<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, 1998

                           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 
438,035 shares of no par value common stock issued as of June 30, 1998


<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

                         Notes to Financial Statements.....................  6

                         Interest Rate Risk Reporting Schedule.............  7


ITEM 2

                         Management's Discussion and Analysis of Financial

                         Condition and Results of Operations ..............  8-16

                                   PART II - OTHER INFORMATION

           ITEMS 1-6 ......................................................  17-19

</TABLE>

2
<PAGE>

SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION JUNE 30, 1998 AND DECEMBER 31, 1997
               (UNAUDITED)

<TABLE>
<CAPTION>


ASSETS                                                        06/30/98       12/30/97  
                                                        --------------------------------
<S>                                                        <C>            <C>
Cash and due from banks                                    $  8,191,470     $  8,664,015
Federal funds sold                                           25,510,000       12,910,000
                                                           ------------     ------------
Cash and cash equivalents                                    33,701,470       21,574,015
Time deposits with other financial institutions               6,337,000        5,664,000
Investment securities (fair value of $14,903,513 at         
    June 30, 1998 and $12,515,656 at                        
    December 31, 1997 ) held to maturity                     14,898,572       12,496,651
Loans, net of allowance for loan losses of                  
   $1,289,897 at June 30, 1998 and                          
   $1,238,012 at December 31, 1997                           50,528,486       60,832,859
Other real estate owned                                       1,359,342        1,222,080
Premises and equipment, net                                   1,003,031          872,619
Interest receivable and other assets                          2,360,511        1,679,307
                                                           ------------     ------------

Total Assets                                               $110,188,412     $104,341,531
                                                           ------------     ------------
                                                           ------------     ------------
                                                         
LIABILITIES AND SHAREHOLDERS' EQUITY                     
Deposits:
Demand                                                      $32,678,577      $31,062,481
Interest-bearing transaction accounts                        33,777,699       33,012,655
Savings                                                       3,062,987        2,264,538
Time certificates $100,000 and over                          19,375,308       16,848,993
Other time certificates                                       6,676,972        7,243,075
                                                           ------------     ------------
Total Deposits                                               95,571,543       90,431,742
Interest payable and other liabilities                        1,193,089        1,031,120
                                                           ------------     ------------
Total Liabilities                                            96,764,632       91,462,862

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;                                 
   438,035 shares outstanding at June 30, 1998 and
   436,565 shares outstanding at December 31, 1997            3,721,630        3,709,145
Retained Earnings                                             9,702,150        9,169,524
                                                           ------------     ------------
Total Shareholders' Equity                                   13,423,780       12,878,669

Total Liabilities and Shareholders' Equity                 $110,188,412     $104,341,531
                                                           ------------     ------------
                                                           ------------     ------------

</TABLE>

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


                                                                               3
<PAGE>

SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF
INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997

<TABLE>
<CAPTION>

                                                THREE MONTHS   THREE MONTHS     SIX MONTHS     SIX MONTHS
                                               ENDED 6-30-98  ENDED 6-30-97  ENDED 6-30-98  ENDED 6-30-97
INTEREST INCOME:
<S>                                            <C>            <C>            <C>             <C>
Interest and fees on loans                        $1,521,508     $1,622,703     $3,143,348     $3,127,713
Interest on time deposits with other
   financial institutions                             93,260        129,144        183,275        251,820
Interest on U.S. government
   treasury securities                               210,581        170,438        377,842        312,055
Interest on federal funds sold                       276,018        117,505        488,118        279,714
                                                  ----------     ----------     ----------     ----------
Total interest income                              2,101,367      2,039,790      4,192,583      3,971,302

INTEREST EXPENSE:
Interest on deposits                                 516,198        466,553      1,017,740        922,575
                                                  ----------     ----------     ----------     ----------
Total interest expense                               516,198        466,553      1,017,740        922,575
                                                  ----------     ----------     ----------     ----------
Net interest income                                1,585,169      1,573,237      3,174,843      3,048,727
Provision for loan losses                             25,000         25,000        100,000        100,000
                                                  ----------     ----------     ----------     ----------
Net interest income after
   provision for loan losses                       1,560,169      1,548,237      3,074,843      2,948,727

