Summit Financial (SMMF) 8-K Results of Operations and Financial Condition

Exhibit 99

RELEASE 5:00 PM EDT, WEDNESDAY, OCTOBER 19, 2005

Contact:	Robert S. Tissue, Sr. Vice President & CFO
Telephone:	(304) 530-0552
Email:	rtissue@SummitFGI.com

SUMMIT FINANCIAL GROUP REPORTS RECORD THIRD QUARTER AND YEAR-TO-DATE EARNINGS

Assets Surpass $1 Billion

MOOREFIELD, W.Va.--(BUSINESS WIRE)—October 19, 2005—Summit Financial Group, Inc. (NASDAQ: SMMF) today reported third quarter 2005 net income of $3.3 million, an increase of 4.7 percent from the $3.1 million reported for the third quarter of 2004. Diluted earnings per share were $0.45 compared with $0.44 for the prior-year quarter, up 2.3 percent. The increase reflects solid growth in net interest income and well-controlled expense growth. For the third quarter of 2005, the returns on average shareholders' equity and average assets were 18.24 percent and 1.33 percent, respectively, compared with prior-year period ratios of 20.06 percent and 1.46 percent.

For the nine months ended September 30, 2005, Summit reported net income of $8.8 million, an increase of 6.7 percent from the $8.3 million reported for the first nine months of 2004. Diluted earnings per share were $1.22 compared with $1.16 for the prior-year period, up 5.2 percent. The increase reflects solid revenue growth, both from community banking and mortgage banking activities, partially offset by higher costs associated with expansion activities. For the first nine months of 2005, the returns on average shareholders' equity and average assets were 16.85 percent and 1.25 percent, respectively, compared with prior-year period ratios of 18.31 percent and 1.33 percent.

H. Charles Maddy, III, President and Chief Executive Officer, commented, "Our community banking segment experienced record loan growth and demand deposit growth for the quarter. On an annualized basis, loan growth from the linked quarter was in excess of 40 percent, and demand deposits were up nearly 60 percent. Moreover, our recent investments in people and infrastructure have allowed us to achieve these outstanding results and still provide ample capacity for further loan growth. As with many banks in this rate environment, however, profitability is increasingly affected by rising funding costs. We have been successful thus far managing our loan/deposit mix to sustain revenue growth at double-digit levels, and we believe there are still many attractive lending opportunities available to us. As loan demand returns to more normal levels, our reliance on higher cost time and brokered deposits should decline, providing less pressure and greater stability to our margin, as was the case in the second quarter of this year.

Mr. Maddy continued, “We are pleased to report that our mortgage banking segment originated a record volume of mortgages this past quarter, which we sold in the secondary market. However, we anticipate that loan volume will decline on a seasonal basis for the remainder of the year. The $1.9 million in net income we’ve generated year-to-date represents a 12.5 percent improvement over the prior year, and a welcome contribution to our bottom line.”

THIRD QUARTER 2005 CONSOLIDATED RESULTS

Total revenue for the third quarter of 2005, consisting of net interest income plus non-interest income, was $16.3 million, an increase of 4.3 percent over the third quarter of 2004. Net interest income for the quarter increased 10.6 percent above the prior-year third quarter, to $7.8 million, reflecting 14.6 percent growth in average earning assets, partially offset by an 18 basis point drop in the net interest margin to 3.47 percent. Non-interest income for the third quarter of 2005 was $8.5 million, relatively flat compared with the third quarter of 2004. Summit experienced strong growth in service fee income, up 23.7 percent, and other income, up 50.5 percent; but these increases to non-interest income were offset by a 5.5 percent decline in mortgage origination revenue from the Company's mortgage banking unit, Summit Mortgage (formerly known as Summit Financial, LLC), which is discussed below.

