<PAGE>

              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:               JUNE 30, 1999

                 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 458,347 shares of no par value common stock
                issued as of JUNE 30, 1999



<PAGE>



PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
ITEM 1                                                              PAGE
<S>                                                                <C>
SUMMIT BANCSHARES, INC. AND SUBSIDIARY FINANCIAL STATEMENTS

          Consolidated Balance Sheets ............................    3

          Consolidated Statements of Income ......................    4

          Consolidated Statement of Cash Flows ...................    5

          Consolidated Statement of Changes in Shareholders'
          Equity .................................................    6

          Notes to Financial Statements...........................  7-8

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


ITEM 2

          Management's Discussion and Analysis of Financial

          Condition and Results of Operations ................ 10-18



                     PART II - OTHER INFORMATION

  ITEMS 1-6 ..................................................... 19-20

</TABLE>


2

<PAGE>

SUMMIT BANKSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION JUNE 30, 1999 AND DECEMBER 31, 1998
               (UNAUDITED)

<TABLE>
<CAPTION>

ASSETS                                                                      06/30/99                 12/31/98
---------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                     <C>
Cash and due from banks                                                   $  7,573,026             $  8,126,067
Federal funds sold                                                          15,168,000               18,640,000
                                                                          ------------             ------------
Cash and cash equivalents                                                   22,741,026               26,766,087
Time deposits with other financial institutions                             25,590,487               24,135,487
Investment securities (fair value of $12,865,840 at
     June 30, 1999 and $15,489,100 at
     December 31, 1998) held to maturity                                    13,000,000               15,499,670
Loans, net of allowance for loan losses of
     $1,314,794, at June 30, 1999 and
     $1,319,451 at December 31,1998                                         53,518,676               53,013,148
Other real estate owned                                                        560,107                  212,262
Premises and equipment, net                                                    898,291                  976,388
Interest receivable and other assets                                         7,480,400                4,052,554
                                                                          ------------             ------------

Total Assets                                                               $126,788,987             $124,655,576
                                                                           ------------             ------------
                                                                           ------------             ------------

LIABILITIES AND SHAREHOLDER'S EQUITY
Deposits:
Demand                                                                     $ 42,219,272             $ 38,076,664
Interest-bearing transaction accounts                                        40,485,687               35,350,967
Savings                                                                       2,268,121                2,135,736
Time certificates $100,000 and over                                          19,836,651               26,147,116
Other time certicficates                                                      6,582,180                8,178,876
                                                                           ------------             ------------
Total Deposits                                                              111,391,911              109,889,359
Interest payable and other liabilies                                            756,691                  877,802
                                                                           ------------             ------------
Total Liabilities                                                           112,148,602              110,587,161
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;
458,347 shares outstanding at June 30,1999 and
452,684 shares outstanding at December 31, 1998                               3,837,449                3,829,340
Retained Earnings                                                            10,802,937               10,259,075
                                                                           ------------             ------------
Total Shareholders'Equity                                                    14,640,386               14,088,415


Total Liabilities and Shareholder's Equity                                 $126,788,988             $124,655,576
                                                                           ------------             ------------
                                                                           ------------             ------------

</TABLE>
The accompanying notes are an integral part of these consolidated statements.
                                                                               3
<PAGE>

SUMMIT BANKSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF
INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998

<TABLE>
<CAPTION>
                                                  THREE MONTHS        THREE MONTHS          SIX MONTHS            SIX MONTHS
                                                  ENDED 6-30-99       ENDED 6-30-98       ENDED 6-30-99         ENDED 6-30-98
<S>                                               <C>                 <C>                 <C>                   <C>
INTEREST INCOME:
Interest and fees on loans                          $1,436,657          $1,521,508          $2,811,666            $3,143,348
Interest on time deposits with other
  financial institutions                               379,791              93,260             743,471               183,275
Interest on U.S. government
  treasury securities                                  189,020             210,581             349,788               377,842
Interest on federal funds sold                         128,548             276,018             312,550               488,118
                                                  -------------        -------------        -------------        ------------
Total interest income                                2,134,015           2,101,367           4,217,475             4,192,583

