<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

 
Mark One
 
[ X ]  Quarterly report pursuant to section 13 or 15(d) of the Securities
       Exchange Act of 1934
 
       For the quarterly period ended March 31, 1998; or
 
[   ]  Transition report pursuant to section 13 or 15(d) of the Securities
       Exchange Act of 1934
 
       For the Transition period from            to            .
                                      ----------    -----------
 
                         COMMISSION FILE NUMBER 0-11986


                             SUMMIT BANCSHARES, INC.
        -----------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            TEXAS                                        75-1694807
  ---------------------------                     ------------------------
    (State of Incorporation)                         (I.R.S. Employer
                                                     Identification No.)

                  1300 SUMMIT AVENUE, FORT WORTH, TEXAS 76102
                  -------------------------------------------
                    (Address of principal executive offices)


                                (817) 336-6817
             ------------------------------------------------------  
              (Registrant's telephone number, including area code)


                                   NO CHANGE
 -----------------------------------------------------------------------------
        (Former name, former address and former fiscal year if changed
                              since last report)


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  YES   X   NO  
                                                ---      ---   

The number of shares of common stock, $1.25 par value, outstanding at March 31,
1998 was 6,518,094 shares.
<PAGE>
 
                            SUMMIT BANCSHARES, INC.



                                     INDEX


PART I - FINANCIAL INFORMATION                                   PAGE NO.

 
Item 1.  Financial Statements
 
         Consolidated Balance Sheets at March 31, 1998 and
         1997 and at December 31, 1997                                4
 
         Consolidated Statements of Income for the Three Months
         Ended March 31, 1998 and 1997 and for the Year Ended
         December 31, 1997                                            5
 
         Consolidated Statements of Changes in Shareholders' Equity
         for the Three Months Ended March 31, 1998 and 1997 and
         for the Year Ended December 31, 1997                         6
 
         Consolidated Statements of Cash Flows for the Three Months
         Ended March 31, 1998 and 1997 and for the Year Ended
         December 31, 1997                                            7-8
 
         Notes to Consolidated Financial Statements for the Three
         Months Ended March 31, 1998 and 1997 and for the Year
         Ended December 31, 1997                                      9-20

The March 31, 1998 and 1997 and the December 31, 1997 financial statements
included herein are unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring adjustments), which are, in
the opinion of management of the registrant, necessary to a fair statement of
the results for the interim periods.

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations for the Three Months Ended
         March 31, 1998 and 1997                                      21-26


2
<PAGE>
 
PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

Item 2.   Change in Securities

Item 3.   Defaults Upon Senior Securities

Item 4.   Submission of Matters to a Vote of Security Holders

Item 5.   Other Information

Item 6.   Exhibits and Reports on Form 8-K




                                                                               3
<PAGE>
 
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
-----------------------------

                    SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
 
                                                                    (Unaudited)          (Unaudited)
                                                                     March 31,           December 31,
                                                             --------------------------  ------------
                                                                1998          1997          1997
                                                             ----------  --------------  ------------
ASSETS                                                                   (In Thousands)
<S>                                                          <C>         <C>             <C>
 
CASH AND DUE FROM BANKS - NOTE 1                              $ 25,574        $ 25,362     $ 30,487
FEDERAL FUNDS SOLD                                              43,390          20,545       35,760
INVESTMENT SECURITIES - NOTE 2
 Securities Available-for-Sale, at fair value                   59,503          60,630       60,476
 Securities Held-to-Maturity, at cost (fair value of            47,946          55,431       45,151
   $48,268,000, $55,220,000, and $45,360,000
   March 31, 1998 and 1997 and December 31, 1997,
   respectively)
LOANS - NOTE 3
  Loans, Net of Unearned Discount                              287,632         232,363      276,069
      Allowance for Loan Losses                                 (4,192)         (3,327)      (4,065)
                                                              --------        --------     --------
      LOANS, NET                                               283,440         229,036      272,004
 
PREMISES AND EQUIPMENT - NOTE 4                                  7,857           7,032        7,916
ACCRUED INCOME RECEIVABLE                                        3,827           3,143        3,442
OTHER REAL ESTATE - NOTE 5                                         151             163          151
OTHER ASSETS                                                     3,673           2,148        4,407
                                                              --------        --------     --------
 
      TOTAL ASSETS                                            $475,361        $403,490     $459,794
                                                              ========        ========     ========
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
DEPOSITS - NOTE 6
  Noninterest-Bearing Demand                                  $114,454        $ 97,970     $126,398
  Interest-Bearing                                             303,889         256,488      275,326
                                                              --------        --------     --------
 
      TOTAL DEPOSITS                                           418,343         354,458      401,724
 
SECURITIES SOLD UNDER
 AGREEMENTS TO REPURCHASE - NOTE 7                              12,138          10,687       14,689
ACCRUED INTEREST PAYABLE                                           691             573          678
OTHER LIABILITIES                                                2,018           1,551        1,591
                                                              --------        --------     --------
 
      TOTAL LIABILITIES                                        433,190         367,269      418,682
                                                              --------        --------     --------
 
COMMITMENTS AND CONTINGENCIES - NOTE 11
 
SHAREHOLDERS' EQUITY - NOTES 12, 14 AND 18
  Common Stock - $1.25 Par Value; 20,000,000 shares
   authorized; 6,518,094, 3,235,636 and 6,501,332 shares
   issued and outstanding at March 31, 1998 and 1997 and
   at December 31, 1997, respectively                            8,148           4,045        8,127
  Capital Surplus                                                6,214           6,148        6,251
  Retained Earnings                                             27,594          26,055       26,491
  Unrealized Gain (Loss) on Investment Securities
    Available for Sale, Net of Tax                                 314             (27)         243
  Treasury Stock at Cost (5,000 shares at March 31, 1998)          (99)            -0-          -0-
                                                              --------        --------     --------
 
      TOTAL SHAREHOLDERS' EQUITY                                42,171          36,221       41,112
                                                              --------        --------     --------
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $475,361        $403,490     $459,794
                                                              ========        ========     ========
</TABLE>
The accompanying Notes should be read with these financial statements.

4
<PAGE>
 
                   SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
 
 
                                                          (Unaudited)                               (Unaudited)
                                                       For the Three Months Ended March 31,   Year Ended December 31,
                                                      --------------------------------------
                                                              1998                1997                  1997
                                                      --------------------  ----------------  ------------------------
                                                                   (In Thousands, Except Per Share Data)
<S>                                                   <C>                   <C>               <C>
 
INTEREST INCOME
  Interest and Fees on Loans                                       $6,678            $5,384                   $24,063
  Interest and Dividends on Investment Securities:
    Taxable                                                         1,624             1,736                     6,878
    Exempt from Federal Income Taxes                                   13                 3                        23
  Interest on Federal Funds Sold                                      558               203                     1,008
                                                                   ------            ------                   -------
 
      TOTAL INTEREST INCOME                                         8,873             7,326                    31,972
                                                                   ------            ------                   -------
 
INTEREST EXPENSE
  Interest on Deposits                                              3,086             2,410                    10,773
  Interest on Securities Sold Under
   Agreements to Repurchase                                           163               130                       528
                                                                   ------            ------                   -------
 
      TOTAL INTEREST EXPENSE                                        3,249             2,540                    11,301
                                                                   ------            ------                   -------
 
      NET INTEREST INCOME                                           5,624             4,786                    20,671
 
LESS: PROVISION FOR LOAN LOSSES - NOTE 3                              158               155                       900
                                                                   ------            ------                   -------
 
      NET INTEREST INCOME AFTER
       PROVISION FOR LOAN LOSSES                                    5,466             4,631                    19,771
                                                                   ------            ------                   -------
 
NON-INTEREST INCOME
  Service Charges and Fees on Deposits                                486               437                     1,890
  Loss on Sale of Investment Securities                               -0-               -0-                        (1)
  Other Income                                                        384               325                     1,376
                                                                   ------            ------                   -------
 
      TOTAL NON-INTEREST INCOME                                       870               762                     3,265
                                                                   ------            ------                   -------
 
NON-INTEREST EXPENSE
  Salaries and Employee Benefits                                    2,041             1,747                     7,524
  Occupancy Expense - Net                                             239               197                       774
  Furniture and Equipment Expense                                     295               211                       919
  Other Real Estate Owned (Income) Expense - Net                       (3)               (3)                      (63)
  Other Expense                                                       934               694                     3,164
                                                                   ------            ------                   -------
 
      TOTAL NON-INTEREST EXPENSE                                    3,506             2,846                    12,318
                                                                   ------            ------                   -------
 
      INCOME BEFORE INCOME TAXES                                    2,830             2,547                    10,718
 
APPLICABLE INCOME TAXES - NOTE 9                                      966               875                     3,678
                                                                   ------            ------                   -------
 
      NET INCOME                                                   $1,864            $1,672                   $ 7,040
                                                                   ======            ======                   =======
 
      NET INCOME PER SHARE - NOTE 14
          Basic                                                     $. 29              $.26                     $1.09
          Diluted                                                     .27               .25                      1.04
 
</TABLE>



The accompanying Notes should be read with these financial statements.