Non-interest expense for the third quarter of 2005 was $10.9 million, a 1.0 percent increase over the $10.8 million reported for the third quarter of 2004. Salaries and employee benefits represented the largest category of expense growth, up $380 thousand or 7.5 percent. Declines in other categories reflected Summit’s continued focus on cost control. The efficiency ratio was 65.40 percent for the third quarter of 2005 compared with 67.11 percent for the prior-year period. (The efficiency ratio for the Company's Community Banking Segment, shown below, is a more accurate indicator of its performance compared with other community banks.)

Asset quality remains strong. Net charge-offs were $200,000 for the third quarter of 2005, equivalent to an annualized 0.11 percent of average loans. Nonperforming assets were $1.9 million or 0.18 percent of assets at September 30, 2005, down from $2.6 million or 0.31 percent at September 30, 2004. At period-end, loan loss reserves were 0.79 percent of loans.

Assets at September 30, 2005 were $1.0 billion, an increase of 19.4 percent over the last twelve months. The increase was driven by portfolio loan growth of $144.0 million, up 24.4 percent to $735.4 million. Commercial real estate loans, up $105.4 million or 38.9 percent, were the largest contributors to this growth, and now constitute 51.1 percent of the loan portfolio. Since June 30, 2005, loans increased $69.9 million or 10.5 percent (42.0 percent annualized). According to Mr. Maddy, “Loan growth this quarter was unusually strong, reflecting the increasing contribution of the three lenders we added over the past twelve months.”

Deposits at September 30, 2005 were $628.9 million, an increase of $93.1 million, or 17.4 percent from prior-year third quarter levels. Compared to the June 30, 2005 quarter, deposits increased $63.8 million, or 11.3 percent (45.1 percent annualized). More importantly, core deposits (checking and savings accounts) increased 26.0 percent year-over-year, and 11.3 percent from the June 30, 2005 quarter (45.1 percent annualized). Mr. Maddy commented, “We are doing an exceptional job on the deposit-gathering side of our business; demand deposits increased $30.4 million from the linked quarter, which represents quarterly growth of 14.6 percent (58.2 percent annualized). However, loan demand is stronger still, and we will not turn away opportunities to develop new relationships with attractive borrowers. As a result, our reliance on brokered deposits has increased for the present time.” Growth in demand deposits improved the deposit mix, with demand deposits now accounting for 38.0 percent of total deposits compared with 32.6 percent at September 30, 2004.

Shareholders' equity at period end was $72.4 million, an increase of 11.0 percent over the last twelve months. Common shares outstanding totaled 7,125,820 at September 30, 2005.

THIRD QUARTER 2005 OPERATING SEGMENT RESULTS

Community Banking Financial Performance

Net income for the third quarter of 2005 was $2.8 million, an increase of 13.4 percent from the prior-year quarter. Total revenue increased 15.2 percent to $8.8 million, while non-interest expense increased 14.4 percent to $4.4 million due to staff additions and the recently-opened Warrenton, Virginia branch. The Community Banking segment's efficiency ratio was 53.75 percent compared with 51.68 percent for the prior-year third quarter.

Mortgage Banking Financial Performance

The Company's mortgage banking unit, Summit Mortgage, commenced operations during the third quarter of 2003. This segment originates first mortgages in the Company's community banking markets and fixed-rate debt consolidation second mortgage loans for borrowers nationwide. Loan originations in the third quarter of 2005 were $83.9 million, up 10.6 percent above last year's third quarter. Loan sales were $87.1 million, up 8.9 percent from the 2004 third quarter.

Net income for the third quarter of 2005 was $905,000, an increase of 0.6 percent over the prior-year quarter. Revenue totaled $7.5 million, down from $8.0 million in the prior-year period as a result of changes in the loan mix toward first mortgages, which are less profitable than second mortgages. Non-interest expense declined 9.4 percent to $6.0 million, with lower marketing costs, mainly direct mail, accounting for the improvement.

ABOUT THE COMPANY

Summit Financial Group, Inc., a financial holding company with total assets of $1.0 billion, operates fourteen banking locations through its two wholly-owned community banks: Summit Community Bank, headquartered in Moorefield, West Virginia; and Shenandoah Valley National Bank in Winchester, Virginia. Summit also operates Summit Mortgage, a residential mortgage loan originator located in Herndon, Virginia and Summit Insurance Services, LLC in Moorefield, West Virginia.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Please refer to Summit's filings with the Securities and Exchange Commission for a summary of important factors that could affect Summit's forward-looking statements. Summit undertakes no obligation to revise these statements following the date of this press release.