NON-INTEREST INCOME:
Service charges on deposit accounts                   90,953         70,672        176,955        144,626
Other customer fees and charges                       42,603         51,756         85,981         99,478
                                                  ----------     ----------     ----------     ----------
Total non-interest income                            133,556        122,428        262,936        244,104

NON-INTEREST EXPENSE:
Salaries and employee benefits                       513,088        505,778      1,019,307      1,007,578
Occupancy expense                                     98,249         92,511        202,084        182,618
Equipment expense                                     56,974         43,084        101,129         71,150
Other                                                277,062        320,984        520,449        566,628
                                                  ----------     ----------     ----------     ----------
Total non-interest expense                           945,373        962,357      1,842,969      1,827,974
Income before income taxes                           748,352        708,308      1,494,810      1,364,857
Provision for income taxes                           312,234        295,013        623,293        570,049
                                                  ----------     ----------     ----------     ----------
Net Income                                          $436,118       $413,295       $871,517       $794,808
                                                  ----------     ----------     ----------     ----------
                                                  ----------     ----------     ----------     ----------

EARNINGS PER SHARE:
Earnings per common share                              $1.00          $0.97          $1.99          $1.85
Earnings per common share assuming dilution            $0.93          $0.89          $1.86          $1.72
Weighted average shares outstanding                  437,678        427,896        437,434        429,483
Weighted avg. shrs. outsdg. assuming dilution        469,528        463,020        469,284        463,020
                                                  ----------     ----------     ----------     ----------
                                                  ----------     ----------     ----------     ----------

</TABLE>

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

4
<PAGE>

SUMMIT BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF 
CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND  1997 
        (UNAUDITED) 

<TABLE>
<CAPTION>

                                                           SIX MONTHS          SIX MONTHS 
                                                        ENDED 6-30-98       ENDED 6-30-97 
<S>                                                     <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received                                         $  4,041,361         $ 3,575,737
Fees received                                                  425,959             512,933
Interest paid                                               (1,057,921)           (935,921)
Cash paid to suppliers and employees                        (1,914,864)         (1,663,628)
Income taxes paid                                             (634,364)           (465,000)
                                                          -------------        -----------
Net cash provided by operating activities                      860,171           1,024,121

CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in time deposits with
   other financial institutions                               (693,000)          1,186,000
Maturity of investment securities                            5,598,079           2,515,682
Purchase of investment securities                           (8,000,000)         (4,498,526)
Net (increase) decrease in loans to customers               10,181,099          (5,543,793)
Recoveries on loans previously charged-off                       2,123               1,750
(Increase) decrease in premises and equipment                 (242,394)           (118,353)
                                                          -------------        -----------
Net cash provided by (used in) investing activities          6,845,907          (6,457,240)

CASH FLOWS FROM FINANCING ACTIVITIES:
(Increase) decrease in demand, interest
   bearing transaction, and savings deposits                 3,179,589             140,148
Net increase (decrease) in time deposits                     1,960,212             (39,864)
(Increase) decrease in other assets                           (392,018)             43,232
Exercise of stock options                                       18,755                 -  
Repurchase of common stock                                      62,701            (180,182)
Dividends paid                                                   6,270            (320,756)
                                                          -------------        -----------
Net cash provided by (used in) financing activities          4,421,377            (357,422)
                                                          -------------        -----------
Net increase (decrease) in cash and cash equivalents        12,127,455          (5,790,541)
Cash and cash equivalents at the 
   beginning of the year                                    21,574,015          19,168,515
                                                          -------------        -----------
Cash and cash equivalents at the end of the year          $ 33,701,470       $  13,377,974
                                                          -------------        -----------

