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: January 25, 2005

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.)

          Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02.          Results of Operations and Financial Conditions.

          On January 25, 2005, Summit Bancshares, Inc. (“Summit Bancshares”) issued a press release announcing its earnings for the fourth 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 2.02 and the foregoing description of the press release is qualified in its entirety by reference to this exhibit.

ITEM 7.01.          REGULATION F D DISCLOSURE

          See Item 2.02

ITEM 9.01.          Financial Statements and Exhibits

               (c)          Exhibits

                             The following exhibits are furnished with this Form 8-K.

                             99.1          Press Release dated January 25, 2005

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:  January 25, 2005	By:	/s/  BOB G. SCOTT
		Bob G. Scott,
		Chief Operating Officer

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
99.1	Press Release dated January 25, 2005

EX-99.1

Exhibit 99.1

N E W S from Summit Bancshares, Inc.

For Immediate Release	For Information Contact:
January 25, 2005	Bob G. Scott, COO
	(817) 877-2660

SUMMIT BANCSHARES ANNOUNCES
FOURTH QUARTER AND YEAR 2004 RESULTS

Fort Worth, Texas - Summit Bancshares, Inc. (Nasdaq:SBIT),  bank holding company for Summit Bank, N.A., today reported net income for fourth quarter 2004 of $2,919,000, or $0.23 per diluted common share, compared to $2,403,000, or $0.19 per diluted common share, for the comparable 2003 period, a 21% increase.  Return on assets and return on shareholders’ equity averaged 1.18% and 15.58%, respectively, compared to 1.21% and 13.93%, respectively, for the corresponding 2003 period. 

For the year ended December 31, 2004, net income totaled $10,762,000, or $0.85 per diluted common share, compared to $9,768,000, or $0.77 per diluted common share, for the corresponding 2003 period, a 10.4% increase.  Return on assets and return on shareholders’ equity averaged 1.16% and 15.04%, respectively, for the year ended December 31, 2004, compared to 1.32% and 14.43%, respectively, for the corresponding 2003 period. 

Summit completed its acquisition of ANB Financial Corporation and its subsidiary, Arlington National Bank, (“ANB”), effective May 1, 2004.  The results of operations for this acquisition have been included in Summit’s consolidated financial statements since the purchase date.  Also, Summit completed on December 31, 2004, a two (2) for one (1) stock split payable in the form of a 100% stock dividend.  Therefore, all historical per share data has been changed to reflect the split. 

Net interest income of $10.2 million for the fourth quarter 2004 improved $2.0 million, or 25.1%, over fourth quarter 2003.  Average total interest earning assets increased 23.9% from fourth quarter 2003 to $925 million for fourth quarter 2004 in part due to the ANB purchase.  The net interest margin, on a taxable-equivalent basis, on average total interest earning assets increased 5 basis points to 4.41% for the fourth quarter 2004 compared to the corresponding 2003 quarter. 

For the year ended December 31, 2004, net interest income totaled $37.4 million, reflecting a $6.3 million, or 20.1%, increase from the year of 2003.  This increase resulted primarily from an increase of 24.6% in average total interest earning assets to $870 million for the year of 2004.  The net interest margin, on a taxable-equivalent basis, on average total interest earning assets decreased 17 basis points to 4.31% for the year ended December 31, 2004 compared to the prior year period, primarily due to the lower interest rate environment in 2004 as compared to 2003.  After declining for several quarters, the net interest margin has increased for the last two quarters of 2004 as prime rate has increased.    

A provision for loan losses of $290,000 for the fourth quarter 2004 was comparable to the provision for loan losses of $294,000 for the fourth quarter of 2003.  Net charge-offs totaled $182,000 for the fourth quarter 2004, representing charge-offs to average loans for the quarter of 0.03%.  As of December 31, 2004, the allowance for loan losses as a percentage of total loans was 1.45%, a level maintained for the last three quarters.  For the year ended December 31, 2004, the provision for loan losses totaled $1,790,000, reflecting a $910,000 increase over the provision of the prior year period primarily driven by strong loan growth.  Net charge-offs for the year were $641,000, or 0.10%, of average loans. 