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q3 2005 vs Q3 2004
	For the Quarter Ended						Percent
Dollars in thousands, except per share amounts	9/30/2005			9/30/2004			Change
Condensed Statements of Income
Interest income
Loans, including fees	$	12,527		$	9,334			34.2	%
Securities		2,283			2,267			0.7	%
Other		27			33			-18.2	%
Total interest income		14,837			11,634			27.5	%
Interest expense
Deposits		3,509			2,451			43.2	%
Borrowings		3,518			2,122			65.8	%
Total interest expense		7,027			4,573			53.7	%
Net interest income		7,810			7,061			10.6	%
Provision for loan losses		424			293			44.7	%
Net interest income after provision
for loan losses		7,386			6,768			9.1	%
Noninterest income
Service fee income		711			575			23.7	%
Mortgage origination revenue		7,304			7,732			-5.5	%
Securities gains (losses)		39			(35	)		n/m
Other income		411			273			50.5	%
Total noninterest income		8,465			8,545			-0.9	%
Noninterest expense
Salaries and employee benefits		5,435			5,055			7.5	%
Net occupancy expense		479			408			17.4	%
Equipment expense		465			433			7.4	%
Postage expense		1,451			1,703			-14.8	%
Advertising		1,164			1,229			-5.3	%
Other expenses		1,884			1,939			-2.8	%
Total noninterest expense		10,878			10,767			1.0	%
Income before income taxes		4,973			4,546			9.4	%
Income taxes		1,700			1,420			19.7	%
Net income	$	3,273		$	3,126			4.7	%
Per Share Data
Basic earnings	$	0.46		$	0.44			4.5	%
Diluted earnings	$	0.45		$	0.44			2.3	%
Average shares outstanding
Basic		7,125,483			7,026,173			1.4	%
Diluted		7,211,331			7,174,859			0.5	%
Performance Ratios
Return on average equity		18.24	%		20.06	%		-9.1	%
Return on average assets		1.33	%		1.46	%		-8.9	%
Net yield on earning assets - taxable equivalent		3.47	%		3.65	%		-4.9	%
Efficiency ratio consolidated(A)		65.40	%		67.11	%		-2.5	%
Efficiency ratio excluding mortgage banking (A)		53.75	%		51.68	%		4.0	%

 NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Nine Month Performance Summary -- 2005 vs 2004
	For the Nine Months Ended						Percent
Dollars in thousands, except per share amounts	9/30/2005			9/30/2004			Change
Condensed Statements of Income
Interest income
Loans, including fees	$	33,741		$	26,393			27.8	%
Securities		6,833			7,109			-3.9	%
Other		79			97			-18.6	%
Total interest income		40,653			33,599			21.0	%
Interest expense
Deposits		8,952			7,254			23.4	%
Borrowings		9,133			5,884			55.2	%
Total interest expense		18,085			13,138			37.7	%
Net interest income		22,568			20,461			10.3	%
Provision for loan losses		1,179			758			55.5	%
Net interest income after provision
for loan losses		21,389			19,703			8.6	%
Noninterest income
Service fee income		1,909			1,647			15.9	%
Mortgage origination revenue		20,273			18,666			8.6	%
Securities gains (losses)		44			1			n/m
Other income		1,122			605			85.5	%
Total noninterest income		23,348			20,919			11.6	%
Noninterest expense
Salaries and employee benefits		15,371			13,481			14.0	%
Net occupancy expense		1,371			1,099			24.7	%
Equipment expense		1,441			1,303			10.6	%
Postage expense		4,476			4,491			-0.3	%
Advertising		3,711			3,494			6.2	%
Other expenses		5,438			4,907			10.8	%
Total noninterest expense		31,808			28,775			10.5	%
Income before income taxes		12,929			11,847			9.1	%
Income taxes		4,129			3,596			14.8	%
Net income	$	8,800		$	8,251			6.7	%
Per Share Data
Basic earnings	$	1.24		$	1.17			6.0	%
Diluted earnings	$	1.22		$	1.16			5.2	%
Average shares outstanding
Basic		7,082,418			7,022,635			0.9	%
Diluted		7,207,937			7,129,416			1.1	%
Performance Ratios
Return on average equity		16.85	%		18.31	%		-8.0	%
Return on average assets		1.25	%		1.33	%		-6.0	%
Net yield on earning assets - taxable equivalent		3.55	%		3.65	%		-2.7	%
Efficiency ratio consolidated(A)		67.41	%		67.61	%		-0.3	%
Efficiency ratio excluding mortgage banking (A)		53.62	%		51.93	%		3.3	%

NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
	For the Quarter Ended
Dollars in thousands, except per share amounts	9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004
Condensed Statements of Income
Interest income
Loans, including fees	$	12,527		$	11,205		$	10,010		$	9,814		$	9,334
Securities		2,283			2,291			2,258			2,294			2,267
Other		27			28			25			30			33
Total interest income		14,837			13,524			12,293			12,138			11,634
Interest expense
Deposits		3,509			2,926			2,516			2,456			2,451
Borrowings		3,518			2,994			2,622			2,366			2,122
Total interest expense		7,027			5,920			5,138			4,822			4,573
Net interest income		7,810			7,604			7,155			7,316			7,061
Provision for loan losses		424			425			330			292			293
Net interest income after provision
for loan losses		7,386			7,179			6,825			7,024			6,768
Noninterest income
Service fee income		711			651			547			592			575
Mortgage origination revenue		7,304			7,113			5,856			5,423			7,732
Securities gains (losses)		39			5			-			32			(35	)
Other income		411			446			264			287			273
Total noninterest income		8,465			8,215			6,667			6,334			8,545
Noninterest expense
Salaries and employee benefits		5,435			5,394			4,542			4,607			5,055
Net occupancy expense		479			463			429			404			408
Equipment expense		465			483			493			473			433
Postage expense		1,451			1,458			1,567			1,361			1,703
Advertising		1,164			1,222			1,325			1,231			1,229
Other expenses		1,884			1,855			1,699			1,939			1,939
Total noninterest expense		10,878			10,875			10,055			10,015			10,767
Income before income taxes		4,973			4,519			3,437			3,343			4,546
Income taxes		1,700			1,403			1,026			986			1,420
Net income	$	3,273		$	3,116		$	2,411		$	2,357		$	3,126
Per Share Data
Basic earnings	$	0.46		$	0.44		$	0.34		$	0.34		$	0.44
Diluted earnings	$	0.45		$	0.43		$	0.34		$	0.33		$	0.44
Average shares outstanding
Basic		7,125,483			7,081,044			7,039,783			7,032,512			7,026,173
Diluted		7,211,331			7,205,377			7,171,099			7,187,711			7,174,859
Performance Ratios
Return on average equity		18.24	%		18.21	%		14.53	%		14.33	%		20.06	%
Return on average assets		1.33	%		1.34	%		1.08	%		1.07	%		1.46	%
Net yield on earning assets - taxable equivalent		3.47	%		3.61	%		3.59	%		3.69	%		3.65	%
Efficiency ratio consolidated (A)		65.40	%		66.98	%		70.26	%		70.50	%		67.11	%
Efficiency ratio excluding mortgage banking (A)		53.75	%		54.15	%		52.90	%		52.70	%		51.68	%

NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Segment Information
For the Quarter Ended September 30, 2005
	Community			Mortgage			Parent
Dollars in thousands	Banking			Banking			and Other			Eliminations			Total
Condensed Statements of Income
Interest income	$	14,619		$	516		$	7		$	(305	)	$	14,837
Interest expense		6,805			304			223			(305	)		7,027
Net interest income		7,814			212			(216	)		-			7,810
Provision for loan losses		360			64			-			-			424
Net interest income after provision
for loan losses		7,454			148			(216	)		-			7,386
Noninterest income		1,012			7,304			1,362			(1,213	)		8,465
Noninterest expense		4,437			5,969			1,685			(1,213	)		10,878
Income before income taxes		4,029			1,483			(539	)		-			4,973
Income taxes		1,277			578			(155	)		-			1,700
Net income	$	2,752		$	905		$	(384	)	$	-		$	3,273
Intersegment revenue (expense)	$	(841	)	$	(364	)	$	1,205		$	-		$	-
Average assets	$	974,653		$	24,144		$	85,012		$	(98,603	)	$	985,206

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Segment Information
For the Quarter Ended September 30, 2004
	Community			Mortgage			Parent
Dollars in thousands	Banking			Banking			and Other			Eliminations			Total
	��
Condensed Statements of Income
Interest income	$	11,399		$	421		$	5		$	(191	)	$	11,634
Interest expense		4,436			189			139			(191	)		4,573
Net interest income		6,963			232			(134	)		-			7,061
Provision for loan losses		293			-			-			-			293
Net interest income after provision
for loan losses		6,670			232			(134	)		-			6,768
Noninterest income		700			7,732			1,147			(1,034	)		8,545
Noninterest expense		3,880			6,585			1,336			(1,034	)		10,767
Income before income taxes		3,490			1,379			(323	)		-			4,546
Income taxes		1,064			479			(123	)		-			1,420
Net income	$	2,426		$	900		$	(200	)	$	-		$	3,126
Intersegment revenue (expense)	$	(792	)	$	(234	)	$	1,026		$	-		$	-
Average assets	$	829,522		$	20,185		$	75,311		$	(67,515	)	$	857,503

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Segment Information
For the Nine Months Ended September 30, 2005
	Community			Mortgage			Parent
Dollars in thousands	Banking			Banking			and Other			Eliminations			Total
Condensed Statements of Income
Interest income	$	40,151		$	1,303		$	19		$	(820	)	$	40,653
Interest expense		17,501			816			588			(820	)		18,085
Net interest income		22,650			487			(569	)		-			22,568
Provision for loan losses		1,035			144			-			-			1,179
Net interest income after provision
for loan losses		21,615			343			(569	)		-			21,389
Noninterest income		2,606			20,273			4,041			(3,572	)		23,348
Noninterest expense		13,007			17,622			4,751			(3,572	)		31,808
Income before income taxes		11,214			2,994			(1,279	)		-			12,929
Income taxes		3,527			1,108			(506	)		-			4,129
Net income	$	7,687		$	1,886		$	(773	)	$	-		$	8,800
Intersegment revenue (expense)	$	(2,568	)	$	(981	)	$	3,549		$	-		$	-
Average assets	$	926,954		$	22,471		$	82,157		$	(94,014	)	$	937,568

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Segment Information
For the Nine Months Ended September 30, 2004
	Community			Mortgage			Parent
Dollars in thousands	Banking			Banking			and Other			Eliminations			Total
Condensed Statements of Income
Interest income	$	33,095		$	930		$	11		$	(437	)	$	33,599
Interest expense		12,790			432			353			(437	)		13,138
Net interest income		20,305			498			(342	)		-			20,461
Provision for loan losses		758			-			-			-			758
Net interest income after provision
for loan losses		19,547			498			(342	)		-			19,703
Noninterest income		2,065			18,664			3,032			(2,842	)		20,919
Noninterest expense		11,299			16,600			3,718			(2,842	)		28,775
Income before income taxes		10,313			2,562			(1,028	)		-			11,847
Income taxes		3,114			885			(403	)		-			3,596
Net income	$	7,199		$	1,677		$	(625	)	$	-		$	8,251
Intersegment revenue (expense)	$	(2,266	)	$	(562	)	$	2,828		$	-		$	-
Average assets	$	805,533		$	15,376		$	72,352		$	(64,724	)	$	828,537

