)  = 6,561
                 ---------------
                      29.08

SN      15,689 X (29.08 - 10.00)   10,294
                 ---------------
                      29.08

SN       8,333 X (29.08 - 12.00)  = 4,894
                 ---------------
                      29.08
</TABLE>

                                        19
<PAGE>21

<TABLE>
<CAPTION>
<S>                                 <C>  
MZ       2,900 X (29.08 - 13.50)  = 1,554
                 ---------------
                      29.08

TW         400 X (29.08 - 12.25)  =   231
                 ---------------
                      29.08

SN         978 X (29.08 - 13.25)  =   532
                 ---------------
                      29.08

DD       2,500 X (29.08 - 13.00)  = 1,382
                 ---------------
                      29.08

MZ       1,045 X (29.08 - 13.00)  =   578
                 ---------------
                      29.08

FD       1,950 X (29.08 - 13.00)  = 1,078
                 ---------------
                      29.08

AC         400 X (29.08 - 13.00)  =   221
                 ---------------
                      29.08

TW       1,500 X (29.08 - 13.00)  =   829
                 ---------------
                      29.08

SN       4,000 X (29.08 - 17.75)  = 1,558
                 ---------------
                      29.08

MZ       2,000 X (29.08 - 17.75)  =   779
                 ---------------
                      29.08

DD       1,000 X (29.08 - 17.75)  =   390
                 ---------------
                      29.08

TW       1,000 X (29.08 - 17.75)  =   390
                 ---------------
                      29.08

FD         500 X (29.08 - 17.75)  =   195
                 ---------------
                      29.08

AC         100 X (29.08 - 17.75)  =    39
                 ---------------
                      29.08
</TABLE>
                                          20
<PAGE>22
<TABLE>
<CAPTION>
<S>                                              <C>           <C>   
TOTAL SHARES 3RD QUARTER                            464,313       462,105 
                                                    =======       =======

TOTAL SHARES YEAR END                               456,780       457,038 
                                                    =======       =======
 
NET INCOME 3RD QUARTER                             $348,131      $348,131
                                                    =======       =======

NET INCOME YEAR END 1996                                NA            NA
                                                  =========     =========

EARNINGS PER SHARE 3RD QTR                           $ .75         $ .75
                                                    =======       =======
EARNINGS PER SHARE YTD                                  NA            NA
                                                    =======       =======
</TABLE>

                                        21