<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, 2002 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, 2002 was 6,269,861 shares.


<PAGE>









                             SUMMIT BANCSHARES, INC.



                                      INDEX

<TABLE>
<CAPTION>
         PART I - FINANCIAL INFORMATION                                                 Page No.
<S>                                                                                     <C>


         Item 1.  Financial Statements

                  Consolidated Balance Sheets at March 31, 2002
                  and 2001 and at December 31, 2001                                        4

                  Consolidated Statements of Income for the
                  Three Months Ended March 31, 2002 and 2001
                  and for the Year Ended December 31, 2001                                 5

                  Consolidated Statements of Changes in Shareholders'
                  Equity for the Three Months Ended March 31, 2002
                  and 2001 and for the Year Ended December 31, 2001                        6

                  Consolidated Statements of Cash Flows for the Three
                  Months Ended March 31, 2002 and 2001 and for
                  the Year Ended December 31, 2001                                         7

                  Notes to Consolidated Financial Statements for the Three
                  Months Ended March 31, 2002 and 2001 and for the
                  Year Ended December 31, 2001                                            8-19

         The March 31, 2002 and 2001 and the December 31, 2001 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, 2002 and 2001                                           20-26
</TABLE>



                                       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)
                                                                                    March 31,                      (Unaudited),
                                                                      --------------------------------------       December 31,
                                                                           2002                  2001                  2001
                                                                      ----------------      ----------------      ----------------
ASSETS                                                                                      (In Thousands)
<S>                                                                   <C>                   <C>                   <C>
CASH AND DUE FROM BANKS - NOTE 1                                             $ 23,788              $ 28,494              $ 29,178
FEDERAL FUNDS SOLD & DUE FROM TIME                                              4,246               111,229                 2,284
INVESTMENT SECURITIES - NOTE 2
 Securities Available-for-Sale, at fair value                                 141,479               134,206               160,136
 Securities Held-to-Maturity, at cost (fair value
   of $10,084,000 on March 31, 2001)                                              -0-                10,018                   -0-
LOANS - NOTES 3 AND 11
  Loans, Net of Unearned Discount                                             453,818               387,798               430,754
      Allowance for Loan Losses                                                (6,534)               (5,537)               (6,015)
                                                                      ----------------      ----------------      ----------------
                LOANS, NET                                                    447,284               382,261               424,739

PREMISES AND EQUIPMENT - NOTE 4                                                 8,659                 7,930                 8,131
ACCRUED INCOME RECEIVABLE                                                       3,678                 4,732                 4,411
OTHER REAL ESTATE - NOTE 5                                                        -0-                   283                   -0-
OTHER ASSETS                                                                    5,772                 5,931                 7,077
                                                                      ----------------      ----------------      ----------------

                TOTAL ASSETS                                                $ 634,906             $ 685,084             $ 635,956
                                                                      ================      ================      ================

LIABILITIES AND SHAREHOLDERS' EQUITY

DEPOSITS - NOTE 6
  Noninterest-Bearing Demand                                                $ 151,236             $ 131,995             $ 150,040
  Interest-Bearing                                                            394,685               474,782               393,763
                                                                      ----------------      ----------------      ----------------

                TOTAL DEPOSITS                                                545,921               606,777               543,803

SHORT TERM BORROWINGS - NOTE 7                                                 24,492                16,831                28,366
ACCRUED INTEREST PAYABLE                                                          501                 1,137                   605
OTHER LIABILITIES                                                               2,488                 2,987                 2,646
                                                                      ----------------      ----------------      ----------------

                TOTAL LIABILITIES                                             573,402               627,732               575,420
                                                                      ----------------      ----------------      ----------------

COMMITMENTS AND CONTINGENCIES - NOTES 12, 14, 16 AND 18

SHAREHOLDERS' EQUITY - NOTES 13, 15 AND 19
  Common Stock - $1.25 Par Value; 20,000,000 shares
    authorized; 6,269,861, 6,379,478 and 6,262,961 shares
    issued and outstanding at March 31, 2002 and 2001 and at
    December 31, 2001, respectively                                             7,837                 7,974                 7,829
  Capital Surplus                                                               6,909                 6,730                 6,865
  Retained Earnings                                                            45,683                42,066                44,166
  Accumulated Other Comprehensive Income - Unrealized Gain
    on Available-for-Sale Investment Securities, Net of Tax                     1,171                 1,159                 1,694
  Treasury Stock at Cost (5,000, 30,005 and 1,000 shares at
    March 31, 2002 and 2001, and at December 31, 2001,
    respectively)                                                                 (96)                 (577)                  (18)
                                                                      ----------------      ----------------      ----------------

                TOTAL SHAREHOLDERS' EQUITY                                     61,504                57,352                60,536
                                                                      ----------------      ----------------      ----------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                  $ 634,906             $ 685,084             $ 635,956
                                                                      ================      ================      ================
</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)
                                                                       For the Three Months Ended                (Unaudited)
                                                                                March 31,                         Year Ended
                                                                -------------------------------------            December 31,
                                                                     2002                  2001                      2001
                                                                ---------------       ---------------          ---------------
                                                                            (In Thousands, Except Per Share Data)
<S>                                                             <C>                   <C>                      <C>
INTEREST INCOME
  Interest and Fees on Loans                                           $ 7,664               $ 9,084                 $ 34,548
  Interest and Dividends on Investment Securities:
    Taxable                                                              1,848                 2,145                    7,966
    Exempt from Federal Income Taxes                                        18                     3                       11
  Interest on Federal Funds Sold and Due From Time                          19                   854                    1,972
                                                                ---------------       ---------------          ---------------

               TOTAL INTEREST INCOME                                     9,549                12,086                   44,497
                                                                ---------------       ---------------          ---------------

INTEREST EXPENSE
  Interest on Deposits                                                   1,997                 4,689                   14,967
  Interest on Short Term Borrowings                                        135                   211                      559
  Interest on Note Payable                                                 -0-                   -0-                        1
                                                                ---------------       ---------------          ---------------

               TOTAL INTEREST EXPENSE                                    2,132                 4,900                   15,527
                                                                ---------------       ---------------          ---------------

               NET INTEREST INCOME                                       7,417                 7,186                   28,970

LESS: PROVISION FOR LOAN LOSSES - NOTE 3                                   545                   180                    1,755
                                                                ---------------       ---------------          ---------------

               NET INTEREST INCOME AFTER
               PROVISION FOR LOAN LOSSES                                 6,872                 7,006                   27,215
                                                                ---------------       ---------------          ---------------

NON-INTEREST INCOME
  Service Charges and Fees on Deposits                                     645                   554                    2,400
  Other Income                                                             605                   484                    2,116
                                                                ---------------       ---------------          ---------------

               TOTAL NON-INTEREST INCOME                                 1,250                 1,038                    4,516
                                                                ---------------       ---------------          ---------------

NON-INTEREST EXPENSE
  Salaries and Employee Benefits - NOTE 14                               2,867                 2,539                   10,564
  Occupancy Expense - Net                                                  252                   309                    1,294
  Furniture and Equipment Expense                                          404                   361                    1,472
  Other Real Estate Owned Expense - Net                                     69                    (6)                     224
  Merger Related Expense - NOTE 9                                          -0-                   598                      598
  Other Expense - NOTE 9                                                 1,051                 1,022                    4,113
                                                                ---------------       ---------------          ---------------

               TOTAL NON-INTEREST EXPENSE                                4,643                 4,823                   18,265
                                                                ---------------       ---------------          ---------------