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data
Dollars in thousands, except per share amounts	9/30/2005		6/30/2005		3/31/2005		12/31/2004		9/30/2004
Assets	$	1,029,103	$	946,487	$	907,264	$	889,489	$	862,246
Securities		215,757		209,561		209,223		211,362		209,702
Loans held for sale		12,695		16,994		15,766		14,274		12,097
Loans, net		729,431		659,792		623,863		602,728		586,201
Intangible assets		3,385		3,423		3,461		3,499		3,537
Deposits		628,919		565,167		537,412		524,614		535,822
Short-term borrowings		139,681		127,974		129,697		120,629		77,518
Long-term borrowings and
subordinated debentures		179,383		176,796		165,384		172,201		178,334
Shareholders' equity		72,429		69,838		66,400		65,708		65,289
Book value per share	$	10.16	$	9.80	$	9.43	$	9.33	$	9.29

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Portfolio Loan Composition
Dollars in thousands	9/30/2005		6/30/2005		3/31/2005		12/31/2004		9/30/2004
Commercial	$	60,723	$	59,067	$	56,394	$	53,226	$	49,630
Commercial real estate		376,506		328,071		296,911		279,631		271,097
Residential construction		4,125		3,815		3,806		3,916		3,351
Residential mortgage		249,383		229,769		226,866		223,689		218,118
Consumer		37,431		36,993		37,066		38,948		40,559
Other		8,824		9,233		9,458		9,605		9,784
Total loans		736,992		666,948		630,501		609,015		592,539
Less unearned fees and interest		1,640		1,459		1,322		1,214		1,200
Total loans net of unearned fees and interest		735,352		665,489		629,179		607,801		591,339
Less allowance for loan losses		5,921		5,697		5,316		5,073		5,138
Loans, net	$	729,431	$	659,792	$	623,863	$	602,728	$	586,201

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands	9/30/2005		6/30/2005		3/31/2005		12/31/2004		9/30/2004
Non interest bearing checking	$	69,346	$	63,207	$	57,008	$	55,402	$	50,885
Interest bearing checking		169,893		145,626		134,500		122,355		123,687
Savings		45,868		47,407		50,647		50,428		51,616
Retail time deposits		236,396		231,645		240,541		243,161		258,184
Brokered time deposits		107,416		77,282		54,716		53,268		51,450
Total deposits	$	628,919	$	565,167	$	537,412	$	524,614	$	535,822

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Mortgage Banking Segment Loan Activity
	For the Quarter Ended
Dollars in thousands	9/30/2005		6/30/2005		3/31/2005		12/31/2004		9/30/2004
Loans originated
Amount	$	83,860	$	83,616	$	68,929	$	65,983	$	75,791
Number		1,567		1,578		1,308		1,182		1,532
Loans sold
Amount	$	87,071	$	81,422	$	66,761	$	62,043	$	79,927
Number		1,566		1,549		1,295		1,148		1,610