                                                                               5
<PAGE>
 
                   SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
              FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                   AND FOR THE YEAR ENDED DECEMBER 31, 1997
                                  (Unaudited)
<TABLE>
<CAPTION>
 
 
                                                                                   Unrealized
                                                                                   Gain (Loss)
                             Common Stock   Capital   Retained   on Investment      Treasury
                             -------------
                                Shares       Amount    Surplus      Earnings     Securities-Net    Stock     Total
                             -------------  --------  ---------  --------------  ---------------  -------  ---------
                                                  (Dollars in Thousands, Except Per Share Data)
<S>                          <C>            <C>       <C>        <C>             <C>              <C>      <C>
BALANCE AT
 JANUARY 1, 1997                3,233,036    $4,041     $6,136         $24,675            $ 228    $ -0-    $35,080
 
Net Income for the
 Three Months Ended
 March 31, 1997                                                          1,672                                1,672
 
Stock Options Exercised             2,600         4         12                                                   16
 
Cash Dividend $.045
 Per Share                                                                (292)                                (292)
 
Securities Available-for-
 Sale Adjustment                                                                           (255)               (255)
                             -------------  --------  ---------  --------------  ---------------  -------  ---------
BALANCE AT
 MARCH 31, 1997                 3,235,636     4,045      6,148          26,055              (27)     -0-     36,221
 
Net Income for the
 Nine Months Ended
 December 31, 1997                                                       5,368                                5,368
 
Stock Options Exercised            19,190        24        103                                                  127
 
Two-for-One Stock Split         3,246,506     4,058                     (4,058)                                 -0-
 
Cash Dividend $.135
 Per Share                                                                (874)                                (874)
 
Securities Available-for-
 Sale Adjustment                                                                            270                 270
                             -------------  --------  ---------  --------------  ---------------  -------  ---------
BALANCE AT
 DECEMBER 31, 1997              6,501,332     8,127      6,251          26,491              243      -0-     41,112
 
Purchase of Stock Held
 in Treasury                                                                                        (494)      (494)
 
Retirement of Stock
 Held in Treasury                 (20,000)      (25)                      (370)                      395        -0-
 
Net Income for the
 Three Months Ended
 March 31, 1998                                                          1,864                                1,864
 
Stock Options Exercised            36,762        46        (37)                                                   9
 
Cash Dividend $.06
 Per Share                                                                (391)                                (391)
 
Securities Available-for-
 Sale Adjustment                                                                             71                  71
                             -------------  --------  ---------  --------------  ---------------  -------  ---------
BALANCE AT
 MARCH 31, 1998                 6,518,094    $8,148     $6,214         $27,594            $ 314    $ (99)   $42,171
                             =============  ========  =========  ==============  ===============  =======  =========
</TABLE>

The accompanying Notes should be read with these financial statements.

6
<PAGE>
 
                    SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                    AND FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
 
                                                                     (Unaudited)        (Unaudited)
                                                                      March 31,         December 31,
                                                              -------------------------
                                                                 1998         1997          1997
                                                              ----------  -------------  -----------
                                                                          (In Thousands)
<S>                                                           <C>         <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net Income                                                   $  1,864       $  1,672     $  7,040
                                                               --------       --------     --------
  Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities:
    Depreciation and Amortization                                   298            196          840
    Net Premium Amortization (Discount Accretion)
      of Investment Securities                                       30            (38)          97
    Provision for Loan Losses                                       158            155          900
    Deferred Income Taxes (Benefit)                                  97            (20)         233
    Loss on Sale of Investment Securities                           -0-            -0-            1
    Writedown of Other Real Estate                                  -0-              3            4
    Net Gain From Sale of Other Real Estate                         -0-            -0-          (21)
    Net (Gain) Loss on Sale of Premises and Equipment                (1)            (1)          12
    Decrease (Increase) in Accrued Income and Other Assets          310           (487)      (2,796)
    Increase in Accrued Expenses and Other Liabilities              440            815          333
                                                               --------       --------     --------
 
      Total Adjustments                                           1,332            623        ( 397)
                                                               --------       --------     --------
      NET CASH PROVIDED BY OPERATING ACTIVITIES                   3,196          2,295        6,643
                                                               --------       --------     --------
 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in Federal Funds Sold                                 (7,630)          (195)     (15,410)
  Proceeds from Matured and Prepaid Investment Securities
    . Held-to-Maturity                                            7,279          8,057       21,486
    . Available-for-Sale                                          9,206          5,500       14,906
  Proceeds from Sales of Investment Securities                      -0-            -0-        4,506
  Purchase of Investment Securities
    . Held-to-Maturity                                          (10,111)        (5,024)     (12,884)
    . Available-for-Sale                                         (8,119)        (7,930)     (16,702)
  Loans Originated and Principal Repayments, Net                (11,705)       (12,414)     (56,363)
  Recoveries of Loans Previously Charged-Off                         16            219          439
  Proceeds from Sale of Premises and Equipment                        2              1            1
  Proceeds from Sale of Other Real Estate                           -0-            -0-           32
  Purchases of Premises and Equipment                              (240)          (123)      (1,664)
                                                               --------       --------     --------
 
      NET CASH USED BY INVESTING ACTIVITIES                     (21,302)       (11,909)     (61,653)
                                                               --------       --------     --------
 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net Increase in Demand Deposits, Savings
   Accounts and Interest Bearing Transaction Accounts            15,593          7,924       41,081
  Net Increase  in Certificates of Deposit                        1,027          1,511       15,620
  Net Increase (Decrease) in Repurchase Agreements               (2,551)        (2,522)       1,480
  Payments of Cash Dividends                                       (391)          (292)      (1,166)
  Proceeds from Stock Options Exercised                               9             16          143
  Purchase of Treasury Stock                                       (494)           -0-          -0-
                                                               --------       --------     --------
 
       NET CASH PROVIDED BY FINANCING ACTIVITIES                 13,193          6,637       57,158
                                                               --------       --------     --------
 
NET INCREASE (DECREASE) IN CASH AND DUE FROM
 BANKS                                                           (4,913)        (2,977)       2,148
 
CASH AND DUE FROM BANKS AT BEGINNING
  OF PERIOD                                                      30,487         28,339       28,339
                                                               --------       --------     --------
 
CASH AND DUE FROM BANKS AT END OF PERIOD                       $ 25,574       $ 25,362     $ 30,487
                                                               ========       ========     ========
</TABLE>

                                                                               7
<PAGE>
 
                    SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS - CONT'D
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                    AND FOR THE YEAR ENDED DECEMBER 31, 1997
                                  (Unaudited)



SUPPLEMENTAL SCHEDULE OF OPERATING AND INVESTING ACTIVITIES:
<TABLE>
<CAPTION>
 
                                                    (Unaudited)        (Unaudited)
                                                     March 31,        December 31,
                                            -------------------------
                                               1998          1997         1997
                                            -----------  ------------  -----------
                                                 (In Thousands)
<S>                                         <C>          <C>           <C>
 
(1)  Interest Paid                              $3,236         $2,605     $11,260
(2)  Income Taxes Paid (Refund Received)            10            -0-       3,876
 
</TABLE>

8
<PAGE>
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
         FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED)
              AND FOR THE YEAR ENDED DECEMBER 31, 1997 (UNAUDITED)

NOTE 1 - Summary of Significant Accounting Policies
------                                             

     The accounting and reporting policies of Summit Bancshares, Inc. (the
"Corporation") and  Subsidiaries are in accordance with generally accepted
accounting principles.  A summary of the more significant policies follows:

     Basis of Presentation and Principles of Consolidation
     -----------------------------------------------------

     The consolidated financial statements of the Corporation include its
     accounts and those of its wholly-owned subsidiaries, Summit National Bank
     and Summit Community Bank, National Association (the "Subsidiary Banks")
     and Summit Bancservices, Inc., a wholly-owned operations subsidiary.   All
     significant intercompany balances and transactions have been eliminated in
     consolidation.
 
     Use of Estimates
     ----------------

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting periods.  Actual results could differ from those
     estimates.

     Cash and Due From Banks
     -----------------------

     The Subsidiary Banks are required to maintain certain balances at the
     Federal Reserve Bank based on their levels of deposits. During the first
     three months of 1998 the average cash balance maintained at the Federal
     Reserve Bank was $730,000. Compensating balances held at correspondent
     banks, to minimize service charges, averaged approximately $15,980,000
     during the same period.

     Investment Securities
     ---------------------

     The Corporation has adopted Statement of Financial Accounting Standards No.
     115, Accounting for Certain Investments in Debt and Equity Securities
     ("SFAS 115").  At the date of purchase, the Corporation is required to
     classify debt and equity securities into one of three categories:
     held-to-maturity, trading or available-for-sale. At each reporting date,
     the appropriateness of the classification is reassessed. Investments in
     debt securities are classified as held-to-maturity and measured at
     amortized cost in the financial statements only if management has the
     positive intent and ability to hold those securities to maturity.
     Securities that are bought and held principally for the purpose of selling
     them in the near term are classified as trading and measured at fair value
     in the financial statements with unrealized gains and losses included in
     earnings. Investments not classified as either held-to-maturity or trading
     are classified as available-for-sale and measured at fair value in the
     financial statements with unrealized gains and losses reported, net of tax,
     in a separate component of shareholders' equity until realized.