Non-interest income of $1,811,000 for fourth quarter 2004 increased 32.1% over fourth quarter 2003, excluding the gain on sale of investment securities of $129,000 in the fourth quarter of 2003.  Service charges on deposits amounted to $1,084,000 for fourth quarter 2004, an increase of 23% primarily due to the inclusion this year of the fees related to the Arlington locations.  The higher earnings credit rate paid for commercial deposit accounts on analysis had a negative impact on service fees.  Included in the increase of other income of $237,000 for the quarter were the following: a) an increase due to inclusion of the Arlington locations, and b) increases in insurance commission of $13,500, mortgage origination fees of $38,400, debit card fees of $33,000, recovered interest on loans previously on non-accrual of $65,800, and trust fees of $41,900.  These increases were somewhat offset by $13,000 decrease in fees from investment services. 

For the year ended December 31, 2004, non-interest income totaled $7,210,000, reflecting an increase of $1,412,000, or 24.4%, over the year of 2003, excluding gains on investment securities of $32,000 and $230,000, respectively for the years of 2004 and 2003.  Service charges on deposits increased $805,000, or 23.4%, for the year of 2004 compared to the year 2003.  Excluding the contribution of ANB, the increase in service charges on deposits was 7.4%.  Other income increased $607,000 or 25.8%.  Contributing to this increase were increases in insurance commissions of $39,700, debit card and ATM income of $119,000, recovered interest on loans previously on non-accrual or charged-off loans of $65,800, fees from sales of personalized checks of $86,000, trust fees of $155,700, and income from sale of assets of $334,100 which included foreclosed assets and student loans.  These increases in other income were somewhat offset by decreases in letter of credit fees of $77,600, mortgage origination fees of $92,000, and fees from investment services of $86,800. 

Non-interest expense of $7,202,000 for fourth quarter 2004 increased $1,448,000, or 25.2%, over fourth quarter 2003.  Excluding the impact of the acquisition of ANB, the increase in expenses was $538,000, or 9.3%.  Also contributing to the increase in non-interest expenses were the expenses related to the opening of a remote motor bank facility for the Hulen Branch and the opening of a new facility for the Euless branch, both opened in October.  Also reflected in the fourth quarter 2004 expenses are costs related to compliance with the Sarbanes Oxley Act’s Section 404 (“SOX 404”), which required additional expenditures for auditing and consulting fees in the amount of approximately $180,000.  Some portion of this expense is considered a one time expenditure, but the future cost of compliance is yet to be determined.  

Non-interest expense of $26,190,000 for the year of 2004 increased $4,737,000, or 22.1%, compared to the year of 2003.  Excluding the expenses related to the acquired Arlington locations the increase in expenses was $1,986,000 or 9.3%.  As noted above, the opening of the new Hulen motor bank and the Euless Branch added expenses in 2004.  Also, the additional expense for SOX 404 compliance for the year was approximately $350,000.  The growth of Summit in 2003 and 2004 required increased expenditures for staff, support equipment, supplies, etc.  The efficiency ratio was 58.6% for the year of 2004 compared to 57.6% for 2003.  As the economy of scale of the Arlington acquisition is reflected for a full twelve months, as the newer branches continue to grow within their markets and facilities and as the net interest margin improves in a rising rate environment, the efficiency ratio is expected to improve.

2

At December 31, 2004, loans totaling $2,587,000 were on non-accrual status and represented 0.37% of total loans outstanding.  The allowances for loan losses represented 394% of the non-accrual loans.  The dollar amount of non-accrual loans was similar to the level over the past four quarters. 

Summit files annual, quarterly and special reports, proxy statements and other information with the SEC.  Investors may read and copy any of these reports, statements and other information at the SEC’s public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549.  Investors should call the SEC at 1-800-SEC-0330 for further information on the public reference room.  The reports, statements, and other information filed by Summit with the SEC are also available free at the SEC’s web site at http://www.sec.gov.  You can also obtain a free copy of these reports, statements and other information from Summit’s web site at http:///www.summitbank.net. 

The Company will host a conference call Wednesday, January 26, 2005 at 10:30 a.m. (CT) to discuss the Company’s performance for the quarter and year ended December 31, 2004. To participate, please call (800)406-5356 and enter confirmation code 7474413. If you are unable to participate, an audio playback of the call will be available starting Wednesday, January 26, 2005 at 2:00 p.m. (CT) through midnight February 9, 2005 (CT) by calling (888)203-1112 and entering code 7474413.