               INCOME BEFORE INCOME TAXES                                3,479                 3,221                   13,466

APPLICABLE INCOME TAXES - NOTE 10                                        1,193                 1,110                    4,664
                                                                ---------------       ---------------          ---------------

               NET INCOME                                              $ 2,286               $ 2,111                  $ 8,802
                                                                ===============       ===============          ===============

               NET INCOME PER SHARE - NOTE 15
                       Basic                                            $ 0.37                $ 0.33                   $ 1.39
                       Diluted                                            0.36                  0.32                     1.36
</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, 2002 AND 2001
                    AND FOR THE YEAR ENDED DECEMBER 31, 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           Accumulated
                                                                                              Other
                                                                                          Comprehensive
                                                                                           Income - Net
                                                                                          Unrealized Gain                  Total
                                    Common Stock                                            (Loss) on                      Share-
                           -------------------------------   Capital       Retained         Investment        Treasury    Holders'
                              Shares         Amount          Surplus       Earnings         Securities         Stock       Equity
-----------------------------------------------------------------------------------------------------------------------------------
                                                        (Dollars in Thousands, Except Per Share Data)
<S>                        <C>             <C>              <C>           <C>           <C>                   <C>         <C>
BALANCE AT

January 1, 2001                6,362,278       $ 7,953       $ 6,678       $ 40,655           $ 285           $  -0-      $ 55,571
Stock Options Exercised           17,200            21            52                                                            73
Purchases of Stock Held
  in Treasury                                                                                                   (577)         (577)
Cash Dividend -
  $.11 Per Share                                                               (700)                                          (700)
Net Income for the
  Three Months Ended
  March 31, 2001                                                              2,111                                          2,111
Securities Available-
  for-Sale Adjustment                                                                           874                            874
                                                                                                                      -------------
    Total Comprehensive
     Income NOTE 22                                                                                                          2,985
                           --------------  ------------   -----------   ------------    ------------    ------------  -------------

BALANCE AT
March 31, 2001                 6,379,478         7,974         6,730         42,066           1,159             (577)       57,352

Stock Options Exercised           21,000            27           135                                                           162
Purchases of Stock Held
  in Treasury                                                                                                 (2,122)       (2,122)
Retirement of Stock Held
  in Treasury                   (137,517)         (172)                      (2,509)                           2,681           -0-
Cash Dividend -
  $.33 Per Share                                                             (2,082)                                        (2,082)
Net Income for the
  Nine Months Ended
   December 31, 2001                                                          6,691                                          6,691
Securities Available-
  for-Sale Adjustment                                                                           535                            535
                                                                                                                      -------------
    Total Comprehensive
     Income NOTE 22                                                                                                          7,226
                           --------------  ------------   -----------   ------------    ------------    ------------  -------------

BALANCE AT
December 31, 2001              6,262,961         7,829         6,865         44,166           1,694              (18)       60,536

Stock Options Exercised            7,900             9            44                                                            53
Purchases of Stock Held
  in Treasury                                                                                                    (96)          (96)
Retirement of Stock Held
  in Treasury                     (1,000)           (1)                         (17)                              18           -0-
Cash Dividend -
  $.12 Per Share                                                               (752)                                          (752)
Net Income for the
  Three Months Ended
  March 31, 2002                                                              2,286                                          2,286
Securities Available-
  for-Sale Adjustment                                                                          (523)                          (523)
                                                                                                                      -------------
    Total Comprehensive
     Income NOTE 22                                                                                                          1,763
                           --------------  ------------   -----------   ------------    ------------    ------------  -------------

BALANCE AT
March 31, 2002                 6,269,861       $ 7,837       $ 6,909       $ 45,683         $ 1,171           $  (96)     $ 61,504
                           ==============  ============   ===========   ============    ============    ============  =============
</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, 2002 AND 2001
                    AND FOR THE YEAR ENDED DECEMBER 31, 2001

<TABLE>
<CAPTION>

                                                                                      (Unaudited)
                                                                              For the Three Months Ended             (Unaudited)
                                                                                        March 31,                     Year Ended
                                                                        ---------------------------------------      December 31,
                                                                              2002                  2001                 2001
                                                                        ------------------    -----------------    -----------------
                                                                                              (In Thousands)
<S>                                                                     <C>                   <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                                             $          2,286      $         2,111      $        8,802
  Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities:
    Depreciation and Amortization                                                     265                  267               1,058
    Net Premium Amortization (Accretion)
      of Investment Securities                                                        210                  (70)                240
    Provision for Loan Losses                                                         545                  180               1,755
    Deferred Income Taxes Benefit                                                    (267)                (127)               (480)
    Writedown of Other Real Estate                                                    -0-                    3                  11
    Writedown of Foreclosed Assets                                                    -0-                  -0-                 300
    Net Gain From Sale of Other Real Estate                                           -0-                  -0-                (308)
    Net Loss From Sale of Premises and Equipment                                        9                  -0-                   1
    Net Decrease (Increase) in Accrued Income and Other Assets                      2,217                1,147                (252)
    Net Increase (Decrease) in Accrued Expenses and
      and Other Liabilities                                                          (262)                 150                (723)
                                                                        ------------------    -----------------    -----------------

      Total Adjustments                                                             2,717                1,550               1,602
                                                                        ------------------    -----------------    -----------------

      NET CASH PROVIDED BY OPERATING ACTIVITIES                                     5,003                3,661              10,404
                                                                        ------------------    -----------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net (Increase) Decrease in Federal Funds Sold
      and Due From Time                                                            (1,962)             (64,768)             44,177
  Proceeds from Matured and Prepaid Investment Securities
   o  Held-to-Maturity                                                                -0-               12,000              15,000
   o  Available-for-Sale                                                           18,262               31,996              85,127
  Proceeds from Sales of Investment Securities                                        -0-                  -0-              60,139
  Purchase of Investment Securities
   o  Available-for-Sale                                                             (609)             (37,179)           (168,860)
  Loans Originated and Principal Repayments, Net                                  (23,103)              (7,858)            (51,670)
  Recoveries of Loans Previously Charged-Off                                           16                   48                 268
  Proceeds from Sale of Premises and Equipment                                         27                  124                 126
  Proceeds from Sale of Other Real Estate & Repossessed Assets                        347                  244                 716
  Purchases of Premises and Equipment                                                (820)                (197)             (1,191)
                                                                        ------------------    -----------------    -----------------

      NET CASH USED BY INVESTING ACTIVITIES                                        (7,842)             (65,590)            (16,168)
                                                                        ------------------    -----------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net Increase in Demand Deposits, Savings
     Accounts and Interest Bearing Transaction Accounts                             8,171               63,457              34,868
  Net Increase (Decrease) in Certificates of Deposit                               (6,053)               3,654             (30,731)
  Net Increase (Decrease) in Short Term Borrowings                                 (3,874)              (3,079)              8,456
  Payments of Cash Dividends                                                         (752)                (700)             (2,782)
  Proceeds from Stock Options Exercised                                                53                   73                 235
  Purchase of Treasury Stock                                                          (96)                (577)             (2,699)
                                                                        ------------------    -----------------    -----------------

       NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                            (2,551)              62,828               7,347
                                                                        ------------------    -----------------    -----------------

NET INCREASE (DECREASE) IN CASH AND
      DUE FROM BANKS                                                               (5,390)                 899               1,583

CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD                                     29,178               27,595              27,595
                                                                        ------------------    -----------------    -----------------

CASH AND DUE FROM BANKS AT END OF PERIOD                                 $         23,788      $        28,494      $       29,178
                                                                        ==================    =================    =================

SUPPLEMENTAL SCHEDULE OF OPERATING AND INVESTING ACTIVITIES

  Interest Paid                                                          $          2,236      $         4,854      $       16,013
  Income Taxes Paid (Refunded)                                                       (444)                 -0-               5,555
  Bank Financed Sales of Other Real Estate                                            -0-                  -0-                 440
</TABLE>

The accompanying Notes should be read with these financial statements.