INTEREST EXPENSE:
Interest on deposits                                   535,226             516,198           1,122,444             1,017,740
                                                  -------------        -------------        -------------        ------------
Total interest expense                                 535,226             516,198           1,122,444             1,017,740
                                                  -------------        -------------        -------------        ------------
Net interest income                                  1,598,790           1,585,169           3,095,031             3,174,843
Provision for loan losses                                   -               25,000                  -                100,000
                                                  -------------        -------------        -------------        ------------
Net interest income after
  provision for loan losses                          1,598,790           1,560,169           3,095,031             3,074,843

NON-INTEREST INCOME:
Service charges on deposit accounts                     86,238              90,953             173,059               176,955
Other customer fees and charges                         44,106              42,603             147,007                85,981
                                                  -------------        -------------        -------------        ------------
Total non-interest income                              130,344             133,556             320,066               262,936

NON-INTEREST EXPENSE:
Salaries and employee benefits                         544,800             513,088           1,066,248             1,019,307
Occupancy expense                                      103,356              98,249             205,935               202,084
Equipment expense                                       63,919              56,974             124,236               101,129
Other                                                  250,013             277,062             493,381               520,449
                                                  -------------        -------------        -------------        ------------
Total non-interest expense                             962,089             945,373           1,889,800             1,842,969
Income before income taxes                             767,045             748,352           1,525,297             1,494,810
Provision for income taxes                             325,172             312,234             637,301               623,293
                                                  -------------        -------------        -------------        ------------
Net Income                                            $441,873            $436,118            $887,996              $871,517
                                                  -------------        -------------        -------------        ------------
                                                  -------------        -------------        -------------        ------------

EARNINGS PER SHARE:
Earnings per common share                                $0.96               $1.00               $1.94                 $1.99
Earnings per common share assuming dilution              $0.94               $0.93               $1.90                 $1.86
Weighted average shares outstanding                    459,030             437,678             456,684               437,434
Weighted avg. shrs. outsdg. assuming dilution          470,033             469,528             467,687               469,284
                                                  -------------        -------------        -------------        ------------
                                                  -------------        -------------        -------------        ------------

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

</TABLE>

4

<PAGE>

SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF
CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND  1998
                     (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     SIX MONTHS                  SIX MONTHS
                                                                  ENDED 6-30-99               ENDED 6-30-98
------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received                                                   $ 3,928,256                 $ 4,041,361
Fees received                                                           572,523                     425,959
Interest paid                                                        (1,173,387)                 (1,057,921)
Cash paid to suppliers and employees                                 (1,853,267)                 (1,914,864)
Income taxes paid                                                      (765,000)                   (634,364)
                                                         -----------------------     -----------------------
Net cash provided by operating activities                               709,125                     860,171

CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in time deposits with
   other financial institutions                                      (4,455,000)                   (693,000)
Maturity of investment securities                                     7,499,670                   5,598,079
Purchase of investment securities                                    (5,000,000)                 (8,000,000)
Net (increase) decrease in loans to customers                          (469,474)                 10,181,099
Recoveries on loans previously charged-off                                    0                       2,123
(Increase) decrease in premises and equipment                           (48,042)                   (242,394)
                                                         -----------------------     -----------------------
Net cash provided by (used in) investing activities                  (2,472,846)                  6,845,907

