Summit Financial 8-K Financial statements and exhibits

EXHIBIT 99

NEWS RELEASE

DATE:April 20, 2004

RELEASE DATE:Immediate

SUMMIT FINANCIAL CORPORATION REPORTS

FIRST QUARTER NET INCOME UP 9%

GREENVILLE, SC -- Summit Financial Corporation (NASDAQ/Small Cap: SUMM) today reported net income of $987,000 for the first quarter of 2004, an increase of 9% from $909,000 for the first quarter of 2003. Net income per diluted share was $0.20 for the first three months of 2004, compared to $0.19 for the first three months of 2003. The net income reported for the first quarter of 2004 resulted in return on assets and return on equity of 1.18% and 12.00%, respectively.

J. Randolph Potter, President and CEO, said, “We are pleased to report strong earnings for the first quarter of 2004. Our performance reflects the Company’s focus on balance sheet and interest rate risk management, maintaining strong credit quality and providing superior products and services to our customers. We have continued to reduce our cost of funds, control overhead expenses, and sought new sources of noninterest income, which are strategies that have proven effective in improving the Company’s profitability.”

The primary contributor to the increase in net income for the first quarter of 2004 was the 10% increase in net interest income, driven by a 9% increase in average earning assets. Also contributing to the higher net income is management’s strong control of overhead expenses, which increased only 1% for the first quarter of 2004 from the comparable quarter of 2003 while total assets increased 5% between the two periods. These factors, resulting in higher net income, were somewhat offset by a reduction in other income, primarily in the amount of gain on sale of investment securities for the quarter ended March 31, 2004 as compared to the prior year.

At March 31, 2004, assets totaled $339.0 million, up from $323.2 million at March 31, 2003. Loans accounted for a majority of the asset growth, increasing 9% during the period, and ended the first quarter of 2004 at $240.2 million. Investment securities, the second largest earning asset, totaled $70.5 million at March 31, 2004. Asset growth was funded primarily by the reduction in liquidity and increases in FHLB borrowings. Deposits totaled $248.5 million at March 31, 2004, while total FHLB borrowings were $53.6 million. Mr. Potter commented, “The increase in loan demand experienced during the first quarter of 2004 is a tangible sign of an improving economy. We are cautiously optimistic that this trend will continue and lead to a higher level of loans outstanding thereby enhancing future earnings.”

Management continues its diligent focus on maintaining a quality loan portfolio and improving the level of classified and nonperforming loans. The Company reported net recoveries of previously charged-off loans totaling $52,000 for the first quarter of 2004, compared to net recoveries for the prior year period of $2,000. Loans past due in excess of 90 days at March 31, 2004 decreased to $144,000 or 0.06% of gross loans from $170,000 or 0.07% at December 31, 2003 and were reported at $171,000 at March 31, 2003. Total nonperforming assets at March 31, 2004 declined to $651,000 or 0.27% of gross loans plus OREO, compared to $712,000 or 0.31% at December 31, 2003, and $604,000 or 0.28% at March 31, 2003. The allowance for loan losses was 1.54%, 1.48%, and 1.62% at March 31, 2004, December 31, 2003, and March 31, 2003, respectively.

The Company ended the first quarter of 2004 with total equity of $34.3 million, a 15% increase from the prior year, and total risk-based capital of 14.3%. Book value per share was up 11% from the comparable period of 2003, to end the first quarter of 2004 at $7.77.