                                       7
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    SUMMIT BANCSHARES, INC. AND SUBSIDIARIES
         FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 (UNAUDITED)
              AND FOR THE YEAR ENDED DECEMBER 31, 2001 (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 accounting principles
generally accepted in the United States of America and the prevailing practices
within the banking industry. A summary of the more significant policies follows:

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

         The consolidated financial statements of Summit Bancshares, Inc.
(hereinafter, collectively with its subsidiaries, the "Corporation"), include
its accounts and its direct and indirect wholly-owned subsidiaries, Summit
Delaware Financial Corporation and Summit Bank, National Association (the
"Bank"). Effective May 14, 2001, Summit Community Bank, N.A. was merged with and
into Summit National Bank and Summit National Bank changed its name to Summit
Bank, National Association. Also Summit Bancservices, Inc. was liquidated
effective May 14, 2001 and its assets were contributed by the Corporation to
Summit Bank, N.A. All operations of Summit Bancservices have been continued in
the Bank. All significant intercompany balances and transactions have been
eliminated in consolidation.

Use of Estimates
----------------

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 Bank is required to maintain certain balances at the Federal
Reserve Bank based on its level of deposits. During the first three months of
2002 the average cash balance maintained at the Federal Reserve Bank was
$1,252,000. Compensating balances held at other correspondent banks, to minimize
service charges, averaged approximately $17,818,000 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 at the time of purchase of
securities, 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 2002 and 2001 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.





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 simple interest
method. Direct costs related to loan originations are not separately allocated
to loans but are charged to non-interest expense in the period incurred. The net
effect of not recognizing such fees and related costs over the life of the
related loan is not considered to be material to the financial

                                       8

<PAGE>

Note 1 - Summary of Significant Accounting Policies (cont'd.)
-----

statements. 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. After loans are placed on non-accrual all payments
received are applied to 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 has adopted 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's 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 charged
against the allowance for loan losses when management believes that the
collectibility of the principal is unlikely.

         The evaluation of the adequacy of loan collateral is often based upon
estimates and appraisals. Because of changing economic conditions, the
valuations determined from such estimates and appraisals may also change.
Accordingly, the Corporation may ultimately incur losses which vary from
management's current estimates. Adjustments to the allowance for loan losses
will be reported in the period such adjustments become known or are reasonably
estimable.

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

         Premises and equipment are stated at cost less accumulated depreciation
and amortization. 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 non-interest expense. Renewals and
betterments are added to the asset accounts and depreciated over the periods
benefited. 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, less estimated costs to sell,
of the real estate acquired is less than the Corporation'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 2001 financial
statements to conform to the 2002 presentation.

                                       9

<PAGE>





NOTE 1 - Summary of Significant Accounting Policies (cont'd.)
------

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

         Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
"Earnings Per Share", requires presentation of basic and diluted earnings per
share. Basic earnings per share has been computed by dividing net income
available to common shareholders by the weighted average number of common shares
outstanding for the reporting period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. Net income per
common share for all periods presented has been calculated in accordance with
SFAS 128. Outstanding stock options issued by the Corporation represent the only
dilutive effect reflected in diluted weighted average shares.

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

         The consolidated balance sheet as of December 31, 2001, and the
consolidated statements of income, changes in shareholders' equity and cash
flows for the year ended December 31, 2001 are headed "unaudited" in these
financial statements. These statements were reported in the Securities Exchange
Commission Form 10-K as of December 31, 2001 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, 2002
                                                             -----------------------------------------------------------------------
                                                                                    Gross              Gross
                                                               Amortized         Unrealized         Unrealized            Fair
                                                                  Cost              Gains              Losses             Value
                                                             --------------     --------------     --------------     --------------
<S>                                                          <C>                <C>                <C>                <C>
Investment Securities - Available-for-Sale
  U.S.  Treasury Securities                                  $       5,019      $         117      $         -0-      $       5,136
  U.S. Government Agencies
    and Corporations                                               113,852              1,661               (131)           115,382
  U.S. Government Agency Mortgage
    Backed Securities                                               17,258                139                -0-             17,397
  Obligations of States and Political Subdivisions                   1,953                  2                (14)             1,941
  Federal Reserve and Federal Home Loan Bank Stock                   1,623                -0-                -0-              1,623
                                                             --------------     --------------     --------------     --------------

     Total Available-for-Sale Securities                           139,705              1,919               (145)           141,479
                                                             --------------     --------------     --------------     --------------

        Total Investment Securities                          $     139,705      $       1,919      $        (145)     $     141,479
                                                             ==============     ==============     ==============     ==============
</TABLE>


         All investment securities are carried on the consolidated
balance sheet as of March 31, 2002 at fair value. The net unrealized gain of
$1,774,000 is included in the Available-for-Sale Investment Securities balance.
The unrealized gain, net of tax, is included in Shareholders' Equity.

                                       10

<PAGE>

NOTE 2 - Investment Securities (cont'd)
------

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

<TABLE>
<CAPTION>
                                                                                       March 31, 2001
                                                             -----------------------------------------------------------------------
                                                                                    Gross              Gross
                                                               Amortized         Unrealized         Unrealized            Fair
                                                                  Cost              Gains              Losses             Value
                                                             --------------     --------------     --------------     --------------
<S>                                                          <C>                <C>                <C>                <C>
Investment Securities - Held-to-Maturity
  U.S. Treasury Securities                                   $       3,000      $          18      $         -0-      $       3,018
  U.S. Government Agencies
    and Corporations                                                 7,018                 48                -0-              7,066
                                                             --------------     --------------     --------------     --------------

    Total Held-to-Maturity Securities                               10,018                 66                -0-             10,084
                                                             --------------     --------------     --------------     --------------

Investment Securities - Available-for-Sale
  U.S.  Treasury Securities                                         23,049                222                -0-             23,271
  U.S. Government Agencies
    and Corporations                                                78,629              1,576                -0-             80,205
  U.S. Government Agency Mortgage
    Backed Securities                                               29,222                 29                (73)            29,178
  Obligations of States and Political Subdivisions                     240                  3                -0-                243
  Federal Reserve and Federal Home Loan Bank Stock                   1,309                -0-                -0-              1,309
                                                             --------------     --------------     --------------     --------------

     Total Available-for-Sale Securities                           132,449              1,830                (73)           134,206
                                                             --------------     --------------     --------------     --------------

        Total Investment Securities                          $     142,467      $       1,896      $         (73)     $     144,290
                                                             ==============     ==============     ==============     ==============
</TABLE>

         In the above schedule the amortized cost of Total Held-to-Maturity
Securities of $10,018,000 and the fair value of Total Available-for-Sale
Securities of $134,206,000 are reflected in Investment Securities on the
consolidated balance sheet as of March 31, 2001 for a total of $144,224,000. A
net unrealized gain of $1,757,000 is included in the Available-for-Sale
Investment Securities balance. The unrealized gain, net of tax, is included in
Shareholders' Equity. During the second quarter of 2001, $7 million of
securities previously classified as Held-to-Maturity Securities were
reclassified to Available-for-Sale Securities related to the merger of the two
bank subsidiaries. The unrealized gain on the reclassified securities of $52,000
was added to the Available-for-Sale Investment Securities balance.