     The Corporation has the ability and intent to hold to maturity its
     investment securities classified as held-to-maturity; accordingly, no
     adjustment has been made for the excess, if any, of amortized cost over
     market.  In determining the investment category classifications, management
     considers its asset/liability strategy, changes in interest rates and
     prepayment risk, the need to increase capital and other factors.  Under
     certain circumstances (including the deterioration of the issuer's
     creditworthiness, a change in tax law, or statutory or regulatory
     requirements), the Corporation may change the investment security
     classification.  In the periods reported for 1998 and 1997 the Corporation
     held no securities that would have been classified as trading securities.

     All investment securities are adjusted for amortization of premiums and
     accretion of discounts.  Amortization of premiums and accretion of
     discounts are recorded to income over the contractual maturity or estimated
     life of the individual investment on the level yield method.  Gain or loss
     on sale of investments is based upon the specific identification method and
     the gain or loss is recorded in non-interest income.  Income earned on the
     Corporation's investments in state  and political subdivisions is not
     taxable.


                                                                               9
<PAGE>
 
NOTE 1 - Summary of Significant Accounting Policies (cont'd.)
------                                                       

     Loans and Allowance for Loan Losses
     -----------------------------------

     Loans are stated at the principal amount outstanding less unearned discount
     and the allowance for loan losses.  Unearned discount on installment loans
     is recognized as income over the terms of the loans by a method
     approximating the interest method.  Interest income on all  other loans is
     recognized based upon the principal amounts outstanding.  The accrual of
     interest on a loan is discontinued when, in the opinion of management,
     there is doubt about the ability of the borrower to pay interest or
     principal.  Interest previously earned, but uncollected on such loans, is
     written off.  When loans are put on non-accrual all payments received are
     applied to the principal and no interest income is recorded until the loan
     is returned to accrual status or the principal has been reduced to zero.

     The Corporation follows Statement of Financial Accounting Standards No.
     114, "Accounting by Creditors for Impairment of a Loan," as amended by
     Statement of Financial Accounting Standards No. 118, "Accounting by
     Creditors for Impairment of a Loan - Income Recognition and Disclosure."
     Under this standard, the allowance for loan losses related to loans that
     are identified for evaluation in accordance with Statement No. 114
     (impaired loans) is based on discounted cash flows using the loan's initial
     effective rate or the fair value of the collateral for certain collateral
     dependent loans.

     The allowance for loan losses is comprised of amounts charged against
     income in the form of a provision for loan losses as determined by
     management.  Management's evaluation is based on a number of factors,
     including the Subsidiary Banks' loss experience in relation to outstanding
     loans and the existing level of the allowance, prevailing and prospective
     economic conditions, and management's continuing review of the discounted
     cash flow values of impaired loans and its evaluation of the quality of the
     loan portfolio.  Loans are placed on non-accrual status when management
     believes that the borrower's financial condition, after giving
     consideration to economic and business conditions and collection efforts,
     is such that collection of interest is doubtful.  Loans are charged against
     the allowance for loan losses when management believes that the
     collectibility of the principal is unlikely.

     Premises and Equipment
     ----------------------

     Premises and equipment are stated at cost less accumulated depreciation.
     Depreciation expense is computed on the straight-line method based upon the
     estimated useful lives of the assets ranging from three to forty years.
     Maintenance and repairs are charged to operating expenses.  Renewals and
     betterments are added to the asset accounts and depreciated over the
     periods benefitted.  Depreciable assets sold or retired are removed from
     the asset and related accumulated depreciation accounts and any gain or
     loss is reflected in the income and expense accounts.

     Other Real Estate
     -----------------

     Other real estate is foreclosed property held pending disposition and is
     valued at the lower of its fair value or the recorded investment in the
     related loan.  At foreclosure, if the fair value of the real estate
     acquired is less than the bank's recorded investment in the related loan, a
     writedown is recognized through a charge to the allowance for loan losses.
     Any subsequent reduction in value is recognized by a charge to income.
     Operating expenses of such properties, net of related income, and gains and
     losses on their disposition are included in non-interest expense.

     Federal Income Taxes
     --------------------

     The Corporation joins with its Subsidiaries in filing a consolidated
     federal income tax return.  The Subsidiaries pay to the parent a charge
     equivalent to their current federal income tax based on the separate
     taxable income of the Subsidiaries.

     The Corporation and the Subsidiaries maintain their records for financial
     reporting and income tax reporting purposes on the accrual basis of
     accounting.  Deferred income taxes are provided in accordance with
     Statement of Financial Accounting Standards No. 109, "Accounting for Income
     Taxes".  Deferred income taxes are provided for accumulated temporary
     differences due to basic differences for assets and liabilities for
     financial reporting and income tax purposes.

     Realization of net deferred tax assets is dependent on generating
     sufficient future taxable income.  Although realization is not assured,
     management believes it is more likely than not that all of the net deferred
     tax assets will be realized.  The amount of the net deferred tax asset
     considered realizable, however, could be reduced in the near term if
     estimates of future taxable income are reduced.

     Cash and Cash Equivalents
     -------------------------

     For the purpose of presentation in the Statements of Cash Flows, cash and
     cash equivalents are defined as those amounts included in the balance sheet
     caption "Cash and Due from Banks."

     Reclassification
     ----------------

     Certain reclassifications have been made to the 1997 financial statements
     to conform to the 1998 presentation.

10
<PAGE>
 
NOTE 1 - Summary of Significant Accounting Policies (cont'd.)
------                                                       


     Earnings Per Common and Common Equivalent Share
     -----------------------------------------------

     Earnings per common and common equivalent share is calculated by dividing
     net income by the weighted average number of common shares and common share
     equivalents.  Stock options are regarded as common share equivalents and
     are therefore considered in earnings per share calculations, if dilutive.
     The number of common share equivalents is determined using the treasury
     stock method.

     Audited Financial Statements
     ----------------------------

     The consolidated balance sheet as of December 31, 1997, and the
     consolidated statements of income, changes in shareholders' equity and cash
     flows for the year ended December 31, 1997 are headed "unaudited" in these
     financial statements.  These statements were reported in the Securities
     Exchange Commission Form 10-K as of December 31, 1997 as "audited" but are
     required to be reflected in these statements as unaudited because of the
     absence of an independent auditor's report.


NOTE 2 - Investment Securities
------                        

     A summary of amortized cost and estimated fair values of investment
     securities is as follows (in thousands):

<TABLE>
<CAPTION>
 
                                                                     March 31, 1998
                                                      ---------------------------------------------
                                                                   Gross        Gross
                                                      Amortized  Unrealized  Unrealized     Fair
                                                        Cost       Gains       Losses       Value
                                                      ---------  ----------  -----------  ---------
<S>                                                   <C>        <C>         <C>          <C>
 
Investment Securities - Held-to-Maturity
  U.S. Treasury Securities                             $ 17,988        $209       $  (5)   $ 18,192
  U.S. Government Agencies
   and Corporations                                      21,823         135         (67)     21,891
  U.S. Government Agency Mortgage
   Backed Securities                                      6,996          51          (7)      7,040
  Obligations of States and
   Political Subdivisions                                 1,139           6         -0-       1,145
                                                       --------        ----       -----    --------
 
    Total Held-to-Maturity Securities                    47,946         401         (79)     48,268
                                                       --------        ----       -----    --------
 
Investment Securities - Available-for-Sale
  U.S.  Treasury Securities                              44,534         456         (25)     44,965
  U.S. Government Agencies
    and Corporations                                      7,068          13         (22)      7,059
  U.S. Government Agency Mortgage
    Backed Securities                                     6,499          55         -0-       6,554
  Federal Reserve and Federal Home Loan Bank Stock          925         -0-         -0-         925
                                                       --------        ----       -----    --------
 
     Total Available-for-Sale Securities                 59,026         524         (47)     59,503
                                                       --------        ----       -----    --------
 
        Total Investment Securities                    $106,972        $925       $(126)   $107,771
                                                       ========        ====       =====    ========
</TABLE>

     In the above schedule the amortized cost of Total Held-to-Maturity
Securities of $47,946,000 and the fair value  of Total Available-for-Sale
Securities of $59,503,000 are reflected in Investment Securities on the
consolidated balance sheet as of March 31, 1998 for a total of $107,449,000.  A
net unrealized gain of $477,000 is included in the Available-for-Sale Investment
Securities balance.  The unrealized gain, net of tax, is included in
Shareholders' Equity.