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in demand, interest
   bearing transaction, and savings deposits                          9,409,713                   3,179,589
Net increase (decrease) in time deposits                             (7,907,160)                  1,960,212
(Increase) decrease in other assets                                  (3,427,846)                   (533,138)
Exercise of stock options                                                90,000                     159,875
Repurchase of common stock (decrease)                                   (81,892)                      6,270
Dividends paid (decrease)                                              (344,135)                   (338,891)
                                                         -----------------------     -----------------------
Net cash provided by (used in) financing activities                  (2,261,320)                  4,421,377
                                                         -----------------------     -----------------------
Net increase (decrease) in cash and cash equivalents                 (4,025,041)                 12,127,455
Cash and cash equivalents at the
   beginning of the year                                             26,766,067                  21,574,015
                                                         -----------------------     -----------------------
Cash and cash equivalents at the end of the year                   $ 22,741,026                $ 33,701,470
                                                         -----------------------     -----------------------

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
  BY OPERATING ACTIVITIES:

Net Income                                                            $ 887,996                   $ 871,517
Adjustments to reconcile net income to
   net cash provided by operating activities:
Depreciation and amortization                                           118,914                     111,982
Provision for loan losses and OREO losses                                     0                     100,000
(Increase) decrease in interest receivable                              (64,493)                     58,677
Increase (decrease) in unearned loan fees                                27,731                     (46,876)
Increase (decrease) in accrued interest payable                         (50,943)                    (40,181)
(Increase) decrease in prepaid expenses                                 (50,491)                    (92,663)
Increase (decrease) in accounts payable                                 (31,890)                    (91,214)
Increase (decrease) in income taxes payable                            (127,699)                    (11,071)
                                                         -----------------------     -----------------------
Total adjustments                                                      (178,871)                    (11,346)
                                                         -----------------------     -----------------------
Net cash provided by operating activities                             $ 709,125                   $ 860,171
                                                         -----------------------     -----------------------
</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements
                                                                              5

<PAGE>

SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                      (UNAUDITED)

<TABLE>
<CAPTION>
                                                  NUMBER OF
                                                     SHARES                    COMMON               RETAINED
                                                OUTSTANDING                     STOCK               EARNINGS             TOTAL
--------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                        <C>                   <C>                  <C>
Balance at December 31, 1998                        452,684                $3,829,341            $10,259,075          14,088,416

Stock Options Exercised                               7,500                    90,000                      0              90,000

Repurchase of Common Stock                           (1,837)                  (81,892)                     0             (81,892)

Issuance of cash dividends of $.75 per share              0                         0               (344,135)           (344,135)

Net Income                                                0                         0                887,997             887,997

Balance at June 30, 1999                            458,347                 3,837,449             10,802,937          14,640,386

Balance at December 31, 1997                        436,565                 3,709,145              9,169,524          12,878,669

Stock Options Exercised                               1,580                    18,755                     -               10,000

Repurchase of Common Stock                             (110)                   (6,270)                     0              (6,270)

Issuance of cash dividends of $.75 per share              0                         0               (338,891)           (338,891)

Net Income                                                0                         0                871,517             871,517

Balance at June 30, 1998                            438,035                 3,721,630              9,702,150          13,423,780


The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

6
<PAGE>

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 financial position at June 30,
1999 and the results of operations for the six months ended June 30, 1999 and
1998 and cash flows for the six months ended June 30, 1999 and 1998.

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 1998 Annual Report to Shareholders, which is incorporated by
reference in the Company's 1998 annual report on Form 10-K. The results of
operations for the six months ended June 30, 1999 are not necessarily
indicative of the operating results for the full year.

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February of 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). The
Bank was required to adopt SFAS 128 in the fourth quarter of 1997 and restated
at that time earnings per share data for prior periods to conform with SFAS 128.
Earlier application is not permitted.

SFAS 128 replaces current earnings per share reporting requirements and requires
a dual presentation of basic and diluted earnings per share. Earnings per share
excludes dilution and is computed by dividing net income by the weighted average
common shares outstanding of 456,684 and 437,434 during the six months ended
June 30, 1999 and 1998, respectively. Diluted earnings per share reflects the
potential dilution that could occur if common shares were issued pursuant to the
exercise of options under the Bank's Stock Option Plans. Diluted earnings per
share under SFAS 128 would not have been significantly different than primary
earnings per share currently reported for the periods.