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,
                                                                                  2002               2001               2001
                                                                             ---------------    ---------------    ---------------
<S>                                                                          <C>                <C>                <C>
Commercial                                                                   $      189,511     $      173,409     $      184,716
Real Estate Mortgage - Commercial                                                   120,352             93,883            107,600
Real Estate Mortgage - Residential                                                   47,913             37,213             44,522
Real Estate Construction                                                             61,812             49,244             60,548
Loans to Individuals                                                                 34,235             34,078             33,376
Less:  Unearned Discount                                                                 (5)               (29)                (8)
                                                                             ---------------    ---------------    ---------------
                                                                                    453,818            387,798            430,754
Allowance for Loan Losses                                                            (6,534)            (5,537)            (6,015)
                                                                             ---------------    ---------------    ---------------

     Loans - Net                                                             $      447,284     $      382,261     $      424,739
                                                                             ===============    ===============    ===============
</TABLE>




                                       11
<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,
                                                                                 2002             2001                2001
                                                                             ------------     ------------      ----------------
<S>                                                                          <C>              <C>               <C>
Balance, Beginning of Period                                                 $     6,015      $     5,399       $         5,399
Provisions, Charged to Income                                                        545              180                 1,755

Loans Charged-Off                                                                    (42)             (90)               (1,407)
Recoveries of Loans Previously
 Charged-Off                                                                          16               48                   268
                                                                             ------------     ------------      ----------------

          Net Loans (Charged-Off) Recovered                                          (26)             (42)               (1,139)
                                                                             ------------     ------------      ----------------

Balance, End of Period                                                       $     6,534      $     5,537       $         6,015
                                                                             ============     ============      ================
</TABLE>

         The provisions for loan losses charged to operating expenses during the
three months ended March 31, 2002 and March 31, 2001 of $545,000 and $180,000,
respectively, were considered adequate to maintain the allowance in accordance
with the policy discussed in Note 1. For the year ended December 31, 2001, a
provision of $1,755,000 was recorded.

         At March 31, 2002, the recorded investment in loans that are considered
to be impaired under Statement of Financial Accounting Standards No. 114 was
$3,218,000 (of which $3,218,000 were on non-accrual status). The related
allowance for loan losses for these loans was $1,242,000. The average recorded
investment in impaired loans during the three months ended March 31, 2002 was
approximately $3,330,000. 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,
                                                                                 2002             2001                2001
                                                                             ------------     -----------       ---------------
<S>                                                                          <C>              <C>               <C>
Land                                                                         $     2,317      $    2,317        $        2,317
Buildings and Improvements                                                         8,265           7,867                 8,247
Furniture & Equipment                                                              7,754           7,900                 7,540
                                                                             ------------     -----------       ---------------
Total Cost                                                                        18,336          18,084                18,104

Less:  Accumulated Amortization and Depreciation                                   9,677          10,154                 9,973
                                                                             ------------     -----------       ---------------

       Net Book Value                                                        $     8,659      $    7,930        $        8,131
                                                                             ============     ===========       ===============
</TABLE>

NOTE 5 - Other Real Estate
------
         The carrying value of other real estate is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                       March 31,
                                                                             -----------------------------        December 31,
                                                                                 2002             2001                2001
                                                                             ------------     ------------      ----------------
<S>                                                                          <C>              <C>               <C>
Other Real Estate                                                            $        -0-     $       283       $            -0-
                                                                             ============     ============      ================
</TABLE>

         There were no direct writedowns of other real estate charged to income
for the three months ended March 31, 2002. There were direct writedowns of other
real estate charged to income for the three months ended March 31, 2001 of
$3,000. For the year ended December 31, 2001, $11,000 was charged to income.

                                       12
<PAGE>




NOTE 6 - Deposits
------

         The book values of deposits by major type follow (in thousands):

<TABLE>
<CAPTION>
                                                                                         March 31,
                                                                             -------------------------------         December 31,
                                                                                  2002             2001                  2001
                                                                             -------------     -------------       ----------------
<S>                                                                          <C>               <C>                 <C>
Noninterest-Bearing Demand Deposits                                          $    151,236      $    131,995        $       150,040
Interest-Bearing Deposits:
  Interest-Bearing Transaction
    Accounts and Money Market Funds                                               178,617           217,081                175,965
  Savings                                                                         109,631           110,826                105,308
  Certificates of Deposit under $100,000 and IRA's                                 61,339            83,562                 64,380
  Certificates of Deposit $100,000 or more                                         44,782            62,535                 47,644
  Other                                                                               316               778                    466
                                                                             -------------     -------------       ----------------
       Total                                                                      394,685           474,782                393,763
                                                                             -------------     -------------       ----------------
           Total Deposits                                                    $    545,921      $    606,777        $       543,803
                                                                             =============     =============       ================
</TABLE>


NOTE 7 - Short Term Borrowings
------

         Securities sold under repurchase agreements generally represent
borrowings with maturities ranging from one to thirty days. Information relating
to these borrowings and Federal Funds Purchased is summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                         March 31,                     Year Ended
                                                                             -------------------------------          December 31,
                                                                                  2002              2001                  2001
                                                                             -------------     -------------       ----------------
<S>                                                                          <C>               <C>                 <C>
Securities Sold Under Repurchase Agreements:
     Average Balance                                                         $     14,400      $     18,724        $        17,470
     Period-End Balance                                                            13,437            16,831                 14,816
     Maximum Month-End Balance During Period                                       14,466            20,374                 20,374
     Interest Rate:
     Average                                                                         0.74%             4.58%                  2.94%
     Period-End                                                                      0.77%             4.23%                  0.75%
Federal Funds Purchased:
     Average Balance                                                         $      2,865      $        -0-        $           567
     Period-End Balance                                                               -0-               -0-                  8,550
     Maximum Month-End Balance During Period                                        1,657               -0-                  8,550
     Interest Rate:
     Average                                                                         2.01%             0.00%                  2.76%
     Period-End                                                                      0.00%             0.00%                  1.92%
</TABLE>

         The Corporation has available a line of credit with the Federal Home
Loan Bank of Dallas which allows the subsidiary to borrow on a collateralized
basis at a fixed term. At March 31, 2002, the subsidiary had $10,000,000 of
borrowings outstanding under the line of credit at a rate of 2.08% which will
mature in July 2002. For the three months ended March 31, 2002, the Corporation
had average borrowings under the line of credit of $18,500,000. In addition, at
March 31, 2002, the subsidiary had $1,055,000 borrowed under a match funding
agreement with Federal Home Loan Bank at a rate of 4.41% which matures in June
2003. For the three months ended March 31, 2001, the subsidiary had no
borrowings outstanding. At December 31, 2001, $5,000,000 of borrowings were
outstanding at a rate of 1.92% which matured in January 2002. For the year ended
December 31, 2001, the Corporation had average borrowings of $452,000.