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY 
OPERATING ACTIVITIES:
Net Income                                                 $   871,517       $     794,808
Adjustments to reconcile net income to 
   net cash provided by operating activities:
Depreciation and amortization                                  111,982              95,009
Provision for loan losses and OREO losses                      100,000             150,000
(Increase) decrease in interest receivable                      58,677            (151,836)
Increase (decrease) in unearned loan fees                      (46,876)            (24,900)
Increase (decrease) in accrued interest payable                (40,181)            (13,346)
(Increase) decrease in prepaid expenses                        (92,663)             (4,798)
Increase (decrease) in accounts payable                        (91,214)             74,136
Increase (decrease) in income taxes payable                    (11,071)            105,048
                                                          -------------        -----------
Total adjustments                                              (11,346)            229,313
                                                          -------------        -----------
Net cash provided by operating activities                  $   860,171        $  1,024,121
                                                            -----------        -----------
</TABLE>

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

                                                                               5
<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, 
1998 and the results of operations for the six months ended June 30, 1998 and 
1997 and cash flows for the six months ended June 30, 1998 and 1997.

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 1997 Annual Report to Shareholders, which is incorporated by 
reference in the Company's 1997 annual report on Form 10-K. The results of 
operations for the six months ended June 30, 1998 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 has restated 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 437,434 and 429,483 
during the three months ended June 30, 1998 and 1997, 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.

6
<PAGE>

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 1998

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.


FINANCIAL CONDITION

LIQUIDITY MANAGEMENT

The consolidated loan-to-deposit ratio at June 30, 1998 was 54.2% which was a 
decrease from 71.8% for the same period in 1997.  Total outstanding loans as 
of June 30, 1998 decreased $4,781,353 compared to the same period a year ago 
while total deposits increased $15,162,243 versus the same time last year.  
The decrease in loans was caused by the highly competitive marketplace while 
the growth in deposits reflects continued success with our marketing program. 
The average loan-to-deposit ratio for the second quarter of 1998 was 56.4%, 
down from 68.8% for the same period last year.  This decrease was caused by 
an increase in average total deposits of $12,337,000 or 15.37% while average 
total loans decreased $1,878,000 or 3.5%. Management continues to seek growth 
and acquisition of quality credits. 

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 $54,937,042 on June 30, 1998.  This 
amount represented 57.4% of total deposits in comparison to the liquidity 
ratio of 34.0% as of June 30, 1997. This increase is primarily a result of an 
increase in deposits & a decrease in loans.  It is management's belief that 
the current liquidity level is appropriate given current economic conditions 
and 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.

                                                                               7
<PAGE>

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)

                         6-30-98       %    12-31-97        %    6-30-97       %
<S>                   <C>         <C>     <C>         <C>      <C>        <C>
 Fed funds sold          $25,510     55%     $12,910      42%    $ 8,190     30%
 Interest bearing
    deposits               6,337     14%       5,664      18%      8,421     31%
 Securities               14,899     31%      12,497      40%     10,743     39%
                                                                 -------
                                                                 -------

</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, 1998 were comprised of $4,498,303 in U. S. Gov't notes 
and $10,400,269 in U.S. Gov't agencies.


CHANGES IN FINANCIAL POSITION

As of June 30, 1998, total deposits increased $5,140,000 from December 31, 
1997 while at the same time net loans outstanding decreased $10,295,000.  
Total deposits as of June 30, 1998 were $95,572,000, an increase of 18.9% 
from $80,409,000 as of June 30, 1997.  Total loans as of June 30, 1998 were 
$51,818,000, a decrease of 10.2% from $57,728,000 as of June 30, 1997.  

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)

                        6-30-98      %    12-31-97       %      6-30-97      %
<S>                     <C>        <C>    <C>          <C>      <C>        <C>
Demand                  $32,679    43%      $31,062    34%      $26,090    32%
Savings                   3,063     4%        2,664     3%        3,209     4%
Interest bearing
  trans. deposits        33,778    44%       33,013    37%       29,723    37%
Other time               26,052     9%       24,092    26%       21,387    27%
                                                                -------
                                                                -------

</TABLE>

8
<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.