                                                                              11
<PAGE>
 
NOTE 2 - Investment Securities (cont'd.)
------                                  

     Investment securities with carrying value of $37,712,000 at March 31, 1998,
were pledged to secure federal, state and municipal deposits and for other
purposes as required or permitted by law.  The fair value of these pledged
securities totaled $38,004,000 at March 31, 1998.
<TABLE>
<CAPTION>
                                                             March 31, 1997
                                              ---------------------------------------------
                                                           Gross        Gross
                                              Amortized  Unrealized  Unrealized     Fair
                                                Cost       Gains       Losses       Value
                                              ---------  ----------  -----------  ---------
<S>                                           <C>        <C>         <C>          <C>
 
Investment Securities - Held-to-Maturity
  U.S. Treasury Securities                     $ 26,479        $ 81       $(133)   $ 26,427
  U.S. Government Agencies
   and Corporations                              18,141           3        (166)     17,978
  U.S. Government Agency Mortgage
   Backed Securities                             10,214          60         (55)     10,219
  Obligations of States and
   Political Subdivisions                           597         -0-          (1)        596
                                               --------        ----       -----    --------
 
    Total Held-to-Maturity Securities            55,431         144        (355)     55,220
                                               --------        ----       -----    --------
 
Investment Securities - Available-for-Sale
  U.S.  Treasury Securities                      54,386         135        (246)     54,275
  U.S. Government Agencies
    and Corporations                              3,486          17         -0-       3,503
  U.S. Government Agency Mortgage
    Backed Securities                             2,545          53         -0-       2,598
  Federal Reserve Bank Stock                        254         -0-         -0-         254
                                               --------        ----       -----    --------
 
     Total Available-for-Sale Securities         60,671         205        (246)     60,630
                                               --------        ----       -----    --------
 
        Total Investment Securities            $116,102        $349       $(601)   $115,850
                                               ========        ====       =====    ========
</TABLE>

     In the above schedule the amortized cost of Total Held-to-Maturity
Securities of $55,431,000 and the fair value  of Total Available-for-Sale
Securities of $60,630,000 are reflected in Investment Securities on the
consolidated balance sheet as of March 31, 1997 for a total of $116,061,000.  A
net unrealized loss of $41,000 is included in the Available-for-Sale Investment
Securities balance.  The unrealized loss, net of tax, is included in
Shareholders' Equity.

     There were no sales of investment securities during the first three months
of 1998 or 1997.  However, proceeds from sales were $4,506,000 during the year
1997.  For the year ended December 31, 1997, losses from sales of securities of
$3,000 were realized, but were partially offset by gains of $2,000.


NOTE 3 - Loans and Allowance for Loan Losses
------                                      

     The book values of loans by major type follow (in thousands):
<TABLE>
<CAPTION>
 
                                    March 31,         
                             -------------------------  December 31,
                                1998         1997          1997
                             ----------  -------------  ----------
<S>                          <C>         <C>            <C>
 
Commercial                    $126,722       $112,510    $127,800
Real Estate Mortgage           100,360         77,965      90,638
Real Estate Construction        28,774         15,078      26,290
Loans to Individuals            32,343         27,487      32,003
Less:  Unearned Discount          (567)          (677)       (662)
                              --------       --------    --------
                               287,632        232,363     276,069
Allowance for Loan Losses       (4,192)        (3,327)     (4,065)
                              --------       --------    --------
 
     Loans - Net              $283,440       $229,036    $272,004
                              ========       ========    ========
 
</TABLE>

12
<PAGE>
 
NOTE 3 - Loans and Allowance for Loan Losses (cont'd.)
------                                                

     Transactions in the allowance for loan losses are summarized as follows (in
     thousands):
<TABLE>
<CAPTION>
 
                                                                              
                                               Three Months Ended March 31,     Year Ended
                                               ----------------------------    December 31,
                                                    1998           1997            1997
                                               -------------  -------------    -----------
<S>                                             <C>            <C>              <C>
                                                                            
Balance, Beginning of Period                         $4,065         $2,972         $2,972
Provisions, Charged to Income                           158            155            900
                                                                            
Loans Charged-Off                                       (47)           (19)          (246)
Recoveries of Loans Previously                                              
 Charged-Off                                             16            219            439
                                                     ------         ------         ------
                                                                            
          Net Loans (Charged-Off) Recovered             (31)           200            193
                                                     ------         ------         ------
                                                                            
Balance, End of Period                               $4,192         $3,327         $4,065
                                                     ======         ======         ======
</TABLE>
    The provisions for loan losses charged to operating expenses during the
three months ended March 31, 1998 and March 31, 1997 of $158,000 and $155,000,
respectively, were considered adequate to maintain the allowance in accordance
with the policy discussed in Note 1.  For the year ended December 31, 1997, a
provision of $900,000 was recorded.

    At March 31, 1998, the recorded investment in loans that are considered to
be impaired under Statement of Financial Accounting Standards No. 114 was
$1,103,000 (of which $ 1,103,000 were on non-accrual status).  The related
allowance for loan losses for these loans was $598,000.  The average recorded
investment in impaired loans during the three months ended March 31, 1998 was
approximately $1,429,000.  For this period the Corporation recognized no
interest income on these impaired loans.


NOTE 4 - Premises and Equipment
------                         

    The investment in premises and equipment stated at cost and net of
accumulated amortization and depreciation is as follows (in thousands):
<TABLE>
<CAPTION>
                                                           March 31,        
                                                    -----------------------  December 31,
                                                      1998         1997          1997
                                                    ---------  ------------    --------
<S>                                                 <C>        <C>             <C>
                                                                           
Land                                                  $ 1,446       $ 1,446     $ 1,446
Buildings and Improvements                              7,526         7,431       7,532
Furniture & Equipment                                   6,693         5,249       6,661
                                                      -------       -------     -------
                                                                           
    Total Cost                                         15,665        14,126      15,639
Less:  Accumulated Amortization and Depreciation        7,808         7,094       7,723
                                                      -------       -------     -------
                                                                           
    Net Book Value                                    $ 7,857       $ 7,032     $ 7,916
                                                      =======       =======     =======
 
</TABLE>
NOTE 5 - Other Real Estate
------                    

    The carrying value of other real estate is as follows (in thousands):
<TABLE>
<CAPTION>
 
 
                                     March 31,         
                             -------------------------   December 31,
                                1998         1997           1997
                             ----------  -------------     ------
<S>                          <C>         <C>               <C>
                                                      
Other Real Estate                $ 185          $ 198      $ 185
Valuation Reserve                  (34)           (35)       (34)
                                 -----          -----      -----
                                                      
    Net Other Real Estate        $ 151          $ 163      $ 151
                                 =====          =====      =====
</TABLE>

                                                                              13
<PAGE>
 
NOTE 5 - Other Real Estate (cont'd.)
------                              

    Transactions in the valuation reserve are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
 
                                                               
                                Three Months Ended March 31,      Year Ended
                                ----------------------------     December 31,
                                   1998            1997             1997
                                -----------     ------------      ----------
<S>                        <C>          <C>           <C>  
                                                           
Balance, Beginning of Period          $  34            $  35           $  35
Provisions Charged to Income            -0-              -0-             -0-
Reductions from Sales                   -0-              -0-               1
                                      -----            -----           -----
                                                           
Balance, End of Period                $  34            $  35           $  34
                                      =====            =====           =====
 
</TABLE>

    There were no direct writedowns of other real estate charged to income for
the three months ended March 31, 1998; however there was $3,000 for the three
months ended March 31, 1997 and $4,000 for the year ended December 31, 1997.


NOTE 6 - Deposits
------           

    The book values of deposits by major type follow (in thousands):
<TABLE>
<CAPTION>
 
                                                    March 31,             
                                              -------------------------    December 31,
                                                1998           1997           1997
                                              ---------    ------------     ---------
<S>                                           <C>          <C>              <C>
                                                                         
Noninterest-Bearing Demand Deposits            $114,454        $ 97,970      $126,398
                                               --------        --------      --------
Interest-Bearing Deposits:                                               
 Interest-Bearing Transaction                                            
     Accounts and Money Market Funds            142,351         130,291       133,139
 Savings                                         72,431          51,722        54,107
 Savings Certificates - Time                     51,774          46,926        51,685
 Certificates of Deposits $100,000 or more       36,328          27,044        35,690
 Other                                            1,005             505           705
                                               --------        --------      --------
   Total                                        303,889         256,488       275,326
                                               --------        --------      --------
       Total Deposits                          $418,343        $354,458      $401,724
                                               ========        ========      ========
 
</TABLE>
NOTE 7 - Securities Sold Under Repurchase Agreements
------                                              

  Securities sold under repurchase agreements generally represent borrowings
with maturities ranging from one to thirty days. Information relating to these
borrowings is summarized as follows (in thousands):
<TABLE>
<CAPTION>
 
                                                                                           
                                                Three Months Ended March 31,    Year Ended 
                                                -----------------------------  December 31,
                                                      1998            1997         1997
                                                ---------------  -------------  -----------
<S>                                             <C>              <C>            <C>
                                                     
Securities Sold Under Repurchase Agreements:         
    Average                                            $14,201        $12,355      $11,668
    Period-End                                          12,138         10,687       14,689
    Maximum Month-End Balance During Period             15,249         13,212       15,263
Interest Rate                                        
    Average                                               4.66%          4.29%        4.45%
    Period-End                                            4.56           4.34         4.55
 