NOTE 8 - Notes Payable
------

         On September 15, 2001, the Corporation obtained lines of credit from a
bank under which the Corporation may borrow $11,000,000 at prime rate. The lines
of credit are secured by stock of the Bank and matures on September 15, 2002,
whereupon, if balances are outstanding, the lines convert to term notes having
five year terms. The Corporation will not pay a fee for any unused portion of
the lines. As of March 31, 2002, no funds had been borrowed under these lines
nor were any borrowings outstanding.

                                       13

<PAGE>




NOTE 9 - 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,
                                                                                  2002              2001                  2001
                                                                             -------------     ----------------    ----------------
<S>                                                                          <C>               <C>                 <C>
Business Development                                                         $        168      $           137     $            734
Legal and Professional Fees                                                           173                  158                  634
Printing and Supplies                                                                  80                   78                  362
Regulatory Fees and Assessments                                                        58                   63                  244
Other                                                                                 572                  586                2,139
                                                                             -------------     ----------------    -----------------

       Total                                                                 $      1,051      $         1,022     $          4,113
                                                                             =============     ================    =================
</TABLE>

         The Merger-Related Expenses recorded in the first quarter of 2001
include expenses related to the merger of the Corporation's subsidiaries as
reported in Note 1 Basis of Presentation and Principles of Consolidation. The
expenses include the cost of severance payments to a former chief executive
officer of one of the units, legal and professional fees and expenses related to
the name change of Summit Bank, N.A.


NOTE 10 - Income Taxes
-------

         Federal income taxes included in the consolidated balance sheets were
as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                          March 31,
                                                                           ------------------------------------       December 31,
                                                                                2002                2001                  2001
                                                                           ---------------     ----------------     ----------------
<S>                                                                        <C>                 <C>                  <C>
Current Tax Asset (Liability)                                              $       (1,409)     $        (1,169)     $           493
Net Deferred Tax Asset                                                              1,968                1,369                1,432
                                                                           ---------------     ----------------     ----------------

       Total Included in Other Assets                                      $          559      $           200      $         1,925
                                                                           ===============     ================     ================
</TABLE>

         The net deferred tax asset at March 31, 2002 of $1,968,000 included
$(603,000), a deferred tax liability 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,
                                                                                2002                2001                  2001
                                                                           ---------------     ----------------     ----------------
<S>                                                                        <C>                 <C>                  <C>
Federal Income Tax Expense

Current                                                                    $        1,460      $         1,237      $         5,144
Deferred (benefit)                                                                   (267)                (127)                (480)
                                                                           ---------------     ----------------     ----------------

       Total Federal Income Tax Expense                                    $        1,193      $         1,110      $         4,664
                                                                           ===============     ================     ================

                     Effective Tax Rates                                            34.30%               34.40%               34.60%
</TABLE>




                                       14
<PAGE>

NOTE 10 - Income Taxes (cont'd)
-------

         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,
                                                                                2002                2001                 2001
                                                                           ---------------     ----------------     ----------------
<S>                                                                        <C>                 <C>                  <C>
Federal Income Taxes at Statutory
  Rate of 34.3%                                                            $        1,207      $         1,106      $         4,621
Effect of Tax Exempt Interest Income                                                  (11)                  (1)                  (3)
Non-deductible Expenses                                                                15                   13                   65
Other                                                                                 (18)                  (8)                 (19)
                                                                           ---------------     ----------------     ----------------

     Income Taxes Per Income Statement                                     $        1,193      $         1,110      $         4,664
                                                                           ===============     ================     ================
</TABLE>

Deferred income tax expense (benefit) results from differences between amounts
of assets and liabilities as measured for income tax return and financial
reporting purposes. The significant components of federal deferred tax assets
and liabilities are in the following table (in thousands):

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,                     Year Ended
                                                                           ------------------------------------      December 31,
                                                                                2002                2001                 2001
                                                                           ---------------     ----------------     ----------------
<S>                                                                        <C>                 <C>                  <C>
Federal Deferred Tax Assets:
  Allowance for Loan Losses                                                $        2,111      $         1,580      $         1,859
  Valuation Reserves - Other Real Estate                                              106                    6                  104
  Interest on Non-accrual Loans                                                       258                  267                  237
  Deferred Compensation                                                               560                  502                  555
  Other                                                                               -0-                   19                    9
                                                                           ---------------     ----------------     ----------------

  Gross Federal Deferred Tax Assets                                                 3,035                2,374                2,764
                                                                           ---------------     ----------------     ----------------

Federal Deferred Tax Liabilities:
  Depreciation and Amortization                                                       286                  302                  286
  Accretion                                                                           150                  106                  150
  Unrealized Gains on Available-for-Sale Securities                                   603                  597                  873
  Other                                                                                28                  -0-                   23
                                                                           ---------------     ----------------     ----------------

  Gross Federal Deferred Tax Liabilities                                            1,067                1,005                1,332
                                                                           ---------------     ----------------     ----------------

           Net Deferred Tax Asset                                          $        1,968      $         1,369      $         1,432
                                                                           ===============     ================     ================
</TABLE>

NOTE 11 - Related Party Transactions
-------

         The Bank has made transactions 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 $6,315,000 at December 31, 2001.

NOTE 12 - 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, 2002, outstanding documentary and standby letters of
credit totaled $7,315,000 and commitments to extend credit totaled $133,196,000.

                                       15
<PAGE>

NOTE 13 - 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 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, 2001, and the three months ended March 31, 2002.

         The following is a summary of transactions during the periods
presented:

<TABLE>
<CAPTION>
                                                                                             Shares Under Option
                                                                             ----------------------------------------------------
                                                                                Three Months Ended               Year Ended
                                                                                  March 31, 2002              December 31, 2001
                                                                             ------------------------      ----------------------
<S>                                                                          <C>                           <C>
Outstanding, Beginning of Period                                                             445,959                     359,559
Additional Options Granted During
  the Period                                                                                   7,500                     124,600
Forfeited During the Period                                                                      -0-                         -0-
Exercised During the Period                                                                   (7,900)                    (38,200)
                                                                             ------------------------      ----------------------

     Outstanding, End of Period                                                              445,559                     445,959
                                                                             ========================      ======================
</TABLE>

         Options outstanding at March 31, 2002 ranged in price from $3.00 to
$20.10 per share with a weighted average exercise price of $10.82 and 323,779
shares exercisable. At March 31, 2002, there remained 355,200 shares reserved
for future grants of options under the 1997 Plan.


NOTE 14 - Employee Benefit Plans
-------

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

         The Corporation implemented a 401(k) plan in December 1997 covering
substantially all employees. The Corporation made no contribution to this plan
in 1999 or 1998. In 2001 and 2000, the Corporation made matching contributions
to the participant's deferrals of compensation up to 100% of the employee
contributions not to exceed 6% of the employee's annual compensation.

         The amount expensed in support of the plan was $99,000 and $90,000
during the first three months of 2002 and 2001, respectively, and $353,000 for
the year 2001.

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 $67,000 and $39,000 during the first three months of
2002 and 2001, respectively, and $256,000 for the year 2001.

Employment Contracts
--------------------

         The Chief Executive Officer of the Corporation has entered into a
severance agreement providing for salary and fringe benefits in the event of
termination for other than cause and under certain changes in control.

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).

                                       16

<PAGE>




NOTE 15 - 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 (dollars in thousands).