<TABLE>
<CAPTION>

                                   LOAN COMPARATIVE
                                  ($000.00 Omitted)


                           6-30-98    %   12-31-97         %      6-30-97      %
<S>                        <C>      <C>   <C>            <C>      <C>        <C>
 Commercial                $37,042  72%     $44,044      71%      $40,337    70%
 Real estate-const           4,773   9%       7,471      12%        8,297    14%
 Real estate-other           4,724   9%       4,850       8%        3,020     5%
 Installment/other           5,279  10%       5,706       9%        6,074    11%
                                                                  -------
                                                                  -------

</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>

                                 6-30-98  12-31-97  6-30-97
<S>                            <C>       <C>      <C>
Loans 90 days or more past
  due & still accruing            $    0    $  408   $    3
Non-accrual loans                    413       176        0
Other real estate owned            1,359     1,222    1,241
                                  ------    ------   ------
   Total non-performing assets    $1,772    $1,806   $1,244
                                  ------    ------   ------
                                  ------    ------   ------
Non-performing assets to
  period end loans plus
  other real estate owned          3.43%     2.85%    2.20%
Allowance to non-performing
  loans                             312%      212%   37624%
Allowance to non-performing
  assets                             73%       68%      94%

</TABLE>

                                                                               9
<PAGE>

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

Other real estate owned ("OREO")is comprised of properties acquired through 
foreclosure.  These properties are carried at the lower of the recorded loan 
balance or their estimated fair market value based on appraisal.  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 increase in non-performing assets from June 30, 1997 to June 30, 1998 is 
due primarily to an increase in non-accrual loans of $413,000 and a increase 
of $118,000 in OREO.

The total OREO amount, $1,359, 000, is related to three properties. One of 
the properties is vacant land in the Oakland Hills.  The second property is 
two contiguous parcels in the Danville/Diablo Mountain area of Alameda 
County.  The third property is vacant land located in Contra Costa County.

10
<PAGE>

CAPITAL POSITION

As of June 30, 1998, Shareholders' Equity was $13,424,000. This represents an 
increase of $1,191,000 or 9.7% 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, 1998, the Company has 
repurchased a total of 158,872 shares of the Company stock constituting 29.6% 
of the Company's original stock prior to the repurchase program, at a total 
cost of $2,313,438, or an average price per share of $14.56. 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.  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 ("FDIC") 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 $10,868,000. 

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, 1998:

<TABLE>
<CAPTION>

                                           Minimum
                   Capital Ratio    Regulatory Requirement
<S>                <C>              <C>
Tier 1 Capital        15.45%                4.00%
Total Capital         16.71%                8.00%
Leverage Ratio        10.04%                4.00%

</TABLE>

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.

                                                                              11
<PAGE>

RESULTS OF OPERATIONS 


NET INTEREST INCOME

Total interest income including loan fees increased from $3,971,000 for the 
first six months of 1997 to $4,193,000 for the same period in 1998. The 
primary factor for increased income was the increase in deposits causing an 
increase in investment income.  Loan fees showed a decrease of $83,830 over 
the same period last year.  The yield on loans and fees decreased 90 basis 
points from the same period last year, due to the competitive nature of the 
marketplace.  The increase in interest income from investments was due to 
total average outstanding investments volume increase of $6,526,000 for the 
first six months in 1998 versus 1997. This increase was primarily due to an 
increase in deposit balances. The yield on investments for the first six 
months of 1998 showed an increase of 19 basis points compared to the same 
period in 1997.
 
Interest expense increased from $923,000 at the end of the first six months 
of 1997 to $1,018,000 in 1998.  This increase was due to an increase in 
average interest-bearing deposit accounts of $6,492,000 during the first six 
months of 1998 versus the same period last year.  The average cost of funds 
for the period ending June 30, 1998 was 25 basis points less than the same 
period last year. As a result of these factors, net interest margin for the 
first six months of 1998 was 6.77% compared to 7.25% for the same period last 
year. 

For the second quarter, total interest income on loans including loan fees 
increased from $2,040,000 in 1997 to $2,101,000 for the same period in 1998. 
This increase is primarily due to an increase in investment instruments. 
Average loan volume for the second quarter of 1998 showed a decrease of 
$402,000 from the same period last year. For the second quarter of 1998, 
total interest income on investments increased $162,772. This increase was 
attributable to an average investment volume increase of $11,437,000, 
although the interest yield remained approximately the same as last year at 
5.71%.