                                                                              7
<PAGE>


In June of 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which
establishes standards for reporting and display of comprehensive income and its
components; and No. 131, "Disclosures about Segments of an Enterprise and
Related Information", which establishes annual and interim reporting standards
for an enterprise's operating segments and related disclosures about its
products, services, geographic areas, and major customers. Adoption of these
statements will not impact the Bank's consolidated financial position, results
of operations or cash flows, and any effect will be limited to the form and
content of its disclosures. Both statements are effective in 1999, with earlier
application permitted.

8
<PAGE>

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, 1999. The table presents
each major category of interest-earning assets and interest
bearing-liabilities.

                      INTEREST RATE RISK REPORTING SCHEDULE
<TABLE>
<CAPTION>

REPORTING INSTITUTION:  SUMMIT BANK                                    REPORTING DATE: 6/30/99

                               REMAINING TIME BEFORE MATURITY OR INTEREST RATE ADJUSTMENT

                                $(000.00)
                                  OMITTED       UP   greater than 3   greater than 1  greater than 3    greater than  5       OVER
                                    TOTAL        3   less than    1   less than    3  less than    5    less than    10   10 YEARS
<S>                            <C>         <C>      <C>               <C>             <C>              <C>               <C>
  I.     EARNING ASSETS

      A. INVESTMENTS:
      1. U.S. TREASURIES               $0       $0               $0               $0              $0                 $0         $0
      2. U.S. AGENCIES             13,000        0            1,000           12,000               0                  0          0
      3. FED FUNDS SOLD            15,168   15,168                0                0               0                  0          0
      4. PURCHASED CDS             28,590    3,761            9,894           14,935               0                  0          0
                                ---------   ------    -------------    -------------   -------------    ---------------  ---------
         TOTAL INVESTMENTS        $56,758  $18,929          $10,894          $26,935              $0                 $0         $0

      B. LOANS                    $50,824  $48,273              $44           $1,219            $835               $452         $0
                                ---------   ------    -------------    -------------   -------------    ---------------  ---------
         TOTAL LOANS              $50,824  $48,273              $44           $1,219            $835               $452         $0

      C. TOTAL EARNING ASSETS    $107,582  $67,202          $10,938          $28,154            $835               $452         $0

  II.    COST OF FUNDS (DEPOSITS)

      A. CERTIFICATE OF DEPOSITS  $26,219  $18,969           $7,193              $27              $0                $30         $0
      B. MONEY MARKET ACCOUNTS     36,546    4,984           14,051           17,512               0                  0          0
      C. TRANSACTION ACCOUNTS       5,274      226              678            1,788           1,286              1,297          0
      D. SAVINGS ACCOUNTS           2,268       97              292              769             553                558          0
                                ---------   ------    -------------    -------------   -------------    ---------------  ---------
         TOTAL COSTS OF FUNDS     $70,307  $24,276          $22,214          $20,096          $1,839             $1,885         $0

 III.    INTEREST SENSITIVE
           ASSETS                $107,582  $67,202          $10,938          $28,154            $835               $452         $0

  IV.    INTEREST SENSITIVE
           LIABILITIES            $70,307  $24,276          $22,214          $20,096          $1,839             $1,885         $0
                                ---------   ------    -------------    -------------   -------------    ---------------  ---------

   V.    GAP                      $37,275  $42,926         ($11,276)          $8,058         ($1,004)           ($1,433)        $0

  VI.    CUMULATIVE GAP           $37,275  $42,926          $31,650          $39,708         $38,704            $37,271    $37,271

 VII.    GAP RATIO                   1.53     2.77             0.49             1.40            0.45               0.24       0.00

VIII.    CUMULATIVE RATIO            1.53     2.77             1.68             1.60            1.57               1.53       1.53

  IX.    GAP AS A % OF TOTAL
           ASSETS                   30.36    34.96            -9.18             6.56           -0.82               1.17       0.00