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,                     Year Ended
                                                                           ------------------------------------      December 31,
                                                                                2002                2001                 2001
                                                                           ---------------     ----------------     ----------------
<S>                                                                        <C>                 <C>                  <C>
Net income                                                                 $      2,286        $      2,111         $         8,802
                                                                           =============       =============        ================
Weighted average number of common
   shares used in Basic EPS                                                   6,263,193           6,368,562               6,317,991
Effect of dilutive stock options                                                154,753             157,721                 153,032
                                                                           -------------       -------------        ----------------
Weighted number of common shares
   and dilutive potential common
   stock used in Diluted EPS                                                  6,417,946           6,526,283               6,471,023
                                                                           =============       =============        ================
</TABLE>

NOTE 16 - 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,
                                                                                                   -------------------------------
                                                                                                       2002              2001
                                                                                                   -------------     -------------
<S>                                                                                                <C>               <C>
Financial Instruments Whose Contract Amounts Represent Credit Risk:
     Loan Commitments Including Unfunded Lines of Credit                                           $    133,196      $     121,642
     Standby Letters of Credit                                                                            7,315              5,369
</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 17 - Concentrations of Credit Risk
-------

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


NOTE 18 - Litigation
-------

         The Corporation is 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.

                                       17

<PAGE>




NOTE 19 - Stock Repurchase Plan
-------

         On April 16, 2002, the Board of Directors approved a stock repurchase
plan. The plan authorized management to purchase up to 318,973 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 three months ended March 31, 2002, 5,000 shares were purchased
by the Corporation through a similar repurchase plan through the open market.


NOTE 20 - Subsequent Event
-------

         On April 16, 2002, the Board of Directors of the Corporation approved a
quarterly dividend of $.12 per share to be paid on May 15, 2002 to shareholders
of record on May 1, 2002.


NOTE 21 - 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.

         The estimated fair values of the Corporation's financial instruments
are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                            March 31,
                                                                ------------------------------------------------------------------
                                                                              2002                               2001
                                                                ------------------------------      ------------------------------
                                                                  Carrying            Fair            Carrying            Fair
                                                                   Amount             Value            Amount             Value
                                                                -------------     ------------      ------------      ------------
<S>                                                             <C>               <C>               <C>               <C>
Financial Assets

    Cash and due from banks                                     $    23,788       $   23,788        $   28,494        $   28,494
    Federal funds sold and Due From Time                              4,246            4,248           111,229           111,245
    Securities                                                      141,479          141,479           144,224           144,290
    Loans                                                           453,818          469,231           387,798           391,146
    Allowance for loan losses                                        (6,534)          (6,534)           (5,537)           (5,537)

Financial Liabilities

    Deposits                                                        545,921          547,253           606,777           608,239
    Short Term Borrowings                                            24,492           24,457            16,831            16,829

Off-balance Sheet Financial Instruments

    Loan commitments                                                                 133,196                             121,642
    Letters of credit                                                                  7,315                               5,369
</TABLE>




                                       18
<PAGE>




NOTE 22 - Comprehensive Income
-------

         The Corporation has adopted Financial Accounting Standards Board
("FASB") Statement of Financial Accounting Standards No. 130 "Reporting
Comprehensive Income". This standard requires an entity to report and display
comprehensive income and its components. Comprehensive income is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,                     Year Ended
                                                                           ------------------------------------      December 31,
                                                                                2002                2001                 2001
                                                                           ---------------     ----------------     ----------------
<S>                                                                        <C>                 <C>                  <C>
Net Income                                                                 $      2,286        $    2,111           $         8,802
Other Comprehensive Income:
  Unrealized gain (loss) on securities
  available-for-sale, net of tax                                                   (523)              874                     1,409
                                                                           -------------       -----------          ----------------

    Comprehensive Income                                                   $      1,763        $    2,985           $        10,211
                                                                           =============       ===========          ================
</TABLE>




                                       19
<PAGE>




Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
------------------------------------------------------------------------

Summary
-------
         Management's Discussion and Analysis of Financial Condition and Results
of Operations of the Corporation analyzes the major elements of the
Corporation's consolidated balance sheets and statements of income. This
discussion should be read in conjunction with the consolidated financial
statements and accompanying notes.

         Net income for the first quarter of 2002 was $2,286,000 or $.36 diluted
earnings per share, compared with $2,111,000, or $.32 diluted earnings per
share, for the first quarter of 2001. On a per share basis, diluted earnings per
share increased 12.5% over the first quarter of the prior year. Per share
amounts are based on average diluted shares outstanding of 6,417,946 for the
first three months of 2002 and 6,526,283 for the comparable period of 2001
adjusted to reflect stock options granted.

         Outstanding loans at March 31, 2002 of $453.8 million represented an
increase of $66.0 million, or 17.0%, over March 31, 2001 and an increase of
$23.1 million, or 5.4%, from December 31, 2001.

         Total deposits at March 31, 2002 of $545.9 million were down from
$606.8 million at March 31, 2001 as the prior year balances included $72 million
of extraordinary deposits that were retained in the company balances for only a
short time. Excluding these funds, deposits were up $11.1 million, or 2.1%. The
growth was in demand deposits which were up $19.2 million or 14.6% from the
prior year and at March 31, 2002, made up 27.7% of total deposits. Deposits were
up $2.1 million, or .4% from December 31, 2001.

         The following table summarizes the Corporation's performance for the
three months ended March 31, 2002 and 2001 (tax equivalent basis and dollars in
thousands).

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                     March 31,
                                                          -------------------------------
                                                              2002               2001
                                                          ------------       ------------
<S>                                                       <C>                <C>
Interest Income                                           $     9,566        $    12,088
Interest Expense                                                2,132              4,900
                                                          ------------       ------------

        Net Interest Income                                     7,434              7,188
Provision for Loan Loss                                           545                180
                                                          ------------       ------------

        Net Interest Income After
               Provision for Loan Loss                          6,889              7,008
Non-Interest Income                                             1,250              1,038
Non-Interest Expense                                            4,643              4,823
                                                          ------------       ------------

        Income Before Income Tax                                3,496              3,223
Income Tax Expense                                              1,210              1,112
                                                          ------------       ------------

               Net Income                                 $     2,286        $     2,111
                                                          ============       ============

Net Income per Share-
    Basic                                                 $      0.37        $      0.33
    Diluted                                                      0.36               0.32

Return on Average Assets                                         1.45%              1.38%

Return on Average Stockholders' Equity                          15.00%             15.15%
</TABLE>



                                       20

<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 2002 and 2001 (rates on tax equivalent basis).

<TABLE>
<CAPTION>
                                                                    Three Months Ended March 31,
                                          -----------------------------------------------------------------------------------------
                                                            2002                                             2001
                                          ---------------------------------------------    ----------------------------------------
                                              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 & Due From Time      $      3,554    $        19         2.18%          $    64,286    $      854        5.39%
  Investment Securities (Taxable)              150,269          1,848         4.99%              137,519         2,145        6.33%
  Investment Securities (Tax-exempt)             1,894             28         5.98%                  240             5        7.65%
  Loans, Net of Unearned Discount(1)           446,440          7,671         6.97%              381,849         9,084        9.65%
                                          -------------   ------------  ------------       -------------    -----------  ----------
    Total Earning Assets                       602,157          9,566         6.44%              583,894        12,088        8.40%
                                                          ------------                                      -----------
Non-interest Earning Assets:
  Cash and Due From Banks                       24,102                                            23,317
  Other Assets                                  18,823                                            18,506
  Allowance for Loan Losses                     (6,207)                                           (5,464)
                                          -------------                                      -------------
    Total Assets                          $    638,875                                       $   620,253
                                          =============                                      ============