12
<PAGE>

For the second quarter of 1998, interest expense increased $51,000 compared 
to the same period in 1997. Average outstanding interest bearing deposits 
increased from $56,072,000 in the second quarter in 1997 to $62,460,000 in 
the second quarter in 1998. Average cost of funds for the same period was 
3.31% in 1998 compared to 3.32% in 1997. As a result, net interest income for 
the second quarter of 1997 increased $12,000, or .77% compared to the same 
period in 1996.


OTHER OPERATING INCOME 

Service charges on deposit accounts as of the end of the first half of 1998 
increased to $177,000 from $145,000 for the same period in 1997.  The 
increase was due to higher fees collected in service charges related to 
return check and overdraft charges and from normal service charges on 
commercial accounts.  Other charges and fees decreased $13,497, primarily due 
to lower fees collected from merchant fees.

Service charges on deposit accounts for the second quarter of 1998 increased 
$20,281 compared to the same period last year due to decreased collection of 
fees associated with return check and overdraft charges and normal service 
charges collected on commercial accounts. Other customer fees and charges 
decreased $9,153 for the present quarter associated with decreased fees from 
merchant activities.  


LOAN LOSS PROVISION

The decrease in loan loss provision was primarily due to a perceived 
improvement in California's economy as well as the current level of the 
allowance for loan losses.

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 is 
based on management's evaluation of potential losses in the loan portfolio, 
as well as prevailing and anticipated economic conditions.

                                                                              13
<PAGE>

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 
credit losses for the six months ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>
                                          SIX MONTHS ENDED
                                          -----------------
                                          ($000.00 Omitted)
                                          6-30-98  6-30-97
<S>                                       <C>      <C>
Balance, beginning of the period           $1,238   $1,070
Provision for loan losses                     100      100
Recoveries                                      2        2
Loans charged-off                             (50)     (43)
                                           ------   ------
Balance, end of the period                 $1,290   $1,129
                                                    ------
                                                    ------

</TABLE>

The balance in the allowance for loan losses at June 30, 1998 was 2.49% of 
total loans compared to 1.95% of total loans at June 30, 1997.


OTHER OPERATING EXPENSES


Total other operating expenses increased $14,995 as of the end of the first 
six months of 1998 compared to the same period last year.  This increase was 
primarily due to an increase in occupancy and equipment expense related to 
the opening of the Bank's new Pleasanton office, the purchase of a new 
LAN/WAN computer system, and a new telephone system.

For the second quarter of 1998, operating expenses increased $11,128 compared 
to the same period last year for the same reasons mentioned above.

14
<PAGE>

PROVISION FOR INCOME TAXES 

The Company's provision for income taxes as of the end of the first six 
months of 1998 increased from $570,000 in 1996 to $623,000.  This increase is 
attributed to increased income from regular business operations. For the same 
period in 1998 the Company's total effective tax rate was 41.8% compared to 
41.8% in 1997. 

For the second quarter of 1998, the provision for income taxes increased 
$17,000 compared to the second quarter of 1997. The effective tax rate for 
this period was 41.7% versus 41.8% for the same period last year.


NET INCOME

Net income for the first half of 1998 increased from $795,000 for the same 
period in 1997 to $872,000, or a increase of 9.7%. Second quarter net income 
increased $23,000 or 5.5% over the same period last year.

IMPACT OF YEAR 2000

In regard to the Year 2000 issue, the Company has conducted a review of its 
computer systems to identify the systems that could be affected and has 
developed an implementation plan to resolve the issue.  The Year 2000 problem 
is the result of computer programs being written using two digits rather than 
four to define the applicable year.  Any of the Company's programs that have 
time sensitive software may recognize a date using "00" as the year 1900 
rather than 2000.  This could result in a major system failure or 
miscalculations.

The company expects its Year 2000 date conversion project to be completed on 
a timely basis.  During the execution of this project, the Company will incur 
internal staff costs as well as consulting and other expenses related to 
enhancements necessary to prepare the systems for the Year 2000.  The expense 
of the Year 2000 project as well as the related potential effect on the 
Company's earning is not expected to have a material effect on its financial 
position or results of operations.