The 2005 Annual Meeting of Shareholders will be held on April 19, 2005 at 3:30 p.m. (CT) at Summit Bancshares, Inc. Corporate Headquarters, 3880 Hulen Street, Suite 300, Fort Worth, Texas.

Certain statements contained in this press release that 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 Street, Ste. 300 · Fort Worth, Texas 76107
Telephone (817) 336-6817 · Fax (817) 877-2672 · Web Site: www.summitbank.net

3

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

	Quarter Ended December 31,				% Change			Twelve Months Ended December 31,				% Change
	2004		2003					2004		2003
EARNINGS SUMMARY
Interest income	$	12,995	$	10,020		29.7	%	$	46,857	$	38,527		21.6	%
Interest expense		2,782		1,853		50.1	%		9,506		7,437		27.8	%
Net interest income		10,213		8,167		25.1	%		37,351		31,090		20.1	%
Provision for loan losses		290		294		-1.4	%		1,790		880		103.4	%
Service charges on deposits		1,084		881		23.0	%		4,248		3,443		23.4	%
Gain on Sale of Investment Securities		—		129		-100.0	%		32		230		-86.1	%
Other Income		727		490		48.4	%		2,962		2,355		25.8	%
Salaries and benefits expense		4,160		3,594		15.7	%		15,329		12,926		18.6	%
Occupancy and equipment expense		1,237		983		25.8	%		4,467		3,611		23.7	%
Other expense		1,805		1,177		53.4	%		6,394		4,916		30.1	%
Earnings before income taxes		4,532		3,619		25.2	%		16,613		14,785		12.4	%
Provision for income taxes		1,613		1,216		32.6	%		5,851		5,017		16.6	%
Net earnings	$	2,919	$	2,403		21.5	%	$	10,762	$	9,768		10.2	%
Basic earnings per share	$	0.23	$	0.19		21.1	%	$	0.87	$	0.79		10.1	%
Basic weighted average shares outstanding		12,349		12,310					12,326		12,322
Diluted earnings per share	$	0.23	$	0.19		21.1	%	$	0.85	$	0.77		10.4	%
Diluted weighted average shares outstanding		12,714		12,680					12,679		12,634

	Average for Quarter Ended
	December 31, 2004		September 30, 2004		June 30, 2004		March 31, 2004		December 31, 2003
BALANCE SHEET SUMMARY
Total loans	$	694,177	$	678,915	$	642,935	$	573,862	$	537,635
Total investment securities		226,530		218,831		196,972		187,988		205,162
Earning assets		924,557		914,595		871,084		767,274		746,066
Total assets		984,814		976,911		925,830		808,009		788,426
Noninterest bearing deposits		235,846		226,462		207,815		179,396		184,106
Interest bearing deposits		560,341		557,329		521,812		454,352		450,401
Total deposits		796,187		783,791		729,628		633,748		634,507
Other borrowings		109,713		118,083		121,193		101,349		82,160
Shareholders’ equity		74,543		71,038		70,583		70,116		68,399

	Average for Twelve Months Ended December 31,				% Change
	2004		2003
BALANCE SHEET SUMMARY
Total loans	$	647,686	$	504,520		28.4	%
Total investment securities		207,663		185,318		12.1	%
Earning assets		869,652		697,750		24.6	%
Total assets		924,202		739,658		24.9	%
Noninterest bearing deposits		212,482		172,784		23.0	%
Interest bearing deposits		523,652		436,017		20.1	%
Total deposits		736,134		608,801		20.9	%
Other borrowings		112,592		60,156		87.2	%
Shareholders’ equity		71,577		67,673		5.8	%

	Ending Balance
	December 31, 2004			September 30, 2004			June 30, 2004			March 31, 2004			December 31, 2003
BALANCE SHEET SUMMARY
Total loans	$	702,619		$	689,906		$	672,686		$	593,271		$	553,769
Total investment securities		223,351			219,264			214,991			181,879			195,959
Total earning assets		930,990			928,638			905,228			818,393			751,063
Allowance for loan losses		(10,187	)		(10,079	)		(9,844	)		(8,320	)		(7,784	)
Premises and equipment		15,749			15,643			15,145			12,755			12,920
Total assets		989,117			990,406			969,708			860,361			795,478
Noninterest bearing deposits		235,399			232,586			218,343			186,198			192,877
Interest bearing deposits		556,865			558,938			557,347			470,186			448,504
Total deposits		792,264			791,524			775,690			656,384			641,381
Other borrowings		118,094			121,355			121,785			129,691			82,234
Total liabilities		914,627			916,858			901,009			788,786			726,794
Shareholders’ equity		74,490			73,548			68,699			71,575			68,684