SUMMIT FINANCIAL CORPORATION
Financial Highlights
(dollars in thousands, except per share data)
(Unaudited)
		For the Quarters Ended March 31,					Percent
Income Statement Data		2004			2003		Change
Net interest income	$	3,264		$	2,961		10	%
Provision for loan losses		210			173		21	%
Noninterest income		620			761		(19	%)
Noninterest expenses		2,242			2,223		1	%
Provision for income taxes		445			417		7	%
Net income		987			909		9	%
Per share data (1):
Basic net income	$	0.23		$	0.22		5	%
Diluted net income	$	0.20		$	0.19		5	%
Book value	$	7.77		$	6.98		11	%
Average diluted shares outstanding		4,857,000			4,781,000		2	%
		March 31,��					Percent
Balance Sheet Data		2004			2003		Change
Total assets	$	338,968		$	323,222		5	%
Total earning assets		323,356			306,126		6	%
Gross loans		240,193			219,424		9	%
Allowance for loan losses		3,699			3,545		4	%
Investment securities		70,477			70,952		(1	%)
Total deposits		248,512			249,243		0	%
Total interest-bearing liabilities		264,762			255,346		4	%
Shareholders' equity		34,283			29,738		15	%
		March 31,					Percent
Selected Ratios		2004			2003		Change
Return on average assets		1.18	%		1.20	%	(2	%)
Return on average equity		12.00	%		12.58	%	(5	%)
Net interest margin		4.26	%		4.24	%	0	%
Tier 1 risk-based capital ratio		13.06	%		12.15	%	7	%
Total risk-based capital ratio		14.30	%		13.41	%	7	%
Leverage ratio		10.02	%		9.49	%	6	%
Net (recoveries) charge-offs to average loans		(0.09	%)		(0.00	%)	100	%
Nonperforming assets to loans plus OREO		0.27	%		0.28	%	(4	%)
Allowance for loan losses to gross loans		1.54	%		1.62	%	(5	%)
		March 31,					Percent
Stock Performance, at period end		2004			2003		Change
Closing market price (1)	$	18.50		$	14.87		24	%
Shares traded - quarter (1)		50,170			171,972		(71	%)
Price/book ratio		2.38			2.13		12	%
Price/earnings ratio (per diluted earnings per share)		23.1			19.6		18	%
Market capitalization	$	81,653,000		$	60,302,000		35	%
Shares outstanding		4,413,686			4,055,257		9	%
(1) Restated to reflect all 5% stock dividends.

SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(Unaudited)
	March 31,			March 31,
	2004			2003
ASSETS
Cash and due from banks	$	8,290		$	11,332
Interest-bearing bank balances		3,381			4,584
Federal funds sold		6,235			8,543
Investments available for sale		70,477			70,952
Loans, net of unearned income and allowance for loan losses		236,494			215,879
Premises and equipment, net		4,031			4,151
Other assets		10,060			7,781
	$	338,968		$	323,222
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	$	37,384		$	35,597
Interest-bearing demand		23,158			25,941
Savings and money market		74,901			70,814
Time deposits, $100,000 and over		60,406			58,092
Other time deposits		52,663			58,799
		248,512			249,243
FHLB advances		53,634			41,700
Other liabilities		2,539			2,541
Total liabilities		304,685			293,484
Shareholders' equity:
Common stock, $1.00 par value; 20,000,000 shares authorized; issued and
outstanding 4,413,686 and 4,055,257 shares		4,414			4,055
Additional paid-in capital		26,356			21,482
Retained earnings		3,090			3,771
Accumulated other comprehensive income, net		691			479
Nonvested restricted stock		(268	)		(49	)
Total shareholders' equity		34,283			29,738
	$	338,968		$	323,222

SUMMIT FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENTS
(dollars in thousands, except per share data)
(Unaudited)
	For the Three Months Ended March 31,
			2004		2003
Interest Income:
Interest on loans		$	3,538	$	3,572
Interest on investment securities			872		697
Other interest income			33		60
			4,443		4,329
Interest Expense:
Interest on deposits			763		951
Other interest expense			416		417
			1,179		1,368
Net interest income			3,264		2,961
Provision for loan losses			210		173
Net interest income after provision			3,054		2,788
Noninterest income:
Service charges on deposit accounts			133		137
Merchant and credit card fees			102		100
Insurance sales commissions			139		98
Gain on sale of securities			22		174
Other income			224		252
			620		761
Noninterest expense:
Salaries, wages and benefits			1,361		1,314
Occupancy			174		169
Furniture, fixtures and equipment			158		160
Other operating expenses			549		580
			2,242		2,223
Income before income taxes			1,432		1,326
Provision for income taxes			445		417
Net income		$	987	$	909
Net income per common share:
Basic		$	0.23	$	0.22
Diluted		$	0.20	$	0.19
Average diluted shares outstanding			4,857,000		4,781,000

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 materially from the Company's actual results, see the Company's Annual Report on Form 10-K for the year ended December 31, 2003.

CONTACTS:

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

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