</TABLE>


14
<PAGE>
 
NOTE 8 - Other Non-Interest Expense
------                             

    The significant components of other non-interest expense are as follows (in
thousands):
<TABLE>
<CAPTION>
                                   Three Months Ended March 31,    Year Ended
                                   ----------------------------   December 31,
                                        1998          1997           1997
                                   -------------  ------------    ----------
<S>                                <C>            <C>             <C>
Business Development                       $ 144         $ 101        $  588
Legal and Professional Fees                  131           109           496
Printing and Supplies                         95            77           373
Regulatory Fees and Assessments               40            42           160
Other                                        524           365         1,547
                                           -----         -----        ------
                                                              
  Total                                    $ 934         $ 694        $3,164
                                           =====         =====        ======
</TABLE>
NOTE 9 - Income Taxes
------               

  Federal income taxes included in the consolidated balance sheets were as
follows (in thousands):
<TABLE>
<CAPTION>
 
                                             March 31,        
                                     ------------------------  December 31,
                                        1998         1997         1997
                                     ----------  ------------  -----------
<S>                                  <C>         <C>            <C>
Current Tax Asset (Liability)            $(963)         $(875)  $  (7)
Deferred Tax Asset                         635            600     672
                                         -----          -----   -----
 
  Total Included in Other Assets/
     (Other Liabilities)                 $(328)         $(275)  $ 665
                                         =====          =====   =====
</TABLE>
  The deferred tax asset at March 31, 1998 of $635,000 included $162,000 related
to unrealized gains on Available-for-Sale Securities.

  The components of income tax expense were as follows (in thousands):
<TABLE>
<CAPTION>
                                                                        
                                        Three Months Ended March 31,    Year Ended
                                       ------------------------------  December 31,
                                            1998            1997           1997
                                       ---------------  -------------  -------------
<S>                                    <C>              <C>            <C>
Federal Income Tax Expense
 Current                                       $1,063          $ 885         $3,911
 Deferred                                         (97)           (10)          (233)
                                               ------          -----         ------
 
   Total Federal Income Tax Expense            $  966          $ 875         $3,678
                                               ======          =====         ======
 
   Effective Tax Rates                           34.1%          34.4%          34.3%
                                               ======          =====         ======
</TABLE>
  The reasons for the difference between income tax expense and the amount
computed by applying the statutory federal income tax rate to operating earnings
are as follows (in thousands):
<TABLE>
<CAPTION>
 
                                                                        
                                         Three Months Ended March 31,    Year Ended
                                        ------------------------------  December 31,
                                             1998            1997           1997
                                        --------------  --------------  -------------
<S>                                     <C>             <C>             <C>
Federal Income Taxes at Statutory
 Rate of 34%                                    $ 962           $ 866         $3,644
Effect of Tax Exempt Interest Income               (5)             (2)           (12)
Non-deductible Expenses                            10              10             47
Other                                              (1)              1             (1)
                                                -----           -----         ------
 
 Income Taxes Per Income Statement              $ 966           $ 875         $3,678
                                                =====           =====         ======
 
</TABLE>
                                                                              15
<PAGE>
 
NOTE 10 - Related Party Transactions
-------                             

  The Subsidiary Banks have transactions made in the ordinary course of business
with certain of its officers, directors and their affiliates.  All loans
included in such transactions are made on substantially the same terms,
including interest rate and collateral, as those prevailing at the time for
comparable transactions with other persons.  Total loans outstanding to such
parties amounted to approximately $3,443,000 at December 31, 1997.


NOTE 11 - Commitments and Contingent Liabilities
-------                                         

  In the normal course of business, there are various outstanding commitments
and contingent liabilities, such as guarantees and commitments to extend credit,
which are not reflected in the financial statements.  No losses are anticipated
as a result of these transactions.  Commitments are most frequently extended for
real estate, commercial and industrial loans.

  At  March 31, 1998, outstanding documentary and standby letters of credit
totaled $5,152,000 and commitments to extend credit totaled $94,074,000.


NOTE 12 - Stock Option Plans
-------                     

  The Corporation has two Incentive Stock Option Plans, the 1993 Plan and the
1997 Plan, ("the Plans").  Each Plan has reserved 600,000 shares (adjusted for
two-for-one stock splits in 1993, 1995 and 1997) of common stock for grants
thereunder.  The Plans provide for the granting to executive management and
other key employees of Summit Bancshares, Inc. and subsidiaries incentive stock
options, as defined under the current tax law.  The options under the Plans will
be exercisable for ten years from the date of grant and generally vest ratably
over a five year period.  Options will be and have been granted at prices which
will not be less than 100-110% of the fair market value of the underlying common
stock at the date of grant.

   The Corporation applies APB Opinion No. 25 and related Interpretations in
accounting for its plans.  Since the option prices are considered to approximate
fair market value at date of grant, no compensation expense has been reported.
Had compensation cost for these plans been determined consistent with Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" the Corporation's net income and earnings per share would have
been reduced by insignificant amounts on a proforma basis for the year ended
December 31, 1997, or the three months ended March 31, 1998.

 The following is a summary of transactions during the periods presented:
<TABLE>
<CAPTION>
 
                                             Shares Under Option
                                     ------------------------------------
                                       Three Months
                                          Ended            Year Ended
                                     March  31, 1998   December 31, 1997
                                     ----------------  ------------------
<S>                                  <C>               <C>
 
Outstanding, Beginning of Period             543,112             464,100
Additional Options Granted During
  the Period                                   3,000             118,752
Forfeited During the Period                      -0-              (4,480)
Exercised During the Period                  (43,062)            (35,260)
                                             -------             -------
 
  Outstanding, End of Period                 503,050             543,112
                                             =======             =======
</TABLE>

     Options outstanding at March 31, 1998 ranged in price from $3.00 to $19.25
per share with a weighted average exercise price of $4.95 and 339,978 shares
exercisable.  At March 31, 1998, there remained 527,900 shares reserved for
future grants of options under the 1997 Plan.


NOTE 13 - Employee Benefit Plans
-------                         

Pension Plan
------------

     The Corporation has a defined benefit pension plan covering substantially
all of its employees.  The benefits are based on years of service and the
employee's compensation history.  The employee's compensation used in the
benefit calculation is the highest average for any five consecutive years of
employment within the employee's last ten years of employment.

     Funding for the plan is provided by employer contributions to trust funds
in amounts determined by actuarial assumptions and valuation of the plan.
Contributions are intended to provide not only for benefits attributed to
service to date but also for those expected to be earned in the future.


16
<PAGE>
 
NOTE 13 - Employee Benefit Plans (cont'd.)
-------                                   

     The table below sets forth the plan's funded status and amounts recognized
in the Corporation's consolidated balance sheets at December 31 (in thousands):
<TABLE>
<CAPTION>
 
                                                                            1997      1996
                                                                          --------  --------
<S>                                                                       <C>       <C>
 
Actuarial present value of benefit obligations:
 Accumulated benefit obligation, including vested
  benefits of $2,240,000 in 1997 and $1,647,000 in 1996                    $2,420    $1,762
                                                                           ======    ======
 
Projected benefit obligation for service rendered
 to date                                                                   $3,035    $1,997
Plan assets at fair value, primarily listed stocks
 and U.S. bonds                                                             2,883     2,192
                                                                           ------    ------
 
Plan assets in excess of (less than) projected benefit obligation            (152)      195
Unrecognized net loss from past experience
 different from that assumed and effect of
 changes in assumptions                                                       396        21
Prior service cost not yet recognized in net
 periodic pension cost                                                        (12)       15
                                                                           ------    ------
 
Net pension cost included in other assets/(other liabilities)              $  232    $  231
                                                                           ======    ======
 
Prepaid pension cost included the following components (in thousands):
                                                                        Year Ended December 31,
                                                                        -----------------------
                                                                           1997          1996
                                                                        ----------  -----------
 
Service Cost - benefits earned during the period                           $  227    $  195
Interest cost on projected benefit obligation                                 157       131
Less: Actual return on plan assets                                           (196)     (153)
Net amortization and deferral                                                   5        (2)
                                                                           ------    ------
 
   Net periodic pension cost                                               $  193    $  171
                                                                           ======    ======
</TABLE>

     The discount rate and rate of increase in future compensation levels used
in determining the actuarial present value of the projected benefit obligation
were 7 percent and 6 percent, respectively.  The expected long-term rate of
return on plan assets was 7 percent.

     The market value of plan assets at March 31, 1998 was $1,895,000.  There
has not been a contribution to the plan during 1998.  Prepaid pension cost at
March 31, 1998 was $398,000.

401(k) Plan
-----------

     The Corporation implemented a 401(k) plan in December 1997 covering
substantially all employees.  The Corporation did not match the employee's
contributions in 1997.

Management Security Plan
------------------------

     In 1992, the Corporation established a Management Security Plan to provide
key employees with retirement, death or disability benefits in addition to those
provided by the Pension Plan.  The expense charged to operations for such future
obligations was $55,000 and $73,000 during the first three months of 1998 and
1997, respectively, and $276,000 for the year 1997.