4

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

	December 31, 2004			September 30, 2004			June 30, 2004			March 31, 2004			December 31, 2003
NONPERFORMING ASSETS
Nonaccrual loans	$	2,587		$	2,545		$	2,832		$	2,405		$	2,351
Restructured loans		—			—			—			—			—
Other real estate & foreclosed assets		—			4			369			7			—
Accruing loans past due 90 days or more		18			2,300			111			—			55
Total nonperforming assets	$	2,605		$	4,849		$	3,312		$	2,412		$	2,406
Total nonperforming assets as a percentage of loans and foreclosed assets		0.37	%		0.70	%		0.49	%		0.41	%		0.43	%

	Quarter Ended
	December 31, 2004			September 30, 2004			June 30, 2004			March 31, 2004			December 31, 2003
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	10,079		$	9,844		$	8,320		$	7,784		$	7,483
Balance acquired in Arlington National Bank Acquisition		—			—			1,254			—			—
Loans charged off		(293	)		(415	)		(196	)		(137	)		(163	)
Loan recoveries		111			155			66			68			170
Net (charge-offs) recoveries		(182	)		(260	)		(130	)		(69	)		7
Provision for loan losses		290			495			400			605			294
Balance at end of period	$	10,187		$	10,079		$	9,844		$	8,320		$	7,784
Allowance for loan losses as a percentage of total loans		1.45	%		1.46	%		1.46	%		1.40	%		1.41	%
Allowance for loan losses as a percentage of nonperforming loans		393.82	%		396.03	%		347.60	%		345.95	%		323.57	%
Net charge-offs (recoveries) as a percentage of average loans		0.03	%		0.04	%		0.02	%		0.01	%		0.00	%
Provision for loan losses as a percentage of average loans		0.04	%		0.07	%		0.06	%		0.11	%		0.05	%

	Quarter Ended
	December 31, 2004			September 30, 2004			June 30, 2004			March 31, 2004			December 31, 2003
SELECTED RATIOS
Return on average assets (annualized)		1.18	%		1.14	%		1.13	%		1.22	%		1.21	%
Return on average equity (annualized)		15.58	%		15.66	%		14.79	%		14.06	%		13.93	%
Average shareholders’ equity to average assets		7.57	%		7.27	%		7.62	%		8.68	%		8.68	%
Yield on earning assets		5.61	%		5.39	%		5.23	%		5.36	%		5.35	%
Cost of interest bearing funds		1.65	%		1.49	%		1.42	%		1.39	%		1.38	%
Net interest margin (tax equivalent)		4.41	%		4.29	%		4.18	%		4.36	%		4.36	%
Efficiency ratio		59.71	%		59.23	%		58.90	%		55.94	%		59.29	%
End of period book value per common share	$	6.03		$	5.96		$	5.57		$	5.82		$	5.59
End of period common shares outstanding		12,359			12,334			12,372			12,307			12,305