Interest-Bearing Liabilities:
  Interest-Bearing Transaction
    Accounts and Money Market Funds       $    173,484            565         1.32%          $   167,548         1,394        3.38%
  Savings                                      108,793            475         1.77%               98,511         1,085        4.47%
  Certificates of Deposit under $100,000
    and IRA's                                   62,552            544         3.53%               83,365         1,248        6.07%
  Certificates of Deposit
    $100,000 or more                            45,724            409         3.63%               61,842           950        6.23%
  Other Time                                       411              4         3.78%                  778            12        6.29%
  Other Borrowings                              36,033            135         1.52%               18,724           211        4.58%
                                          -------------   ------------  ------------       -------------    -----------  ----------
    Total Interest-Bearing Liabilities         426,997          2,132         2.02%              430,768         4,900        4.61%
                                                          ------------                                      -----------
Non-interest Bearing Liabilities:
  Demand Deposits                              146,785                                           129,967
  Other Liabilities                              3,263                                             3,005
  Shareholders' Equity                          61,830                                            56,513
    Total Liabilities and                 -------------                                      ------------
      Shareholders' Equity                $    638,875                                       $   620,253
                                          =============                                      ============
Net Interest Income and Margin
 (Tax-equivalent Basis)(2)                                $     7,434         5.01%                         $    7,188        4.99%
                                                          ============                                      ===========
</TABLE>

(1) Loan interest income includes fees and loan volumes include loans on
    non-accrual.

(2) Presented on tax equivalent basis ("T/E") using a federal income tax rate of
    34% both years.



                                       21
<PAGE>





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

         Net interest income (tax equivalent) for the first quarter of 2002 was
$7,434,000 which represented an increase of $246,000 or 3.4%, over the first
quarter of 2001. In this same period, total interest income declined 20.9% and
total interest expense declined 56.5% and reflects a 475 basis point decrease in
market interest rates from the first of January 2001 to March 2002.

         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, 2002 and 2001.


                   ANALYSIS OF CHANGES IN NET INTEREST INCOME
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                1st Qtr. 2002 vs. 1st Qtr. 2001                  1st Qtr. 2001 vs. 1st Qtr. 2000
                                                      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                   $       (807)   $       (28)    $      (835)      $       737    $        (67)   $    670
     Investment Securities (Taxable)               199           (496)           (297)             (434)            300        (134)
     Investment Securities (Tax-exempt)             31             (8)             23                (7)              3          (4)
     Loans, Net of Unearned Discount             1,537         (2,950)         (1,413)              345              58         403
                                          -------------   ------------    ------------      ------------   -------------   ---------

     Total Interest Income                         960         (3,482)         (2,522)              641             294         935
                                          -------------   ------------    ------------      ------------   -------------   ---------

Interest-Bearing Liabilities:
     Deposits                                     (402)        (2,290)         (2,692)              615             334         949
     Other Borrowings                              195           (271)            (76)             (125)            (15)       (140)
                                          -------------   ------------    ------------      ------------   -------------   ---------


     Total Interest Expense                       (207)        (2,561)         (2,768)              490             319         809
                                          -------------   ------------    ------------      ------------   -------------   ---------

Net Interest Income                       $      1,167    $      (921)    $       246       $       151    $        (25)   $    126
                                          =============   ============    ============      ============   =============   =========
</TABLE>

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

         The Corporation's allowance for loan losses was $6,534,000, or 1.44% of
total loans, as of March 31, 2002 compared to $5,537,000, or 1.43% of total
loans, as of March 31, 2001.

         Transactions in the provision for loan losses are summarized as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,
                                                                           ------------------------------------
                                                                                2002                2001
                                                                           ---------------     ----------------
<S>                                                                        <C>                 <C>
Balance, Beginning of Period                                               $      6,015        $      5,399
Provisions, Charged to Income                                                       545                 180

Loans Charged-Off                                                                   (42)                (90)
Recoveries of Loans Previously
 Charged-Off                                                                         16                  48
                                                                           -------------       -------------
     Net Loans (Charged-Off)
     Recovered                                                                      (26)                (42)
                                                                           -------------       -------------
Balance, End of Period                                                     $      6,534        $      5,537
                                                                           =============       =============
</TABLE>

         For the Three Months ended March 31, 2002 and 2001, net charge-offs
were .01% and .01% of loans, respectively, not annualized.

                                       22
<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,
                                            2002              2001               2001              2001               2001
                                        -------------     -------------     --------------     -------------     ---------------
<S>                                     <C>               <C>               <C>                <C>               <C>
Non-Accrual Loans                       $      3,458      $      4,115      $       2,632      $      2,611      $        2,904
Renegotiated Loans                               -0-               -0-                -0-               -0-                 -0-
Other Real Estate Owned and
  Other Foreclosed Assets                         97               444                511               643               1,348
                                        -------------     -------------     --------------     -------------     ---------------

    Total Non-Performing Assets         $      3,555      $      4,559      $       3,143      $      3,254      $        4,252
                                        =============     =============     ==============     =============     ===============

As a Percent of:
    Total Assets                                0.56%             0.72%              0.50%             0.52%               0.62%
    Total Loans and Other Real Estate/
      Foreclosed Assets                         0.78%             1.06%              0.75%             0.81%               1.10%

Loans Past Due 90 days or
    More and Still Accruing             $        228      $         16      $          58      $        315      $           32
</TABLE>

        Non-accrual loans to total loans were .76% at March 31, 2002 and
non-performing assets were .78% of loans and other real estate owned/foreclosed
assets at the same date.

         As of March 31, 2002, non-accrual loans were comprised of $2,775,000 in
commercial loans, $146,000 in real estate mortgage loans, $350,000 in real
estate construction loans and $187,000 in consumer loans.

         As of March 31, 2002, there was no other real estate owned. Also the
Company has $97,000 in Other Foreclosed Assets which represents an inventory of
textbooks. These assets are in process of liquidation, however the process is
expected to take several months. The cost of liquidation is recorded as a
current period expense and all proceeds from sale of inventory reduces the
carrying-value of the inventory.

         The following table summarizes the relationship between non-performing
loans, criticized loans and the allowance for loan losses (dollars in
thousands).

<TABLE>
<CAPTION>
                                          March 31,        December 31,      September 30,       June 30,            March 31,
                                            2002               2001              2001              2001                 2001
                                        -------------     -------------     --------------     -------------     ---------------
<S>                                     <C>               <C>               <C>                <C>               <C>
Non-Performing Loans                    $     3,458       $     4,115       $     2,632        $     2,611       $         2,904
Criticized Loans                             23,043            24,879            18,713             11,677                11,586
Allowance for Loan Losses                     6,534             6,015             6,190              5,745                 5,537
Allowance for Loan Losses
       as a Percent of:
        Non-Performing Loans                    189%              146%              235%               220%                 191%
        Criticized Loans                         28%               24%               33%                49%                  48%
</TABLE>



                               23

<PAGE>



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,
                                         ---------------------------------------------
                                            2002           2001           % Change
                                         ------------   ------------    --------------
<S>                                      <C>            <C>             <C>
Service Charges on Deposit Accounts      $       645    $       554         16.4%
Non-recurring Income                              51            -0-            -
Other Non-interest Income                        554            484         14.5
                                         ------------   ------------    -----------

  Total Non-interest Income              $     1,250    $     1,038         20.4
                                         ============   ============    ===========
</TABLE>

         The increase in other non-interest income in the first quarter of 2002
is primarily due to increases in mortgage brokerage/origination fees and ATM
service fees. The non-recurring income in the first quarter of 2002 represented
the gain on sale of assets previously held in other assets.

