8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: July 12, 2004

SUMMIT BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Texas	0-11986	75-1694807
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer ID No.)
3880 Hulen Street, Fort Worth, Texas 76107
(Address of principal executive offices)
(817) 336-6817
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)

ITEM 1.	CHANGES IN CONTROL OF REGISTRANT
	Not Applicable
ITEM 2.	ACQUISITION OR DISPOSITION OF ASSETS
	Not Applicable
ITEM 3.	BANKRUPTCY OR RECEIVERSHIP
	Not Applicable
ITEM 4.	CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT
	Not Applicable
ITEM 5.	OTHER EVENTS
	Not Applicable
ITEM 6.	RESIGNATIONS OF REGISTRANT’S DIRECTORS
	Not Applicable
ITEM 7.	FINANCIAL STATEMENTS AND EXHIBITS
	Not Applicable
ITEM 8.	CHANGE IN FISCAL YEAR
	Not Applicable
ITEM 9.	REGULATION F D DISCLOSURE
	See Item 12

ITEM 10.	AMENDMENTS TO THE REGISTRANT’S CODE OF ETHICS, OR WAIVER OF A PROVISION OF THE CODE OF ETHICS
	Not Applicable
ITEM 11.	TEMPORARY SUSPENSION OF TRADING UNDER REGISTRANT’S EMPLOYEE BENEFIT PLANS
	Not Applicable
ITEM 12.	RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 12, 2004, Summit Bancshares, Inc. (“Summit Bancshares”) issued a press release announcing its earnings for the second quarter of 2004.  A copy of Summit Bancshares’ press release is attached hereto as Exhibit 99.1.  The press release is incorporated by reference into this Item 12 and the foregoing description of the press release is qualified in its entirety by reference to this exhibit.

SIGNATURE

          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.
DATE:  July 12, 2004	By:	/s/  BOB G. SCOTT
		Bob G. Scott, Chief Operating Officer

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
99.1	Press Release dated July 12, 2004

EX-99

N E W S from Summit Bancshares, Inc.

For Immediate Release	For Information Contact:
July 12, 2004	Bob G. Scott, COO
	(817) 877-2660

SUMMIT BANCSHARES REPORTS
SECOND QUARTER 2004 EARNINGS

Fort Worth, Texas - Summit Bancshares, Inc. (NASDAQ: SBIT), a community-oriented bank holding company in Fort Worth, reported second quarter earnings today.  Philip E. Norwood, Chairman, President and Chief Executive Officer stated, “The acquisition of Arlington National Bank, Arlington, Texas, was completed effective May 1^st.  This acquisition brings with it four banking locations and, as of June 30^th, deposits of $99.7 million and loans of $60.2 million.  The acquisition plus the internal growth of the Company has resulted in the Company’s assets reaching $970 million as of the end of the quarter, a $231 million or 31% increase in the last twelve months.  During the second quarter, we also opened a new branch in Euless, Texas.  To manage this location we were able to hire the former CEO of an independent bank that was purchased by an out of state regional bank.  Expanding into the Arlington & Euless markets has been a top priority for Summit for the last several years.  The addition of Arlington National Bank and the Euless branch gives us an immediate resource in these markets as we expand our branches throughout Tarrant County.”

He further stated, “Earnings per diluted share for the quarter increased 5.1% compared to the same quarter last year.  The second quarter results reflect the acquisition of Arlington National following purchase accounting rules, therefore you will note double digit increases in most of the categories of income and expense when comparing this quarter’s results to prior quarters.  However, after considering the accounting impacts of the acquisition, the Company had a positive quarter of growth and earnings performance.”

Results of Operations

For the quarter ended June 30, 2004, net income was $2,596,000 compared to $2,457,000 for the same period in 2003.  Net income per diluted share was $0.41 for the three months ended June 30, 2004, compared to $0.39 for the three months ended June 30, 2003.  Return on average assets and return on average shareholders’ equity for the second quarter of 2004 were 1.13% and 14.79%, respectively.  The Company’s average shareholders’ equity-to-assets ratio was 7.6% for the quarter ended June 30, 2004.  The Arlington National acquisition was partially financed with a $12 million Trust Preferred issue giving the Company a Tier One capital ratio of 9.9%. 