   X.    CUMULATIVE GAP AS A %
           OF TOTAL ASSETS          30.36    34.96            25.78            32.34           31.52              30.36      30.36

</TABLE>


                                                                              9
<PAGE>

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999

The registrant, Summit Bancshares, Inc. (the "Company") is a bank 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NONE


FINANCIAL CONDITION

LIQUIDITY MANAGEMENT

The consolidated loan-to-deposit ratio at June 30, 1999 was 48.0% which was a
decrease from 54.2% for the same period in 1998. Total outstanding loans as of
June 30, 1999 increased $3,015,000 compared to the same period a year ago while
total deposits increased $15,820,000 versus the same time last year. The
decrease in loans was primarily due to the company maintaining it's lending
standards and increased competition in the marketplace. The increase in deposits
is primarily due to the Bank's effort in marketing its products.

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 $64,332,000 on June 30, 1999. This
amount represented 57.8% of total deposits in comparison to the liquidity ratio
of 57.4% as of June 30, 1998. This relative stability is primarily a result of
both a rise in loan growth and an 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.


10
<PAGE>

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)

<TABLE>
<CAPTION>
                            6-30-99     %     12-31-98    %     6-30-98   %
<S>                        <C>        <C>     <C>       <C>    <C>      <C>
Fed funds sold              $15,168    26%     18,640    32%    25,510   54%
Interest bearing Deposits    28,590    48%     24,135    41%     6,337   14%
Securities                   13,000    26%     15,500    27%    14,898   32%
</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 June 30, 1999 were comprised of U.S. Gov't agencies.

CHANGES IN FINANCIAL POSITION

As of June 30, 1999, total deposits increased $1,503,000 from December 31, 1998
and loans outstanding increased $501,000. Total deposits as of June 30, 1999
were $111,392,000, an increase of 16.6% from $95,572,000 as of June 30, 1998.
Total loans as of June 30, 1999 were $54,833,000, a slight increase from
$54,332,000 as of June 30, 1998.

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

                               DEPOSIT COMPARATIVE
                                ($000.00 Omitted)
<TABLE>
<CAPTION>
                                  6-30-99       %    12-31-98    %    6-30-98     %
<S>                              <C>          <C>    <C>       <C>    <C>       <C>
Demand                            $42,219      38%    38,077    35%    32,679    34%
Savings                             2,268       2%     2,136     2%     3,063     3%
Interest bearing Trans. Deposits   40,486      36%    35,351    32%    33,778    35%
Other time                         26,419      24%    34,326    31%    26,052    28%
</TABLE>

                                                                              11
<PAGE>


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)
<TABLE>
<CAPTION>
                        6-30-99      %    12-31-98    %    6-30-98      %
<S>                    <C>         <C>    <C>       <C>    <C>        <C>
Commercial              $36,495     67%    38,403    71%    37,042     72%
Real estate-const         5,789     11%     5,060     9%     4,773      9%
Real estate-other         7,271     13%     5,673    10%     4,724      9%
Installment/other         5,298     10%     5,196    10%     5,279     10%
</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.


                                    NON-PERFORMING ASSETS
                                     ($000.00 Omitted)
<TABLE>
<CAPTION>
                                      6-30-99  12-31-98  6-30-98
<S>                                   <C>      <C>       <C>
Loans 90 days or more past
 due & still accruing                  $   50    $  662   $    0
Non-accrual loans                         522       651      413
Other real estate owned                   560       212    1,359
                                       ------    ------   ------
   Total non-performing assets         $1,132    $1,525   $1,772
                                       ------    ------   ------
                                       ------    ------   ------
Non-performing assets to
  period end loans plus
  other real estate owned                2.04%     2.81%    3.43%

Allowance to non-performing loans         230%      100%     312%

Allowance to non-performing assets        116%       86%      73%
</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

12
<PAGE>


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. 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
non-interest expense in the period incurred.

