Summit Financial 8-K Summit Financial Corporation Reports

EXHIBIT 99

NEWS RELEASE

DATE:   October 21, 2003

RELEASE DATE: Immediate

SUMMIT FINANCIAL CORPORATION REPORTS

INCREASE IN THIRD QUARTER EARNINGS

GREENVILLE, SC -Summit Financial Corporation (NASDAQ/Small Cap: SUMM) today reported net income of $970,000 for the quarter ended September 30, 2003, up from $909,000 for the same period of 2002. Net income per diluted share was $0.21 for the third quarter of 2003, up 5% from $0.20 for the third quarter of 2002. For the first nine months of 2003 net income increased to $2,938,000 or $0.64 per diluted share, up 16% from $2,481,000 or $0.55 per diluted share for the comparable period of 2002. For the nine months ended September 30, 2003, return on assets was 1.24%, as compared to 1.16% the prior year, while return on equity increased to 12.96% for the same period.

The primary factors in the increased earnings for both the third quarter and the first nine months of 2003 were the increase in net interest income related to earning asset growth and the continued reduction in cost of funds, the decrease in provision for loan losses due to lower net originations in 2003, and the higher amount of gains on sales of securities during 2003. Somewhat offsetting the increase in income is higher overhead expenses, the major component being a loss of $166,000 from the prepayment of higher cost FHLB advances employed as a strategy to reduce future cost of funds.

At September 30, 2003, assets totaled $325.1 million, a 9% increase from $298.5 million at September 30, 2002. Investment securities increased 43% to $79.5 million, and gross loans increased 6% from the comparable period of 2002 to total $223.4 million. Deposits grew 5% during the period reaching $248.7 million at September 30, 2003, while FHLB advances increased to $43.1 million.

Loans past due in excess of 90 days were $169,000 or 0.08% of outstanding loans at September 30, 2003, compared to $216,000 or 0.10% of loans for the prior year. Nonaccrual loans at September 30, 2003 and 2002 totaled $527,000 or 0.24% and $203,000 or 0.09% of total loans, respectively. Net charge-offs for the first nine months of 2003 were $354,000 versus $332,000 for the prior year; while the allowance for loan losses was 1.57% and 1.50%, respectively at September 30, 2003 and 2002.

The Company reported total equity of $31.1 million, which represents a total risk-based capital ratio in excess of 14% at September 30, 2003. Book value per share was up 10% from the comparable period of 2002 to end the third quarter of 2003 at $7.62.

SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
($ in thousands, except per share data)
(Unaudited)
	For the Quarter Ended
	September 30,						Percent
Income Statement Data	2003			2002			Change
Net interest income	$	3,073		$	2,953			4	%
Provision for loan losses		100			196			(49	%)
Noninterest income		758			682			11	%
Noninterest expenses		2,316			2,106			10	%
Net income		970			909			7	%
Basic net income per share	$	0.24		$	0.23			4	%
Diluted net income per share	$	0.21		$	0.20			5	%
Return on average assets		1.19	%		1.23	%		(3	%)
Return on average equity		12.40	%		13.36	%		(7	%)
Net interest margin		4.13	%		4.35	%		(5	%)
	For the Nine Months Ended
	September 30,							Percent
Income Statement Data		2003			2002			Change
Net interest income	$	9,095		$	8,720			4	%
Provision for loan losses		502			546			(8	%)
Noninterest income		2,374			2,025			17	%
Noninterest expenses		6,687			6,557			2	%
Net income		2,938			2,481			18	%
Basic net income per share	$	0.73		$	0.62			18	%
Diluted net income per share	$	0.64		$	0.55			16	%
Return on average assets		1.24	%		1.16	%		7	%
Return on average equity		12.96	%		12.84	%		1	%
Net interest margin		4.15	%		4.45	%		(7	%)
	September 30,							Percent
Balance Sheet Data		2003			2002			Change
Total earning assets		309,337			283,038			9	%
Net loans		219,920			206,802			6	%
Investment securities		79,489			55,560			43	%
Total deposits		248,710			235,759			5	%
Total interest-bearing liabilities		260,516			235,511			11	%
Shareholders' equity		31,147			27,804			12	%
Book value	$	7.62		$	6.95			10	%
Net charge-offs to average loans		0.21	%		0.21	%		0	%
Allowance for loan losses to gross loans		1.57	%		1.50	%		5	%
Tier 1 risk-based capital ratio		12.85	%		11.84	%		9	%
Total risk-based capital ratio		14.10	%		13.09	%		8	%
Leverage ratio		9.85	%		9.47	%		4	%
Note - Per share data restated for all 5% stock dividends

SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
(Unaudited)
	September 30,			September 30,
	2003			2002
ASSETS
Cash and due from banks	$	7,705		$	9,235
Interest-bearing bank balances		2,859			5,366
Federal funds sold		1,009			10,074
Investments available for sale		79,489			55,560
Loans, net of unearned income		223,437			209,955
Less: allowance for loan losses		(3,517	)		(3,153	)
Net loans		219,920			206,802
Premises and equipment, net		4,066			4,274
Other assets		10,069			7,195
	$	325,117		$	298,506
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	$	31,294		$	32,648
Interest-bearing demand		22,734			20,490
Savings and money market		72,308			71,131
Time deposits, $100,000 and over		66,959			53,576
Other time deposits		55,415			57,914
		248,710			235,759
FHLB advances		43,100			32,400
Other liabilities		2,160			2,543
Total liabilities		293,970			270,702
Shareholders' equity:
Common stock, $1.00 par value;
20,000,000 shares authorized; issued and
outstanding 4,089,180 shares		4,089			3,811
Additional paid-in capital		21,606			18,482
Retained earnings		5,800			4,860
Accumulated other comprehensive
(loss) income, net		(312	)		738
Nonvested restricted stock		(36	)		(87	)
Total shareholders' equity		31,147			27,804
	$	325,117		$	298,506

SUMMIT FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENTS
($ in thousands, except per share data)
(Unaudited)
	For the Quarter Ended				For the Nine Months Ended
	September 30,				September 30,
	2003		2002		2003		2002
Interest Income:
Interest on loans	$	3,447	$	3,791	$	10,573	$	11,325
Interest on investment securities		797		653		2,326		1,914
Other interest income		36		71		134		193
		4,280		4,515		13,033		13,432
Interest Expense:
Interest on deposits		822		1,175		2,713		3,532
Other interest expense		385		387		1,225		1,180
		1,207		1,562		3,938		4,712
Net interest income		3,073		2,953		9,095		8,720
Provision for loan losses		100		196		502		546
Net interest income after provision		2,973		2,757		8,593		8,174
Noninterest income:
Service charges on deposit accounts		143		136		417		407
Credit card fees and income		101		107		304		343
Insurance sales commissions		119		119		333		479
Gain on sale of securities		12		39		367		85
Other income		383		281		953		711
		758		682		2,374		2,025
Noninterest expenses:
Salaries, wages and benefits		1,284		1,281		3,877		3,982
Occupancy		168		164		501		483
Furniture, fixtures and equipment		163		176		483		524
Other operating expenses		701		485		1,826		1,568
		2,316		2,106		6,687		6,557
Income before income taxes		1,415		1,333		4,280		3,642
Provision for income taxes		445		424		1,342		1,161
Net income	$	970	$	909	$	2,938	$	2,481
Net income per common share:
Basic	$	0.24	$	0.23	$	0.73	$	0.62
Diluted	$	0.21	$	0.20	$	0.64	$	0.55
Average diluted common equivalent
shares outstanding		4,613,000		4,556,000		4,593,000		4,502,000

      Summit Financial Corporation,www.summit-bank.com, headquartered in Greenville, SC, is the parent holding company for Summit National Bank and Freedom Finance, Inc., a consumer finance company. Summit National Bank provides a full range of banking services designed to meet substantially all of the financial needs of its customers from its four full-service branches in the Upstate of South Carolina. Through its subsidiary, Summit Investment Services, Inc., Summit provides nondeposit investments and financial management services. Freedom Finance specializes in making small dollar installment loans to individuals from 11 branch locations throughout South Carolina.

Certain matters set forth in this news release may contain forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. For discussion of certain factors that may cause such forward-looking statements to differ materiallyfrom the Company's actual results, see the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

CONTACTS:

 J. Randolph Potter, President & CEO, (864) 240-5886

 Blaise B. Bettendorf, Chief Financial Officer, (864) 240-5890