Net income for the six months ended June 30, 2004 was $5,047,000 or $0.80 per diluted share, compared to $4,890,000, or $0.78 per diluted share for the same period last year.  Return on average assets and return on average shareholders’ equity for the six months ended June 30, 2004 were 1.17% and 14.43%, respectively.

Financial Results

Net interest income for the second quarter of 2004 was $9.0 million compared to $7.6 million in the second quarter of last year.  The increase reflects the inclusion of Arlington National’s financial results for two months.  Since the Company is somewhat more sensitive to market interest rate changes than other community banks due to its heavier commercial lending focus, the net interest margin declined to 4.18% for the quarter compared to 4.53% for the second quarter of the prior year.  In addition, the net interest margin for the second quarter was positively impacted by a modest decline in cost of interest-bearing deposits, contributed to by Arlington National’s deposit base, and was negatively impacted by:  a) a higher level of  liquidity in the quarter in anticipation of rising interest rates with short-term investments averaging $31.2 million for the quarter; b) a continuing decline in yields on investment securities and loans as fixed rate securities and loans repriced in the lower interest rate environment; and c) a higher cost of other borrowings reflecting an increase in Federal Home Loan Bank borrowing and the cost of financing the Arlington National acquisition.

Also, the current low interest rate environment has had a negative impact on net interest income for that portion of earning assets supported by the Company’s high levels of non-interest bearing deposits and shareholders’ equity, as compared to results from periods when market interest rates were higher.  As market interest rates begin to rise, the Company believes that its current asset sensitive position will enhance earnings growth assuming deposit rates do not increase significantly faster than interest rates or earning assets.

Non-interest income increased $125,000 or 7.8% for the second quarter of 2004 compared to the same quarter in the prior year with positive increases in service charges on deposit accounts and increases in several other fee based services, including trust fees which is a new service being offered to the Company’s customers as a result of the Arlington acquisition.  These increases were somewhat offset by lower mortgage origination fees and investment brokerage fees.  Growth of non-interest income continues to be one of the areas of the Company’s focus.

Non-interest expenses for the second quarter increased $1,104,000 or 21.0% over the same quarter of the previous year.  This increase includes the impacts of:  a) the addition of Arlington National which contributed $764,000 of expense to the current quarter; and b) a full quarter of expense of opening the Hulen Branch in June of last year and the occupancy of the operations facility in May of last year.

The provision for loan losses was $400,000 in the second quarter of 2004.  This was an increase of $160,000 over the same quarter last year.  In the quarter, the Company had net loan charge-offs of $130,000.   The Allowance for Loan Losses as a percent of outstanding loans was 1.46% (or 1.53% net of the guaranteed portion of SBA loans and student guaranteed loans) at June 30, 2004 as compared to 1.48% at the end of the second quarter of 2003.  For the first six months of 2004, the Company recorded net charged-off loans of $199,000.

Non performing assets totaled $3.3 million ($2.2 million net of principal guaranteed by SBA) or 0.49% of loans and foreclosed assets at June 30, 2004, compared to $1.6 million or .32% at June 30, 2003.  The Allowance for Loan Losses was 348% of non-performing loans at June 30, 2004.  The Company continues to maintain positive measures of asset quality.

The Company’s loans were $673 million at June 30, 2004, an increase of $173 million, or 34.5%, from a year ago.  Deposits increased over the past year from $612 million to $776 million, an increase of $164 million, or 26.8%.  Shareholders’ equity at June 30, 2004 was $68.7 million, the same as one year ago but reflects change in the available-for-sale investment securities adjustment of $5.6 million which lowered shareholders’ equity.

The Company will host a conference call Tuesday, July 13^th at 10:30 a.m. (CT).  To access the live call, please call (800) 310-1961 and enter code 253991.  A toll free replay of the call will be available for two weeks beginning at 1:30 p.m. (CT), July 13, 2004 through midnight, July 27, 2004.  You may access this replay by calling (888) 203-1112 and entering code 253991.  Additional information regarding the Company is available on the Company’s website at www.summitbank.net.