Other Post Retirement Benefits
------------------------------

     The Corporation provides certain health care benefits for certain retired
employees who bear all costs of these benefits. These benefits are covered under
the "Consolidated Omnibus Budget Reconciliation Act" (COBRA).


                                                                              17
<PAGE>
 
NOTE 14 - Earnings per Share
-------                     

     The following data shows the amounts used in computing earnings per share
and the weighted average number of shares of dilutive potential common stock.
The number of shares used in the calculations reflect a two-for-one stock split
in December 1997 (dollars in thousands)
<TABLE>
<CAPTION>
 
                                             March 31,         
                                     ------------------------  December 31,
                                        1998         1997         1997
                                     ----------  ------------  ----------
<S>                                  <C>         <C>           <C>
 
Net income                           $    1,864    $    1,672  $    7,040
                                     ==========    ==========  ==========
Weighted average number of common
 shares used in Basic EPS             6,504,173     6,468,848   6,478,795
Effect of dilutive stock options        348,946       292,334     321,081
                                     ----------    ----------  ----------
Weighted number of common shares
 and dilutive potential common
 stock used in Diluted EPS            6,853,119     6,761,182   6,799,876
                                     ==========    ==========  ==========
 
</TABLE>

NOTE 15 - Financial Instruments with Off-Balance Sheet Risk
-------                                                    

  The Corporation is a party to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers.  These financial instruments include loan commitments, standby
letters of credit and documentary letters of credit.  The instruments involve,
to varying degrees, elements of credit and interest rate risk in excess of the
amount recognized in the financial statements.

  The Corporation's exposure to credit loss in the event of non-performance by
the other party of these loan commitments and standby letters of credit is
represented by the contractual amount of those instruments.  The Corporation
uses the same credit policies in making commitments and conditional obligations
as it does for on-balance sheet instruments.

  The total contractual amounts of financial instruments with off-balance sheet
risk are as follows (in thousands):
<TABLE>
<CAPTION>
 
                                         March 31,
                                     ------------------
                                       1998      1997
                                     --------  --------
<S>                                  <C>       <C>
 
Financial Instruments Whose
  Contract Amounts Represent
     Credit Risk:
     Commitments to Extend Credit     $94,074   $78,861
     Documentary and Standby
       Letters of Credit                5,152     4,624
</TABLE>

    Since many of the loan commitments may expire without being drawn upon, the
total commitment amount does not necessarily represent future cash requirements.
The Corporation evaluates each customer's credit worthiness on a case-by-case
basis.  The amount of collateral obtained, if deemed necessary by the
Corporation upon extension of credit, is based on management's credit evaluation
of the counterparty.  Collateral held varies but may include accounts
receivable, inventory, property, plant and equipment, owner occupied real estate
and income-producing commercial properties.

    The credit risk involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to customers.


NOTE 16 - Concentrations of Credit Risk
-------                                

    The Subsidiary Banks  grant commercial, consumer and real estate loans in
their direct market  which is defined as Fort Worth and its surrounding area.
The Board of Directors of each Subsidiary Bank monitors concentrations of credit
by purpose, collateral and industry at least quarterly.  Certain limitations for
concentration are set by the Boards.  Additional loans in excess of these limits
must have prior approval of the bank's directors' loan committee.  Although its
Subsidiary Banks have diversified loan portfolios, a substantial portion of its
debtors' abilities to honor their contracts is dependent upon the strength of
the local and state economy.


18
<PAGE>
 
NOTE 17 - Litigation
-------             

    Certain of the Subsidiary Banks are involved in legal actions arising in the
ordinary course of business.  It is the opinion of management, after reviewing
such actions with outside legal counsel, that the settlement of these matters
will not materially affect the Corporation's financial position.


NOTE 18 - Stock Repurchase Plan
-------                        

    On April 21, 1998, the Board of Directors approved a stock repurchase plan.
The plan authorized management to purchase up to 325,654 shares of the
Corporation's common stock over the next twelve months through the open market
or in privately negotiated transactions in accordance with all applicable state
and federal laws and regulations.

    In the first three months of 1998, 25,000 shares were purchased by the
Corporation through a similar repurchase plan through the open market and
subsequently canceled.


NOTE 19 - Subsequent Event
-------                   

    On April 21, 1998, the Board of Directors of the Corporation approved a
quarterly dividend of $.06 per share to be paid on May 15, 1998 to shareholders
of record on May 1, 1998.


NOTE 20 - Fair Values of Financial Instruments
-------                                       

    The following methods and assumptions were used by the Corporation in
estimating its fair value disclosures for financial instruments:

     Cash and cash equivalents:  The carrying amounts reported in the balance
     sheet for cash and due from banks and federal funds sold approximate those
     assets' fair values.

     Investment securities (including mortgage-backed securities):  Fair values
     for investment securities are based on quoted market prices, where
     available.  If quoted market prices are not available, fair values are
     based on quoted market prices of comparable instruments.

     Loans:  For variable-rate loans, fair values are based on carrying values.
     The fair values for fixed rate loans such as mortgage loans (e.g., one-to-
     four family residential) and installment loans are estimated using
     discounted cash flow analysis.  The carrying amount of accrued interest
     receivable approximates its fair value.

     Deposit liabilities:  The fair value disclosed for interest bearing and
     noninterest-bearing demand deposits, passbook savings, and certain types of
     money market accounts are, by definition, equal to the amount payable on
     demand at the reporting date or their carrying amounts.  Fair values for
     fixed-rate certificates of deposit are estimated using a discounted cash
     flow calculation that applies interest rates currently being offered on
     certificates to a schedule of aggregated expected monthly maturities on
     time deposits.

     Short-term borrowings:  The carrying amounts of borrowings under repurchase
     agreements approximate their fair values.


                                                                              19
<PAGE>
 
NOTE 20 - Fair Values of Financial Instruments (cont'd.)
-------                                                 

     The estimated fair values of the Corporation's financial instruments are as
follows (in thousands):
<TABLE>
<CAPTION>
 
                                                              March 31,
                                              ------------------------------------------
                                                      1998                  1997
                                              --------------------  --------------------
                                              Carrying     Fair     Carrying     Fair
                                               Amount      Value     Amount      Value
                                              ---------  ---------  ---------  ---------
<S>                                           <C>        <C>        <C>        <C>
   Financial Assets
     Cash and due from banks                  $ 25,574   $ 25,574   $ 25,362   $ 25,362
     Federal funds sold                         43,390     43,390     20,545     20,545
     Securities                                107,449    107,771    116,061    115,850
     Loans                                     287,632    287,653    232,363    232,723
     Reserve for loan losses                    (4,192)    (4,192)    (3,327)    (3,327)
 
   Financial Liabilities
     Deposits                                  418,343    418,571    354,458    354,673
     Securities sold under repurchase
      agreements                                12,138     12,139     10,687     10,687
 
   Off-balance Sheet Financial Instruments
     Loan commitments                                      94,074                78,861
     Letters of credit                                      5,152                 4,624
 
</TABLE>
NOTE 21 - Comprehensive Income
-------                       

     The Corporation has adopted Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income".  This new standard requires an entity to report and display
comprehensive income and its components.  Comprehensive income is as follows (in
thousands):
<TABLE>
<CAPTION>
 
                                                For the Three Months Ended March 31,      
                                                -------------------------------------     Year Ended
                                                      1998                1997         December 31, 1997
                                                -----------------  ------------------  -----------------
<S>                                             <C>                <C>                 <C>
 
      Net Income                                           $1,864             $1,672              $7,040
      Other Comprehensive Income:
        Unrealized gain (loss) on securities
        available-for-sale, net of tax                         71               (255)                 15
                                                           ------             ------              ------
 
          Comprehensive Income                             $1,935             $1,417              $7,055
                                                           ======             ======              ======
</TABLE>

20
<PAGE>
 
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

Summary
-------

     Net income for the first quarter of 1998 was $1,864,000, or $.27 diluted
earnings per share, compared with $1,672,000, or $.25 diluted earnings per
share, for the first quarter of 1997.  Per share amounts are based on average
shares outstanding of 6,504,173 for the first quarter of 1998 and 6,468,848 for
the comparable period of 1997 adjusted to 6,853,119 and 6,761,182, respectively
to reflect stock options granted.  Also, shares outstanding reflect a two-for-
one stock split in December 1997.  On a per share basis, diluted net income
increased 8.0% over the first quarter of the prior year.

     Outstanding loans at March 31, 1998 of $287.6 million represented an
increase of $55.3 million, or 23.8%, over March 31, 1997 and an increase of
$13.6 million, or 4.9%, from December 31, 1997.

     Total deposits at March 31, 1998 of $418.3 million represented an increase
of $63.9 million, or 18.0%, over March 31, 1997 and an increase of $16.6
million, or 4.1%, from December 31, 1997.
 
     In the first quarter, net interest income increased 17.6% over the previous
year.  An increase in non-interest expense of 23.2% partially offset the
increase in net interest income.

     The following table summarizes the Corporation's performance for the three
months ended March 31, 1998 and 1997 (tax equivalent basis and dollars in
thousands).