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
	For the Quarter Ended
Dollars in thousands	9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004
Net loan charge-off's	$	200		$	44		$	87		$	357		$	107
Net loan charge-off's to average loans (annualized)		0.11	%		0.03	%		0.05	%		0.25	%		0.08	%
Allowance for loan losses	$	5,921		$	5,697		$	5,316		$	5,073		$	5,138
Allowance for loan losses as a percentage
of period end loans		0.79	%		0.83	%		0.82	%		0.82	%		0.85	%
Nonperforming assets:
Nonperforming loans	$	1,017		$	911		$	836		$	672		$	1,465
Foreclosed properties and
repossessed assets		862			949			608			646			809
Nonaccrual securities		-			326			334			349			363
Total	$	1,879		$	2,186		$	1,778		$	1,667		$	2,637
Nonperforming loans to period end loans		0.14	%		0.13	%		0.13	%		0.11	%		0.24	%
Nonperforming assets to period end assets		0.18	%		0.23	%		0.20	%		0.19	%		0.31	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q3 2005 vs Q3 2004
	Q3 2005								Q3 2004
	Average			Earnings /		Yield /			Average			Earnings /		Yield /
Dollars in thousands	Balances			Expense		Rate			Balances			Expense		Rate
ASSETS
Interest earning assets
Loans, net of unearned interest
Taxable	$	705,784		$	12,423		6.98	%	$	585,400		$	9,217		6.30	%
Tax-exempt		8,643			157		7.21	%		9,472			176		7.43	%
Securities
Taxable		164,390			1,750		4.22	%		163,866			1,721		4.20	%
Tax-exempt		47,750			798		6.63	%		48,131			817		6.79	%
Interest bearing deposits other banks										-
and Federal funds sold		2,726			28		4.08	%		3,718			33		3.55	%
Total interest earning assets		929,293			15,156		6.47	%		810,587			11,964		5.90	%
Noninterest earning assets
Cash & due from banks		19,124								15,675
Premises & equipment		20,759								20,539
Other assets		21,842								15,756
Allowance for loan losses		(5,812	)							(5,054	)
Total assets	$	985,206							$	857,503
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	153,329		$	843		2.18	%	$	123,092		$	309		1.00	%
Savings deposits		46,226			77		0.66	%		50,904			63		0.50	%
Time deposits		320,708			2,589		3.20	%		310,398			2,079		2.68	%
Short-term borrowings		142,240			1,315		3.67	%		72,666			317		1.74	%
Long-term borrowings and
subordinated debentures		178,145			2,203		4.91	%		177,188			1,805		4.07	%
		840,648			7,027		3.32	%		734,248			4,573		2.49	%
Noninterest bearing liabilities
Demand deposits		65,449								55,737
Other liabilities		7,338								5,189
Total liabilities		913,435								795,174
Shareholders' equity		71,771								62,329
Total liabilities and
shareholders' equity	$	985,206							$	857,503
NET INTEREST EARNINGS				$	8,129							$	7,391
NET INTEREST YIELD ON EARNING ASSETS							3.47	%							3.65	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2005 vs YTD 2004
	For the Nine Months Ended September 30,
	2005								2004
	Average			Earnings /		Yield /			Average			Earnings /		Yield /
Dollars in thousands	Balances			Expense		Rate			Balances			Expense		Rate
ASSETS
Interest earning assets
Loans, net of unearned interest
Taxable	$	663,287		$	33,421		6.74	%	$	554,819		$	26,069		6.26	%
Tax-exempt		8,884			485		7.30	%		8,628			489		7.56	%
Securities
Taxable		162,852			5,229		4.29	%		167,446			5,459		4.35	%
Tax-exempt		47,984			2,402		6.69	%		48,344			2,468		6.81	%
Interest bearing deposits other banks
and Federal funds sold		2,766			79		3.82	%		3,543			97		3.65	%
Total interest earning assets		885,773			41,616		6.28	%		782,780			34,582		5.89	%
Noninterest earning assets
Cash & due from banks		16,567								13,269
Premises & equipment		20,730								19,803
Other assets		20,008								17,577
Allowance for loan losses		(5,510	)							(4,892	)
Total assets	$	937,568							$	828,537
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	141,168		$	1,868		1.77	%	$	119,403		$	841		0.94	%
Savings deposits		48,699			235		0.65	%		49,234			174		0.47	%
Time deposits		308,334			6,849		2.97	%		307,334			6,240		2.71	%
Short-term borrowings		131,459			3,124		3.18	%		63,120			692		1.46	%
Long-term borrowings and
subordinated debentures		171,300			6,009		4.69	%		171,350			5,192		4.04	%
		800,960			18,085		3.02	%		710,441			13,139		2.47	%
Noninterest bearing liabilities
Demand deposits		60,252								52,631
Other liabilities		6,707								5,372
Total liabilities		867,919								768,444
Shareholders' equity		69,649								60,093
Total liabilities and
shareholders' equity	$	937,568							$	828,537
NET INTEREST EARNINGS				$	23,531							$	21,443
NET INTEREST YIELD ON EARNING ASSETS							3.55	%							3.65	%