Certain statements contained in this press release, which are not historical in nature, including statements regarding the Company’s and/or management’s intentions, strategies, beliefs, expectations, representations, plans, projections, or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions for forward-looking statements contained in such Act.  We are including this statement for purposes of invoking these safe harbor provisions.  Forward-looking statements are based on assumptions involving certain known and unknown risks and uncertainties, many of which are beyond the Company’s control, and other important factors that could cause actual results, performance or achievements to differ materially from the expectations expressed or implied by such forward-looking statements.  These risks and uncertainties are listed from time to time in the Company’s filings with the Securities and Exchange Commission, including but not limited to, those set forth under the heading “Factors That May Affect Future Results” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

Summit Bancshares, Inc. · 3880 Hulen, Ste. 300 · Fort Worth, Texas 76107
Telephone (817) 336-6817 · FAX (817) 877-2672 · Web Site: www.summitbank.net

SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands, except per share data)

	Quarter Ended June 30,				% Change			Six Months Ended June 30,				% Change
	2004		2003					2004		2003
EARNINGS SUMMARY
Interest income	$	11,302	$	9,547		18.4	%	$	21,501	$	18,798		14.4	%
Interest expense		2,274		1,934		17.6	%		4,190		3,750		11.7	%
Net interest income		9,028		7,613		18.6	%		17,311		15,048		15.0	%
Provision for loan losses		400		240		66.7	%		1,005		540		86.1	%
Service charges on deposits		1,078		890		21.1	%		1,984		1,649		20.3	%
Gain on sale of investment securities		—		12		-100.0	%		—		12		-100.0	%
Other income		645		696		-7.3	%		1,306		1,285		1.6	%
Salaries and benefits expense		3,772		3,090		22.1	%		7,140		5,995		19.1	%
Occupancy and equipment expense		1,117		842		32.7	%		2,050		1,564		31.1	%
Other expense		1,461		1,314		11.2	%		2,690		2,484		8.3	%
Earnings before income taxes		4,001		3,725		7.4	%		7,716		7,411		4.1	%
Provision for income taxes		1,405		1,268		10.8	%		2,669		2,521		5.9	%
Net earnings	$	2,596	$	2,457		5.7	%	$	5,047	$	4,890		3.2	%
Basic earnings per share	$	0.42	$	0.40		5.0	%	$	0.82	$	0.79		3.8	%
Basic weighted average shares outstanding		6,160		6,162					6,156		6,164
Diluted earnings per share	$	0.41	$	0.39		5.1	%	$	0.80	$	0.78		2.6	%
Diluted weighted average shares outstanding		6,319		6,311					6,332		6,294

	Average for Quarter Ended
	June 30, 2004		March 31, 2004		December 31, 2003		September 30, 2003		June 30, 2003
BALANCE SHEET SUMMARY
Total loans	$	642,935	$	573,862	$	537,635	$	503,936	$	499,545
Total investment securities		196,972		187,988		205,162		199,367		165,600
Earning assets		871,084		767,274		746,066		718,601		676,834
Total assets		925,830		808,009		788,426		761,278		719,070
Noninterest bearing deposits		207,815		179,396		184,106		176,478		170,234
Interest bearing deposits		521,812		454,352		450,401		452,325		429,420
Total deposits		729,628		633,748		634,507		628,803		599,654
Other borrowings		121,193		101,349		82,160		61,199		48,866
Shareholders’ equity		70,583		70,116		68,399		68,273		67,739

	Average for Six Months Ended June 30,				% Change
	2004		2003
BALANCE SHEET SUMMARY
Total loans	$	608,398	$	487,985		24.7	%
Total investment securities		192,480		168,091		14.5	%
Earning assets		819,179		662,593		23.6	%
Total assets		866,936		703,880		23.2	%
Noninterest bearing deposits		193,603		165,151		17.2	%
Interest bearing deposits		488,083		420,416		16.1	%
Total deposits		681,685		585,567		16.4	%
Other borrowings		111,271		48,442		129.7	%
Shareholders’ equity		70,350		67,000		5.0	%

	Ending Balance
	June 30, 2004			March 31, 2004			December 31, 2003			September 30, 2003			June 30, 2003
BALANCE SHEET SUMMARY
Total loans	$	672,686		$	593,271		$	553,769		$	517,994		$	500,040
Total investment securities		214,991			181,879			195,959			210,048			178,241
Total earning assets		905,228			818,393			751,063			728,766			693,257
Allowance for loan losses		(9,844	)		(8,320	)		(7,784	)		(7,483	)		(7,412	)
Premises and equipment		15,145			12,755			12,920			13,237			13,391
Total assets		969,708			860,361			795,478			777,558			738,916
Noninterest bearing deposits		218,343			186,198			192,877			180,765			176,603
Interest bearing deposits		557,347			470,186			448,504			456,706			435,143
Total deposits		775,690			656,384			641,381			637,471			611,746
Other borrowings		121,785			129,691			82,234			69,230			55,627
Total liabilities		901,009			788,786			726,794			709,546			670,187
Shareholders’ equity		68,699			71,575			68,684			68,012			68,729

SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands)

	June 30, 2004			March 31, 2004			December 31, 2003			September 30, 2003			June 30, 2003
NONPERFORMING ASSETS
Nonaccrual loans	$	2,832		$	2,405		$	2,351		$	1,514		$	1,458
Restructured loans		—			—			—			—			—
Other real estate & foreclosed assets		369			7			—			—			125
Accruing loans past due 90 days or more		111			—			55			—			14
Total nonperforming assets	$	3,312		$	2,412		$	2,406		$	1,514		$	1,597
Total nonperforming assets as a percentage of loans and foreclosed assets		0.49	%		0.41	%		0.43	%		0.29	%		0.32	%

	Quarter Ended
	June 30, 2004				March 31, 2004				December 31, 2003				September 30, 2003				June 30, 2003
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	9,574		$		7,784		$		7,483		$		7,412		$		7,365
Loans charged off		(196	)			(137	)			(163	)			(24	)			(272	)
Loan recoveries		66				68				170				49				79
Net (charge-offs) recoveries		(130	)			(69	)			7				25				(193	)
Provision for loan losses		400				605				294				46				240
Balance at end of period	$	9,844		$		8,320		$		7,784		$		7,483		$		7,412
Allowance for loan losses as a percentage of total loans		1.46	%			1.40	%			1.41	%			1.45	%			1.48	%
Allowance for loan losses as a percentage of nonperforming loans		347.60	%			345.95	%			323.57	%			494.39	%			503.53	%
Net charge-offs (recoveries) as a percentage of average loans		0.02	%			0.01	%			0.00	%			-0.01	%			0.04	%
Provision for loan losses as a percentage of average loans		0.06	%			0.11	%			0.05	%			0.01	%			0.05	%

	Quarter Ended
	June 30, 2004				March 31, 2004				December 31, 2003				September 30, 2003				June 30, 2003
SELECTED RATIOS
Return on average assets (annualized)		1.13	%			1.22	%			1.21	%			1.29	%			1.37	%
Return on average equity (annualized)		14.79	%			14.06	%			13.93	%			14.38	%			14.55	%
Average shareholders’ equity to average assets		7.62	%			8.68	%			8.68	%			8.97	%			9.42	%
Yield on earning assets		5.23	%			5.36	%			5.35	%			5.38	%			5.68	%
Cost of interest bearing funds		1.42	%			1.39	%			1.38	%			1.42	%			1.62	%
Net interest margin (tax equivalent)		4.18	%			4.36	%			4.36	%			4.37	%			4.53	%
Efficiency ratio		58.90	%			55.94	%			59.29	%			59.57	%			56.74	%
End of period book value per common share	$	11.14		$		11.63		$		11.17		$		11.04		$		11.15
End of period common shares outstanding		6,186				6,154				6,152				6,165				6,166

SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands)

	Three Months Ended
	June 30, 2004								June 30, 2003
	Average Balance			Interest		Yield			Average Balance			Interest		Yield
YIELD ANALYSIS
Interest Earning Assets:
Federal funds sold & due from time	$	31,177		$	75		0.96	%	$	11,689		$	33		1.13	%
Investment securities (taxable)		190,212			1,778		3.76	%		160,498			1,599		4.00	%
Investment securities (tax-exempt)		6,760			88		5.24	%		5,102			71		5.62	%
Loans		642,935			9,391		5.87	%		499,545			7,878		6.33	%
Total Interest Earning Assets		871,084			11,332		5.23	%		676,834			9,581		5.68	%
Noninterest Earning Assets:
Cash and due from banks		28,813								27,970
Other assets		35,256								21,648
Allowance for loan losses		(9,323	)							(7,382	)
Total Noninterest Earning Assets		54,746								42,236
Total Assets	$	925,830							$	719,070
Interest Bearing Liabilities:
Transaction and money market accounts	$	238,697			637		1.07	%	$	192,773			570		1.19	%
Savings deposits		143,322			408		1.15	%		114,259			411		1.44	%
Certificates and other time deposits		139,794			792		2.28	%		122,388			800		2.62	%
Other borrowings		121,193			437		1.45	%		48,866			153		1.26	%
Total Interest Bearing Liabilities		643,006			2,274		1.42	%		478,286			1,934		1.62	%
Noninterest Bearing Liabilities:
Demand deposits		207,815								170,234
Other liabilities		4,426								2,811
Shareholders’ equity		70,583								67,739
Total Noninterest Bearing Liabilities		282,824								240,784
Total Liabilities and Shareholders’ Equity	$	925,830							$	719,070
Net Interest Income and Margin (tax equivalent)				$	9,058		4.18	%				$	7,647		4.53	%

SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands)

	Six Months Ended
	June 30, 2004								June 30, 2003
	Average Balance			Interest		Yield			Average Balance			Interest		Yield
YIELD ANALYSIS
Interest Earning Assets:
Federal funds sold & due from time	$	18,301		$	88		0.96	%	$	6,517		$	37		1.14	%
Investment securities (taxable)		185,701			3,496		3.77	%		163,042			3,310		4.09	%
Investment securities (tax-exempt)		6,779			178		5.27	%		5,049			142		5.69	%
Loans		608,398			17,805		5.89	%		487,985			15,377		6.35	%
Total Interest Earning Assets		819,179			21,567		5.29	%		662,593			18,866		5.74	%
Noninterest Earning Assets:
Cash and due from banks		26,975								26,810
Other assets		29,433								21,667
Allowance for loan losses		(8,651	)							(7,190	)
Total Noninterest Earning Assets		47,757								41,287
Total Assets	$	866,936							$	703,880
Interest Bearing Liabilities:
Transaction and money market accounts	$	217,809			1,155		1.07	%	$	184,956			1,033		1.13	%
Savings deposits		137,301			793		1.16	%		115,407			807		1.41	%
Certificates and other time deposits		132,972			1,530		2.31	%		120,053			1,601		2.69	%
Other borrowings		111,271			712		1.29	%		48,442			309		1.29	%
Total Interest Bearing Liabilities		599,353			4,190		1.41	%		468,858			3,750		1.61	%
Noninterest Bearing Liabilities:
Demand deposits		193,603								165,151
Other liabilities		3,630								2,871
Shareholders’ equity		70,350								67,000
Total Noninterest Bearing Liabilities		267,583								235,022
Total Liabilities and Shareholders’ Equity	$	866,936							$	703,880
Net Interest Income and Margin (tax equivalent)				$	17,377		4.27	%				$	15,116		4.60	%

SUMMIT BANCSHARES, INC.
(Unaudited)
(Dollars in thousands, except per share data)

	June 30, 2004		%			June 30, 2003		%
LOAN PORTFOLIO
Commercial and industrial	$	249,230		37.0	%	$	204,647		40.9	%
Real estate:
Commercial		192,956		28.7	%		134,370		26.9	%
Residential		83,398		12.4	%		54,594		10.9	%
Construction and development		104,237		15.5	%		72,422		14.5	%
Consumer		42,865		6.4	%		34,007		6.8	%
Total loans (gross)		672,686		100.0	%		500,040		100.0	%
Unearned discounts		—		0.0	%		—		0.0	%
Total loans (net)		672,686		100.0	%		500,040		100.0	%

	June 30, 2004			June 30, 2003
REGULATORY CAPITAL DATA
Tier 1 Capital	$	72,532		$	65,394
Tier 1 Ratio		9.88	%		12.09	%
Total Capital (Tier 1 + Tier 2)	$	81,716		$	72,161
Total Capital Ratio		11.13	%		13.35	%
Total Risk-Adjusted Assets	$	734,032		$	540,676
Tier 1 Leverage Ratio		7.92	%		8.85	%
	June 30, 2004			June 30, 2003
OTHER DATA
Full Time Equivalent Employees (FTE’s)		262			209
Stock Price Range (For the Quarter Ended):
High	$	30.25		$	25.40
Low	$	27.00		$	18.95
Close	$	29.10		$	23.48