The decrease in non-performing assets from June 30, 1998 to June 30, 1999 is
the result of an increase in loans 90 days past due and non-accrual loans of
$159,000 and a decrease of $799,000 in OREO. Of the $572,000 total loans 90
days or more past due and still accruing in 1999, $217,000 is guaranteed by
Small Business Administration.

The total OREO amount, $560,000 is related to two properties. One of the
properties consists of 3 vacant lots in Pacheco. The second is a single
family home in Alamo. The Bank is currently in escrow on the pacheco
property, and has received an offer for the single family home in Alamo.

                                                                             13
<PAGE>


CAPITAL POSITION

As of June 30, 1999, Shareholders' Equity was $14,640,000. This represents an
increase of $1,216,000 or 9.1% over the same period last year. Since the
inception of the repurchase program in 1989, the Company has authorized the
repurchase of $2,500,000 of its stock. As of JUNE 30, 1999, the Company has
repurchased a total of 161,749 shares of the Company stock constituting 30.1% of
the Company's original stock prior to the repurchase program, at a total cost of
$2,444,000, or an average price per share of $15.11. 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
position 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.

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, 1999:

<TABLE>
<CAPTION>
                                           Minimum
                   Capital Ratio    Regulatory Requirement
<S>                <C>              <C>
Tier 1 Capital        19.12%                4.00%
Total Capital         20.37%                8.00%
Leverage Ratio        12.06%                4.00%
</TABLE>

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

14
<PAGE>


RESULTS OF OPERATIONS


NET INTEREST INCOME

Total interest income including loan fees increased from $4,193,000 for the
first six months of 1998 to $4,217,000 for the same period in 1999.

The yield on loans and fees increased 111 basis points over the same period
last year. The increase in interest income from investments was due to an
increase in volume as the yield decreased 4 basis points compared to the same
period in 1998. Average total investments were $19,449,000 higher than the
same period last year due to deposit growth.

Interest expense increased from $3,075,000 at the end of the first six months
of 1998 to $3,095,000 in 1999. This increase was due to an increase in
average interest-bearing deposit accounts of $6,386,000 during the first six
months of 1999 versus the same period last year. The average cost of funds
for the period ending June 30, 1999 was 6 basis points more than the same
period last year.

As a result of these factors, net interest margin for the first six months of
1999 was 5.71% compared to 5.81% for the same period last year.

OTHER OPERATING INCOME

Service charges on deposit accounts as of the end of the first six months of
1999 decreased slightly to $173,000 versus $177,000 for the same period in
1998.

Other customer fees and charges increased $61,000 for the present quarter
associated with the sale of real estate.


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 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


                                                                             15
<PAGE>

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 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.

The following table summarizes the activity in the Bank's allowance for loan
losses for the six months ended June 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                           SIX MONTHS ENDED
                                           ----------------
                                           ($000.00 Omitted)
                                           6-30-99  6-30-98

<S>                                        <C>      <C>
Balance, beginning of the period           $1,319   $1,238
Provision for loan losses                       0      100
Recoveries                                      1        2
Loans charged-off                               5       50
                                           ------   ------
Balance, end of the period                 $1,315   $1,290
</TABLE>

The balance in the allowance for loan losses at June 30, 1999 was 2.46% of
total loans compared to 2.49% of total loans at June 30, 1998.


OTHER OPERATING EXPENSES

Total other operating expenses increased $47,000 as of the end of the first
six months of 1999 compared to the same period last year. This increase was
primarily due to an increase in salaries and employee expense. Equipment
Expense increase was related to continued upgrades in our computer delivery
system.


PROVISION FOR INCOME TAXES

The Company's provision for income taxes as of the end of the first six
months of 1999 increased from $623,000 in 1998 to $637,000. For the same
period in 1999 the Company's total effective tax rate was 41.8% compared to
41.7% in 1998.


16
<PAGE>


NET INCOME

Net income for the first six months of 1999 increased to $888,000 from $872,000
for the same period in 1998, or an increase of 1.8%.