                                                                              15
<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, 1998. The table presents 
each major category of interest-earning assets and interest 
bearing-liabilities.

                             INTEREST RATE RISK REPORTING SCHEDULE


REPORTING INSTITUTION:  SUMMIT BANK                      REPORTING DATE: 6-30-98


                  REMAINING TIME BEFORE MATURITY OR INTEREST RATE ADJUSTMENT

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

  A.   INVESTMENTS:

  1.   U. S. TREASURIES                 $4,498      $2,000       $2,498           $0              $0              $0          $0
  2.   U. S. AGENCIES                   10,400       4,500        1,000        4,900               0               0           0
  3.   FED FUNDS SOLD                   25,510      25,510            0            0               0               0           0
  4.   PURCHASED CDS                     6,337         297        3,961        2,079               0               0           0
                                       -------     -------     --------      -------         -------         -------     -------
       TOTAL INVESTMENTS               $46,745     $32,307       $7,459       $6,979             $ 0             $ 0          $0

  B.   LOANS                           $49,719     $48,089       $1,086         $244          $  265             $36          $0
       TOTAL LOANS                     $49,719     $48,089       $1,086         $244          $  265             $36          $0
                                       -------     -------     --------      -------         -------         -------     --------
  C.   TOTAL EARNING ASSETS            $96,464     $80,396       $8,545       $7,223          $  265             $36          $0

II.    COST OF FUNDS (DEPOSITS)

  A.   CERTIFICATE OF DEPOSITS         $26,052     $17,543       $8,379         $110          $   20              $0          $0
  B.   MONEY MARKET ACCOUNTS            29,399       1,633       13,678       14,087               0               0           0
  C.   TRANSACTION ACCOUNTS              5,480         235          705        1,858           1,336           1,347           0
  D.   SAVINGS ACCOUNTS                  3,063         131          394        1,038             747             753           0
                                       -------     -------     --------      -------         -------         -------     -------
       TOTAL COST OF FUNDS             $63,994     $19,542      $23,156      $17,093          $2,103          $2,100          $0

III.   INTEREST SENSITIVE ASSETS       $96,464     $80,396       $8,545       $7,223            $265             $36          $0

IV.    INTEREST SENSITIVE LIABILITIES  $63,994     $19,542      $23,156      $17,093          $2,103          $2,100          $0
                                       -------     -------     --------      -------         -------         -------     -------
V.     GAP                             $32,470     $60,854     ($14,611)     ($9,870)        ($1,838)        ($2,064)         $0

VI.    CUMULATIVE GAP                  $32,470     $60,854      $46,243      $36,373         $34,535         $32,471     $32,471

VII.   GAP RATIO                          1.51        4.11         0.37         0.42            0.13            0.02

VIII.  CUMULATIVE RATIO                   1.51        4.11         2.08         1.61            1.56            1.51        1.51

IX.    GAP AS A % OF TOTAL ASSETS        30.10       56.41       -13.54        -9.15           -1.70           -1.91        0.00

X.     CUMULATIVE GAP AS A % OF          30.10       56.41        42.87        33.72           32.02           30.10       30.10
            TOTAL ASSETS

</TABLE>

16
<PAGE>

PART II  -  OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS
          No material developments from that which was
          reported in the Form 10-K dated March 31, 1998 for
          the year ended December 31, 1997.
     

ITEM 2 - CHANGES IN SECURITIES
          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 April 22,
           1998.

ITEM 5 - OTHER INFORMATION
          None

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

          11   Statement re: computation of per share
               earnings

          27   Financial Data Schedule   

         (b)  Reports on Form 8-K
                         NONE

                                                                              17
<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:                             BY:
       -------------------              --------------------------
                                         SHIRLEY W. NELSON
                                         CHAIRMAN AND CEO
                                         (PRINCIPAL EXECUTIVE OFFICER)


  DATE:                             BY:
       -------------------              --------------------------
                                         KIKUO NAKAHARA
                                         CHIEF FINANCIAL OFFICER
                                         (PRINCIPAL FINANCIAL OFFICER)



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