                                          Three Months Ended
                                               March 31,
                                       ------------------------
                                          1998          1997
                                       ----------    ----------
<TABLE>
<CAPTION>
 
 
<S>                                       <C>         <C>
Interest Income                            $8,881      $7,330
Interest Expense                            3,249       2,540
                                           ------      ------
                                                   
 Net Interest Income                        5,632       4,790
Provision for Loan Loss                       158         155
                                           ------      ------
                                                   
 Net Interest Income After                         
   Provision for Loan Loss                  5,474       4,635
Non-Interest Income                           870         762
Non-Interest Expense                        3,506       2,846
                                           ------      ------
                                                   
 Income Before Income Tax                   2,838       2,551
Income Tax Expense                            974         879
                                           ------      ------
                                                   
   Net Income                              $1,864      $1,672
                                           ======      ======
                                                   
Net Income per Share -                             
 Basic                                     $  .29      $  .26
 Diluted                                      .27         .25
                                                   
Return on Average Assets                     1.65%       1.74%
                                                   
Return on Average Shareholders' Equity      18.18%      18.99%
 
</TABLE>


                                                                              21
<PAGE>
 
Summary of Earning Assets and Interest-Bearing Liabilities
----------------------------------------------------------

  The following schedule presents average balance sheets that highlight earning
assets and interest-bearing liabilities and their related rates earned and paid
for the first quarter of 1998 and 1997 (rates on tax equivalent basis).
<TABLE>
<CAPTION>
 
 
                                                              Three Months ended March 31,
                                          --------------------------------------------------------------------
                                                        1998                               1997
                                          ---------------------------------  ---------------------------------
                                           Average                Average     Average                Average
                                           Balances   Interest  Yield/Rate    Balances   Interest  Yield/Rate
                                          ----------  --------  -----------  ----------  --------  -----------
                                                                 (Dollars in Thousands)
<S>                                       <C>         <C>       <C>          <C>         <C>       <C>
Earning Assets:
  Federal Funds Sold                       $ 41,105     $  559        5.52%   $ 15,321     $  203        5.31%
  Investment Securities (Taxable)           106,387      1,623        6.19     115,273      1,736        6.11
  Investment Securities (Tax-exempt)          1,141         20        7.11         228          4        6.68
  Loans, Net of Unearned Discount/(1)/      277,001      6,679        9.78     226,677      5,387        9.64
                                           --------     ------                --------     ------
    Total Earning Assets                    425,634      8,881        8.46     357,499      7,330        8.32
                                                        ------                             ------
 
Non-interest Earning Assets:
  Cash and Due From Banks                    22,355                             22,652
  Other Assets                               15,475                             12,903
  Allowance for Loan Losses                  (4,141)                            (3,132)
                                           --------                           --------
    Total Assets                           $459,323                           $389,922
                                           ========                           ========
 
Interest-Bearing Liabilities:
  Interest-Bearing Transaction
    Accounts and Money Market Funds        $136,772      1,215        3.60    $122,616      1,036        3.42
  Savings                                    66,082        728        4.47      50,347        497        4.00
  Savings Certificates                       51,667        648        5.09      47,109        556        4.79
  Certificates of Deposit
    $100,000 or more                         36,765        482        5.32      26,051        321        5.00
  Other Time                                    905         13        5.70         509          5        3.86
  Other Borrowings                           14,201        163        4.66      12,838        125        4.09
                                           --------     ------                --------     ------
    Total Interest-Bearing Liabilities      306,392      3,249        4.30     259,470      2,540        3.97
                                                        ------                             ------
 
Non-interest Bearing Liabilities:
  Demand Deposits                           109,092                             92,605
  Other Liabilities                           2,253                              2,149
  Shareholders' Equity                       41,586                             35,698
                                           --------                           --------
    Total Liabilities and
      Shareholders' Equity                 $459,323                           $389,922
                                           ========                           ========
 
Net Interest Income and Margin
 (Tax-equivalent Basis)/(2)/                            $5,632        5.37                 $4,790        5.43
                                                        ======                             ======
 
</TABLE>
(1)  Loan interest income includes fees and loan volumes include loans on non-
     accrual.
(2)  Presented on a tax equivalent basis ("T/E") using a federal income tax rate
     of 34% in both years.

22
<PAGE>
 
Net Interest Income
-------------------

    Net interest income (tax equivalent) for the first quarter of 1998 was
$5,632,000 which represented an increase of $842,000, or 17.6%, over the first
quarter of 1997.  This increase was heavily contributed to by a 22.2% increase
in average loans for the first quarter of 1998 versus the same quarter last
year.

    The following table summarizes the effects of changes in interest rates,
average volumes of earning assets and interest bearing liabilities on net
interest income ( tax equivalent) for the periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>
 
                                                  ANALYSIS OF CHANGES IN NET INTEREST INCOME
                                                           (Dollars in Thousands)

                                       1st Qtr. 1998 vs. 1st Qtr. 1997     1st Qtr. 1997 vs. 1st Qtr. 1996
                                             Increase (Decrease)                 Increase (Decrease)
                                              Due to Changes in:                  Due to Changes in:
                                       --------------------------------   ---------------------------------
                                         Volume       Rate      Total       Volume       Rate       Total
                                       ----------   --------  ---------   ----------   --------   ---------
<S>                                    <C>          <C>       <C>         <C>          <C>        <C>
Interest Earning Assets:
 Federal Funds Sold                        $  348       $  8     $  356       $  (68)      $ (6)       $(74)
 Investment Securities (Taxable)             (254)       141       (113)        (186)       133         (53)
 Investment Securities (Tax-exempt)            16        -0-         16            7         (5)          2
 Loans, Net of Unearned Discount            1,212         80      1,292        1,047        (96)        951
                                           ------       ----     ------       ------       ----        ----
 
 Total Interest Income                      1,322        229      1,551          800         26         826
                                           ------       ----     ------       ------       ----        ----
 
Interest-Bearing Liabilities:
 Deposits                                     471        200        671          169        -0-         169
 Other Borrowings                              16         22         38           50        (42)          8
                                           ------       ----     ------       ------       ----        ----
 
 Total Interest Expense                       487        222        709          219        (42)        177
                                           ------       ----     ------       ------       ----        ----

Net Interest Income                      $    835    $     7   $    842     $    581      $  68       $ 649
                                           ======       ====     ======       ======       ====        ====

</TABLE> 

Provision for Loan Losses and Non-Performing Assets
---------------------------------------------------

  The Corporation's provision for loan losses was $4,192,000, or 1.46% of total
loans, as of March 31, 1998 compared to $3,327,000, or 1.43% of total loans, as
of March 31, 1997.

 Transactions in the provision for loan losses are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
 
                                                  Three Months Ended
                                                      March 31,
                                                 --------------------
                                                   1998       1997
                                                 ---------  ---------
<S>                                              <C>        <C>
 
Balance, Beginning of Period                       $4,065     $2,972
Provisions, Charged to Income                         158        155
 
Loans Charged-Off                                     (47)       (19)
Recoveries of Loans Previously
    Charged-Off                                        16        219
                                                   ------     ------
            Net Loans (Charged-Off) Recovered         (31)       200
                                                   ------     ------
 
Balance, End of Period                             $4,192     $3,327
                                                   ======     ======
</TABLE>


                                                                              23
<PAGE>
 
   The following table summarizes the non-performing assets as of the end of the
last five quarters (in thousands).
<TABLE>
<CAPTION>
                                 March 31,  December 31,  September 30,  June 30,  March 31,
                                   1998         1997          1997         1997      1997
                                 ---------  ------------  -------------  --------  ---------
<S>                              <C>        <C>           <C>            <C>       <C>
Non-Accrual Loans                   $2,885        $2,112         $1,245    $  901     $1,005
Other Real Estate Owned                151           151            151       151        163
                                    ------        ------         ------    ------     ------
 
  Total Non-Performing Assets       $3,036        $2,263         $1,396    $1,052     $1,168
                                    ======        ======         ======    ======     ======
</TABLE>
     Non-accrual loans to total loans were 1.00% at March 31, 1998 and non-
performing assets were 1.06% of loans and other real estate owned at the same
date.

Non-interest Income
-------------------

     The major component of non-interest income is service charges on deposits.
Other service fees are the majority of other non-interest income.

     The following table reflects the changes in non-interest income during the
periods presented (dollars in thousands).
<TABLE>
<CAPTION>
                                       Three Months Ended March 31,
                                       -----------------------------
                                        1998     1997     % Change
                                       -------  -------  -----------
<S>                                    <C>      <C>      <C>
Service Charges on Deposit Accounts      $ 486    $ 437        11.2%
Non-recurring Income                        66       53        24.5
Other Non-interest Income                  318      272        16.9
                                         -----    -----
 
  Total Non-interest Income              $ 870    $ 762        14.2
                                         =====    =====
</TABLE>
    Non-recurring income is primarily interest recovered on loans charged-off in
prior years and gains on sales of assets taken in satisfaction of debt in prior
years.

Non-interest Expense
--------------------

     Non-interest expenses include all expenses other than interest expense,
provision for loan losses and income tax expense.