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,
                                       -----------------------------------------------
                                           2002           2001           % Change
                                       ------------   -------------   ----------------
<S>                                    <C>            <C>             <C>
Salaries & Employee Benefits           $     2,867    $      2,539           12.9%
Occupancy Expense - Net                        252             309          (18.4)
Furniture and Equipment Expense                404             361           11.9
Other Real Estate Expense - Net                 69              (6)             -
Merger Related Expense                         -0-             598              -
Other Expenses:
 Business Development                          168             137           22.6
 Insurance - Other                              33              33              -
 Legal & Professional Fees                     173             158            9.5
 Taxes - Other                                  14              36         ( 61.1)
 Postage & Courier                              87              86            1.2
 Printing & Supplies                            80              78            2.6
 Regulatory Fees & Assessments                  58              63           (7.9)
 Other Operating Expenses                      438             431            1.6
                                       ------------   -------------   ------------

        Total Other Expenses                 1,051           1,022            2.8
                                       ------------   -------------   ------------

        Total Non-interest Expense     $     4,643    $      4,823           (3.7)
                                       ============   =============   ============
</TABLE>

          Total non-interest expense decreased 3.7% in the first quarter of 2002
over 2001, primarily due to $598,000 of merger related expenses incurred in the
first quarter of 2001 in merging the Company's two banking subsidiaries.
Excluding these charges, non-interest expenses were up 9.9% in the first quarter
of 2002 over 2001, reflecting increases in salaries and benefits, furniture and
equipment and business development expenses. As a percent of average assets,
non-interest expenses were 2.94% in the first quarter of 2002 (annualized) and
3.16% in the same period of 2001. The "efficiency ratio" (non-interest expenses
divided by total non-interest income plus net interest income) was 53.47% for
the first quarter of 2002.

         The decrease in occupancy expense is primarily due to rent income being
down in 2001 because of a vacancy at one bank facility that has third party
rental space. The property has subsequently been rented.

         The Merger Related Expenses included in 2001 expenses, accrued and
incurred, related to the merger of the Company's two banking subsidiaries and
its non-banking subsidiary to form one unit. The expenses include the cost of
severance payment to a former chief executive officer of one of the units, legal
and professional fees and expenses related to the name change of Summit Bank,
N.A.





         Other Real Estate Expense in the first quarter of 2002 includes $69,000
of expense related to Other Foreclosed Assets. These expenses are the costs to
liquidate the inventory of textbooks.

                                       24
<PAGE>




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, 2002 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                          $      269,604      $   23,192       $    16,981      $    309,777     $    144,041    $   453,818
  Investment Securities                   3,814          23,188            26,592            53,594           87,885        141,479
  Federal Funds Sold and
    Due From Time                         4,246              -0-              -0-             4,246              -0-          4,246
                                 ---------------     ------------     ------------     -------------    -------------   ------------

   Total Earning Assets                 277,664           46,380           43,573           367,617          231,926         599,543
                                 ---------------     ------------     ------------     -------------    -------------   ------------

Interest Bearing Liabilities:
  Interest-Bearing Transaction
    Accounts and Savings                288,248              -0-              -0-           288,248              -0-         288,248
  Certificates of Deposit
    under $100,000 and IRA's              8,733           25,241           19,674            53,648            8,007          61,655
  Certificates of Deposit
    $100,000 or More                      9,553           22,176           10,223            41,952            2,830          44,782
  Short Term Borrowings                  13,437           10,000              -0-            23,437            1,055          24,492
                                 ---------------     ------------     ------------     -------------    -------------   ------------

   Total Interest Bearing
    Liabilities                         319,971           57,417           29,897           407,285           11,892         419,177
                                 ---------------     ------------     ------------     -------------    -------------   ------------

Interest Sensitivity
 Gap                             $      (42,307)     $   (11,037)     $    13,676      $    (39,668)    $    220,034    $    180,366
                                 ===============     ============     ============     =============    =============   ============
Cumulative Gap                   $      (42,307)     $   (53,344)     $   (39,668)
                                 ===============     ============     ============

Cumulative Gap to
 Total Earning Assets                    (7.06%)          (8.90%)          (6.62%)

Cumulative Gap to
 Total Assets                            (6.66%)          (8.40%)          (6.25%)
</TABLE>

         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 (6.25%) was reversed to a positive 18.38% "beta adjusted" GAP position.

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



                                       25
<PAGE>



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.

         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, 2002, the Corporation's Tier I
capital represented 12.48% of risk weighted assets and total qualifying capital
(Tier I and Tier II) represented 13.73% of risk weighted assets. Both ratios are
well above current regulatory guidelines.

         Also, as of March 31, 2002, the Corporation and its Subsidiary Banks
met the criteria for classification as a "well-capitalized" institution under
the rules of the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA").

         The Corporation and Subsidiary Banks' regulatory capital positions as
of March 31, 2002, were as follows:

<TABLE>
<CAPTION>
                                                                                                              To Be Well
                                                                                                           Capitalized Under
                                                                                  For Capital              Prompt Corrective
                                                      Actual                  Adequacy Purposes            Action Provisions
                                             -------------------------    --------------------------   --------------------------
                                                  Amount      Ratio           Amount          Ratio        Amount         Ratio
                                             -------------   ---------    -------------    ---------   ------------    ----------
<S>                                          <C>             <C>          <C>              <C>         <C>             <C>
CONSOLIDATED:
As of March 31, 2002
Total Capital (to Risk Weighted Assets)         $ 66,382       13.73%      $ 38,677           8.00%
Tier I Capital (to Risk Weighted Assets)          60,333       12.48%        19,339           4.00%
Tier I Capital (to Average Assets)                60,333        9.44%        19,166           3.00%

SUMMIT BANK, N.A.:
As of March 31, 2002
Total Capital (to Risk Weighted Assets)         $ 65,585       13.57%      $ 38,675           8.00%       $ 48,343        10.00%
Tier I Capital (to Risk Weighted Assets)          59,536       12.32%        19,337           4.00%         29,006         6.00%
Tier I Capital (to Average Assets)                59,536        9.32%        19,169           3.00%         31,949         5.00%
</TABLE>

Forward-Looking Statements
--------------------------

         The Corporation may from time to time make forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act of 1995)
with respect to earnings per share, credit quality, expected Year 2002
compliance program, corporate objectives and other financial and business
matters. The Corporation cautions the reader that these forward-looking
statements are subject to numerous assumptions, risks and uncertainties,
including economic conditions; actions taken by the Federal Reserve Board;
legislative and regulatory actions and reforms; competition; as well as other
reasons, all of which change over time. Actual results may differ materially
from forward-looking statements.



                                       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

                                    11  Computation of Earnings Per Common Share


                                       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:   04-23-02                               By: /s/ Philip E. Norwood
     -------------                                 ----------------------
                                                   Philip E. Norwood,
                                                   Chairman, President and
                                                   Chief Executive Officer


Date:   04-23-02                               By: /s/ Bob G. Scott
     -------------                                 -----------------
                                                   Bob G. Scott,
                                                   Executive Vice President
                                                   and Chief Operating Officer
                                                   (Chief Accounting Officer)

                                       28

<PAGE>







                                  EXHIBIT INDEX

         Exhibit                                                     Page No.
         -------                                                     --------


           11      Computation of Earnings Per Common Share             30