IMPACT OF YEAR 2000

Many computer systems and software products now in use around the world
experience problems handling dates beyond the year 1999 and will need to be
modified before the year 2000 in order to remain functional. As a result, before
the year 2000, computer systems and/or software products and applications used
by many companies may need to be upgraded to comply with such year 2000
requirements.

The Company has reviewed its internal systems, products and the readiness of
third parties with whom it has business relationships and has assigned a
dedicated task force to develop and implement a year 2000 plan (the "Plan")
which is designed to cover all of the Company's activities. The Plan, is
reviewed regularly by senior management and the Board of Directors and includes
the evaluations of both information technology ("IT") and non-IT systems,
consists of five steps.

Step one involved increasing awareness by educating and involving the Board
of Directors and all levels of management, and all employees regarding the
need to address year 2000 issues. Step two consisted of identifying all of
the Company's systems, products and relationships that may be impacted by
year 2000. Step three involved determining the Company's current state of
year 2000 readiness for those areas identified in step two and prioritizing
areas that need to be fixed. Step four consisted of developing a plan for
those areas identified as needing correction. Step five consists of the
implementation and execution of the Company's Plan and completing the steps
identified to attain year 2000 readiness. The company is currently executing
step five. The Company has upgraded all of its IT and non-IT systems and has
tested the majority of these systems. Based on the Company's assessment to
date, it believes that all of the Company's internal IT and non-IT systems
that have been tested are year 2000 compliant.

The Company believes that any modifications deemed necessary will be made on
a timely basis and does not believe that the cost of such modifications will
have a material effect on


                                                                             17
<PAGE>

the Company's operating results. To date, the Company's costs related to the
year 2000 issues have amounted to approximately $85,000 and the Company does
not expect the aggregate amount spent on the year 2000 to exceed $100,000.
The Company has completed its contingency plan with respect to year 2000
requirements and is currently testing the plan.

The Company's expectations as to the extent and timeliness of modifications
required in order to achieve year 2000 compliance is a forward-looking
statement subject to risks and uncertainties. Actual results may vary
materially as a result of a number of factors, including, among others, those
described above in this section. There can be no assurance that unexpected
delays or problems, including the failure to ensure year 2000 compliance by
systems or products supplied to the Company by third parties, will not have
an adverse effect on the Company, its financial performance and results of
operations. In addition, the Company cannot predict the effects of the year
2000 issue on its customers or the resulting effects on the Company. As a
result, if such customers do not take preventative and/or corrective actions
in a timely manner, the year 2000 issue could have an adverse effect on their
operations and accordingly have a material adverse effect on the Company's
business, financial condition and results of operations. Furthermore, the
Company's current understanding of expected costs is subject to change as the
project progresses and does not include the cost of internal software and
hardware replaced in the normal course of business whose installation
otherwise may be accelerated to provide solutions to the year 2000 compliance
issues.


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


18
<PAGE>

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
          No material developments from that which was
          reported in the Form 10-K dated for the year ended December 31, 1998.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
          None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
          None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          Annual Meeting of shareholders minutes are attached
          (Exhibit #1) The annual meeting was held May 19, 1999.

ITEM 5 - OTHER INFORMATION
          None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (Article 9)
         (a)  Exhibits

          2   Weighted Average Shares

         27   Financial Data Schedule

         (b)  Reports on Form 8-K
               None


                                                                             19
<PAGE>


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 13, 1999             BY: /s/ Shirley W. Nelson
       -------------------             -----------------------------
                                        SHIRLEY W. NELSON
                                        CHAIRMAN AND CEO
                                        (PRINCIPAL EXECUTIVE OFFICER)


  DATE: August 13, 1999             BY: /s/ Kikuo Nakahara
       -------------------             -----------------------------
                                        KIKUO NAKAHARA
                                        CHIEF FINANCIAL OFFICER
                                        (PRINCIPAL FINANCIAL OFFICER)




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