     The following table summarizes the changes in non-interest expense during
the periods presented (dollars in thousands).
<TABLE>
<CAPTION>
                                    Three Months Ended March 31,
                                   -------------------------------
                                     1998       1997     % Change
                                   ---------  ---------  ---------
<S>                                <C>        <C>        <C>
Salaries & Employee Benefits         $2,041     $1,747       16.8%
Occupancy Expense - Net                 239        197       21.3
Furniture and Equipment Expense         295        211       39.8
Other Real Estate Expense - Net          (3)        (3)        --
Other Expenses:
 Business Development                   144        101       42.6
 Insurance - Other                       25         27       (7.4)
 Legal & Professional Fees              131        109       20.2
 Taxes - Other                           85         28      203.6
 Postage & Courier                       72         68        5.9
 Printing & Supplies                     95         77       23.4
 Regulatory Fees & Assessments           40         42       (4.8)
 Other Operating Expenses               342        242       41.3
                                     ------     ------      -----
 
   Total Other Expenses                 934        694       34.6
                                     ------     ------      -----
 
   Total Non-interest Expense        $3,506     $2,846      23.2 %
                                     ======     ======      =====
</TABLE>
  Total non-interest expense increased 23.2% in the first quarter of 1998 over
1997, reflecting increases in salaries and benefits, occupancy expense,
furniture and equipment expenses, business development, legal and professional
expense, taxes-other, printing and supplies and other operating expenses.  As a
percent of average assets, non-interest expenses were 3.10% in the first quarter
of 1998 and 2.92% in the same period of 1997.  The "efficiency ratio" (non-
interest expenses divided by total non-interest income plus net interest income)
was 53.97% for the first quarter of 1998.  These measures of operating
efficiency compare very favorably to other financial institutions in the
Corporation's peer group.

24
<PAGE>
 
  The increase in salaries and employee benefits for the first quarter of 1998
is due to salary merit increases, incentive compensation accrual increases, and
an increase in pension plan expense.  Also, the average number of full-time
equivalent employees increased by 25.5 to an average full-time equivalent of
162.5 from the number twelve months prior.  This increase in number of employees
reflects the opening of a new banking office in 1997 in addition to the adding
of several lending officers in 1997.

  The increase in occupancy expense is primarily due to increased repairs and
increased property taxes.

  The increase in furniture and equipment expense is primarily a result of
increased depreciation for new technology related equipment acquired in the last
half of 1997.

 Increased business development expenses are a result of increased advertising
expenses.

  Legal and professional fees increased due to increased legal fees related to
substandard loans and increased audit fees.

  Taxes-other increased due to increased state franchise taxes paid on higher
levels of taxable capital.

  Printing and supplies expenses increased primarily due to expenses related to
new customer services such as debit card.

  Other operating expenses increased in the first quarter of 1998 due to
increases in various miscellaneous operating costs.

Interest Rate Sensitivity
-------------------------

    Interest rate sensitivity is the relationship between changes in market
interest rates and net interest income due to the repricing characteristics of
assets and liabilities.

    The following table, commonly referred to as a "static gap report",
indicates the interest rate sensitivity position at March 31, 1998 and may not
be reflective of positions in subsequent periods (dollars in thousands):
<TABLE>
<CAPTION>
 
                                                                                 
                                                                          Total        Repriced  
                                    Matures or Reprices within:            Rate          After   
                                  --------------------------------       Sensitive     1 Year or  
                                    30 Days     31-180     181 to        One Year    Non-interest
                                    or Less     Days      One Year       or Less      Sensitive       Total
                                   ---------  ---------   ---------     ---------     ----------    ---------
<S>                               <C>         <C>         <C>          <C>           <C>           <C>
Earning Assets:
  Loans                            $163,950     $15,255    $ 15,808      $195,013     $ 92,619      $287,632
  Investment Securities               7,283      14,643      23,078        45,004       62,445       107,449
  Federal Funds Sold                 43,390         -0-         -0-        43,390          -0-        43,390
                                   --------     -------    --------      --------     --------      --------
 
   Total Earning Assets             214,623      29,898      38,886       283,407      155,064       438,471
                                   --------     -------    --------      --------     --------      --------
 
Interest Bearing Liabilities:
  Interest-Bearing Transaction
    Accounts and Savings            214,782         -0-         -0-       214,782          -0-       214,782
  Certificate of Deposits
    >$100,000                         9,514      10,836      13,943        34,293        2,035        36,328
  Other Time Deposits                 4,684      20,922      22,219        47,825        4,954        52,779
  Repurchase Agreements              12,138         -0-         -0-        12,138          -0-        12,138
                                   --------     -------    --------      --------     --------      --------
 
   Total Interest Bearing
    Liabilities                     241,118      31,758      36,162       309,038        6,989       316,027
                                   --------     -------    --------      --------     --------      --------
 
Interest Sensitivity
 Gap                               $(26,495)    $(1,860)   $  2,724      $(25,631)    $148,075      $122,444
                                   ========     =======    ========      ========     ========      ========
Cumulative Gap                     $(26,495)   $(28,355)   $(25,631)
                                   ========     =======    ========
 
Cumulative Gap to
 Total Earning Assets                 (6.04%)     (6.47%)     (5.85%)
 
Cumulative Gap to
 Total Assets                         (5.57%)     (5.96%)     (5.39%)
</TABLE>


                                                                              25
<PAGE>
 
    The preceding static gap report reflects a cumulative liability sensitive
position during the one year horizon.  An inherent weakness of this report is
that it ignores the relative volatility any one category may have in relation to
other categories or market rates in general.  For instance, the rate paid on NOW
accounts typically moves slower than the three month T-Bill.  Management
attempts to capture this relative volatility by utilizing a simulation model
with a "beta factor" adjustment which estimates the volatility of rate sensitive
assets and/or liabilities in relation to other market rates.

    Beta factors are an estimation of the long term, multiple interest rate
environment relation between an individual account and market rates in general.
For instance, NOW, savings and money market accounts, which are repriceable
within 30 days will have considerably lower beta factors than variable rate
loans and most investment categories.  Taking this into consideration, it is
quite possible for a bank with a negative cumulative gap to total asset ratio to
have a positive "beta adjusted" gap risk position.

    As a result of applying the beta factors established by management to the
earning assets and interest bearing liabilities in the static gap report via a
simulation model, the negative cumulative gap to total assets ratio at one year
of (5.4%) was reversed to a positive 16.1% "beta adjusted" gap position.

    Management feels that the "beta adjusted" gap risk technique more accurately
reflects the Corporation's gap position.

Capital
-------

    The Federal Reserve Board has guidelines for capital to total assets
(leverage) and capital standards for bank holding companies.  The Comptroller of
the Currency also has similar guidelines for national banks.  These guidelines
require a minimum level of Tier I capital to total assets of 3 percent.  A
banking organization operating at or near these levels is expected to have well-
diversified risk, excellent asset quality, high liquidity, good earnings and in
general be considered a strong banking organization. Organizations not meeting
these characteristics are expected to operate well above these minimum capital
standards.  Thus, for all but the most highly rated organizations, the minimum
Tier I leverage ratio is to be 3 percent plus minimum additional cushions of at
least 100 to 200 basis points.  At the discretion of the regulatory authorities,
additional capital may be required.

    At March 31, 1998, total capital to total assets was 8.8%.

    The Federal Reserve Board and Comptroller of the Currency also have risk-
adjusted capital adequacy guidelines.  Capital under these new guidelines is
defined as Tier I and Tier II.  At Summit Bancshares, Inc. the only components
of Tier I and Tier II capital are shareholders' equity and a portion of the
allowance for loan losses, respectively.

    The guidelines also stipulate that four categories of risk weights (0, 20,
50 and 100 percent), primarily based on the relative credit risk of the
counterparty,  be applied to the different types of balance sheet assets.  Risk
weights for all off-balance sheet exposures are determined by a two-step process
whereby the face value of the off-balance sheet item is converted to a "credit
equivalent amount" and that amount is assigned to the appropriate risk category.

    The regulatory minimum ratio for total qualifying capital is 8.00% of which
4.00% must be Tier I capital.  At March 31, 1998, the Corporation's Tier I
capital represented 13.44% of risk weighted assets and total qualifying capital
(Tier I and Tier II) represented 14.69% of risk weighted assets.  Both ratios
are well above current regulatory guidelines.

26

<PAGE>
 
                          PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

          Not applicable

Item 2.   Change in Securities

          Not applicable

Item 3.   Defaults Upon Senior Securities

          Not applicable

Item 4.   Submission of Matters to a Vote of Security Holders

          Not applicable

Item 5.   Other Information

          Not applicable

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

          27   Financial Data Schedule

          (b)  No Reports on Form 8-K were filed during the period ending
               March 31, 1998

                                                                              27
<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: May 4, 1998                    By: /s/  Philip E. Norwood
     --------------------               ---------------------------------------
                                        Philip E. Norwood, Chairman
                                  
Date: May 4, 1998                    By: /s/  Bob G. Scott
     --------------------               ---------------------------------------
                                        Bob G. Scott, Executive Vice President
                                            and Chief Operating Officer

28