5

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

	Three Months Ended
	December 31, 2004									December 31, 2003
	Average Balance			Interest		Yield			Average Balance				Interest		Yield
YIELD ANALYSIS
Interest Earning Assets:
Federal funds sold & due from time	$	3,850		$	31		3.18	%	$		3,269		$	6		0.76	%
Investment securities (taxable)		218,512			1,974		3.61	%			198,302			1,932		3.87	%
Investment securities (tax-exempt)		8,018			104		5.20	%			6,860			90		5.20	%
Loans		694,177			10,921		6.26	%			537,635			8,031		5.93	%
Total Interest Earning Assets		924,557			13,030		5.61	%			746,066			10,059		5.35	%
Noninterest Earning Assets:
Cash and due from banks		29,282									25,387
Other assets		41,140									24,555
Allowance for loan losses		(10,165	)								(7,582	)
Total Noninterest Earning Assets		60,257									42,360
Total Assets	$	984,814							$		788,426
Interest Bearing Liabilities:
Transaction and money market accounts	$	239,046			690		1.15	%	$		197,375			509		1.02	%
Savings deposits		168,191			577		1.36	%			128,319			394		1.22	%
Certificates and other time deposits		153,104			935		2.43	%			124,707			740		2.36	%
Other borrowings		109,713			580		2.10	%			82,160			209		1.01	%
Total Interest Bearing Liabilities		670,054			2,782		1.65	%			532,561			1,852		1.38	%
Noninterest Bearing Liabilities:
Demand deposits		235,846									184,106
Other liabilities		4,371									3,360
Shareholders’ equity		74,543									68,399
Total Noninterest Bearing Liabilities		314,760									255,865
Total Liabilities and Shareholders’ Equity	$	984,814							$		788,426
Net Interest Income and Margin (tax equivalent)				$	10,248		4.41	%					$	8,207		4.36	%

6

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

	Twelve Months Ended
	December 31, 2004								December 31, 2003
	Average Balance			Interest		Yield			Average Balance			Interest		Yield
YIELD ANALYSIS
Interest Earning Assets:
Federal funds sold & due from time	$	14,303		$	170		1.19	%	$	7,912		$	81		1.02	%
Investment securities (taxable)		200,383			7,409		3.70	%		179,539			7,106		3.96	%
Investment securities (tax-exempt)		7,280			395		5.43	%		5,779			314		5.43	%
Loans		647,686			39,024		6.03	%		504,520			31,171		6.18	%
Total Interest Earning Assets		869,652			46,998		5.40	%		697,750			38,672		5.54	%
Noninterest Earning Assets:
Cash and due from banks		28,620								26,295
Other assets		35,281								22,964
Allowance for loan losses		(9,351	)							(7,351	)
Total Noninterest Earning Assets		54,550								41,908
Total Assets	$	924,202							$	739,658
Interest Bearing Liabilities:
Transaction and money market accounts	$	232,155			2,518		1.08	%	$	193,841			2,108		1.09	%
Savings deposits		149,510			1,832		1.23	%		119,851			1,581		1.32	%
Certificates and other time deposits		141,987			3,327		2.34	%		122,325			3,121		2.55	%
Other borrowings		112,592			1,829		1.62	%		60,156			627		1.04	%
Total Interest Bearing Liabilities		636,244			9,506		1.49	%		496,173			7,437		1.50	%
Noninterest Bearing Liabilities:
Demand deposits		212,482								172,784
Other liabilities		3,899								3,028
Shareholders’ equity		71,577								67,673
Total Noninterest Bearing Liabilities		287,958								243,485
Total Liabilities and Shareholders’ Equity	$	924,202							$	739,658
Net Interest Income and Margin (tax equivalent)				$	37,492		4.31	%				$	31,235		4.48	%

7

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

	December 31, 2004		%			December 31, 2003		%
LOAN PORTFOLIO
Commercial and industrial	$	261,571		37.2	%	$	219,805		39.7	%
Real estate:
Commercial		224,720		32.0	%		159,082		28.7	%
Residential		82,839		11.8	%		67,635		12.2	%
Construction and development		93,558		13.3	%		74,069		13.4	%
Consumer		39,931		5.7	%		33,178		6.0	%
Total loans (gross)		702,619		100.0	%		553,769		100.0	%
Unearned discounts		—		0.0	%		—		0.0	%
Total loans (net)		702,619		100.0	%		553,769		100.0	%

	December 31, 2004			December 31, 2003
REGULATORY CAPITAL DATA
Tier 1 Capital	$	76,449		$	67,996
Tier 1 Ratio		10.15	%		11.45	%
Total Capital (Tier 1 + Tier 2)	$	85,874		$	75,426
Total Capital Ratio		11.40	%		12.70	%
Total Risk-Adjusted Assets	$	753,206		$	594,044
Tier 1 Leverage Ratio		7.85	%		8.62	%

	December 31, 2004		December 31, 2003
OTHER DATA
Full Time Equivalent Employees (FTE’s)		254		225
Stock Price Range (For the Quarter Ended):
High	$	18.95	$	14.48
Low	$	16.33	$	13.23
Close	$	18.75	$	13.81

8