8-K

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 (Date of earliest event reported):

April 28, 2006

Summit Financial Group, Inc.

(Exact name of registrant as specified in its charter)

West Virginia	No. 0-16587	55-0672148
(State or other jurisdiction of )	(Commission File Number)	(I.R.S. Employer Identification)
incorporation or organization)

300 North Main Street

Moorefield, West Virginia 26836

(Address of Principal Executive Offices)

(304) 530-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or 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:

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

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

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

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

Section 1 - Registrant’s Business and Operations

Item 1.01.Entry Into A Material Definitive Agreement

On April 28, 2006, the Board of Directors of Summit Financial Group, Inc. (the “Company”) adopted a resolution authorizing the advancement of funds to pay or reimburse reasonable expenses incurred by a director or officer of the Company who is a party to a proceeding because he or she is a director or officer of the Company (the “Resolution”). Currently, the Company’s Articles of Incorporation provide for indemnification of an officer or director who is a party to a proceeding because he or she is a director of the Company, but do not address the advancement of expenses. Advancement of expenses is permitted under West Virginia Code § 31D-8-853. As of the date of this filing, the Company is not aware of any proceeding against a director or executive officer.

As previously disclosed in the Company’s filing on Form 10-K dated December 31, 2005, the Company and its Chief Executive Officer, H. Charles Maddy, III, extended the term of Mr. Maddy’s Employment Agreement dated March 4, 2005, for an additional year until March 9, 2009. On May 2, 2006, Mr. Maddy and the Company executed a First Amendment to the Employment Agreement (the “Amendment”) providing for the extension in writing.

A copy of the Resolution and the Amendment are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively. The foregoing summary description of the Amendment and the Resolution is not intended to be complete and is qualified in its entirety by the complete text of each attached hereto.

Section 8 - Other Events

Item 8.01.Other Events

On April 28, 2006, Summit Financial Group, Inc.’s (“Summit”) Board of Directors declared the first half 2006 dividend. As a result, Summit issued on May 1, 2006 a News Release announcing the dividend. This News Release is furnished as Exhibit 99 and is incorporated herein by reference.

Section 9 - Financial Statements and Exhibits

Item 9.01.Financial Statements and Exhibits

(c)The following exhibits are being filed herewith:

10.1 Amendment to Employment Agreement between Summit Financial Group, Inc. and H. Charles Maddy, III.

10.2 Resolution of the Board of Directors dated April 28, 2006.

99 News Release issued on May 1, 2006.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

     SUMMIT FINANCIAL GROUP, INC.

Date: May 4, 2006By:/s/ Julie R. Cook

            Julie R. Cook

      Vice President &

      Chief Accounting Officer

EX-10.1

                   Exhibit 10.1

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT(this “Agreement”), entered into as of the 2nd day of May, 2006, and effective as of December 6, 2005, by and between SUMMIT FINANCIAL GROUP, INC., a West Virginia corporation and bank holding company (“Summit”) and H. CHARLES MADDY, III, (“Maddy”).

W I T N E S S E T H:

WHEREAS, on March 4, 2005, Summit and Maddy entered into that certain Employment Agreement whereby Summit agreed to employ Maddy and Maddy accepted employment as the Chief Executive Officer of Summit (the “Employment Agreement”); and

WHEREAS, the term of the Employment Agreement commenced on March 4, 2005, and extends until March 4, 2008; and

WHEREAS, the Board of Directors of Summit or a committee designated by the Board of Directors of Summit is required by the terms of the Employment Agreement to review the Employment Agreement at least annually, and the Board of Directors of Summit may, with the approval of Maddy, extend the term of the Employment Agreement annually for one (1) year periods (so that the actual term of the Employment Agreement will always be between two and three years); and

WHEREAS, on December 6, 2005, the Compensation and Nominating Committee of the Board of Directors of Summit met to review the Employment Agreement and extended the term of the Employment Agreement for an additional one (1) year until March 4, 2009; and

WHEREAS, Maddy approved the extension of the Employment Agreement for an additional one (1) year until March 4, 2009; and

WHEREAS, Maddy and Summit desire to enter into this Agreement to evidence the extension of the Employment Agreement for an additional one (1) year until March 4, 2009.

NOW THEREFORE, for in consideration of the premises and mutual covenants, agreements and undertakings, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as follows:

1.Amendment to Employment Agreement. Effective as of the date of this Agreement, the term of the Employment Agreement shall be until March 4, 2009.

2.Enforceable Documents. Except as modified herein, all terms and conditions of the Employment Agreement, as the same may be supplemented, modified, amended or extended from time to time, are and shall remain in full force and effect.

3.Authority. The undersigned are duly authorized by all required action or agreement to enter into this Agreement.

4.Modifications to Agreement. This Agreement may be amended or modified only by an instrument or document in writing signed by the person or entity against whom enforcement is sought.

5.Governing Law. This Agreement, and any documents executed in connection herewith or as required hereunder, and the rights and obligations of the undersigned hereto and thereto, shall be governed by, construed and enforced in accordance with the laws of the State of West Virginia.

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first written above.

       SUMMIT FINANCIAL GROUP, INC.

        By:/s/ Oscar M. Bean

        Oscar M. Bean

        Its:Chairman

/s/ H. Charles Maddy, III

H. Charles Maddy, III

EX-10.2

          & #160;     Exhibit 10.2

RESOLUTION OF

THE BOARD OF DIRECTORS

SUMMIT FINANCIAL GROUP, INC.

Adopted on April 28, 2006

WHEREAS, the Board of Directors of Summit Financial Group, Inc. (the “Company”) has reviewed its Amended and Restated Articles of Incorporation and has determined that the indemnification provisions contained in Article IX, Section 3, thereof do not expressly authorize the advancement of reasonable expenses incurred by a director or officer who is a party to a proceeding because he or she is a director or officer of the Company; and

WHEREAS, pursuant to section 31D-8-858(a) of the West Virginia Code, the Board of Directors desires to authorize the advancement of funds to pay for or reimburse reasonable expenses in accordance with Section 31D-8-853 of the West Virginia Code or such successor provision as may be adopted.

NOW, THEREFORE, BE IT RESOLVED, that the Company shall advance funds to pay for or reimburse the reasonable expenses incurred by a director or officer of the Company who is a party to a proceeding because he or she is a director or officer of the Company in accordance with Section 31D-8-853 of the West Virginia Code. In order to be entitled to the advancement of expenses contemplated herein, unless otherwise waived by the Company, the director or officer shall provide written notice of any proceeding against him or her which he or she believes entitles the director or officer to advancement of expenses.

EX-99

Exhibit 99

FOR RELEASE AT 6:00 AM EDT, MONDAY, MAY 1, 2006

May 1, 2006

Contact:Teresa Sherman, Director of Shareholder Relations

Telephone:(304) 530-0526

Email:          tsherman@SummitFGI.com

SUMMIT FINANCIAL GROUP ANNOUNCES FIRST HALF 2006 SEMI-ANNUAL DIVIDEND

MOOREFIELD, WV - May 1, 2006 -- SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF), a $1.14 billion financial holding company headquartered in Moorefield, West Virginia, today announces its first half 2006 semi-annual cash dividend. The dividend will be $0.16 per share and is payable on June 15, 2006 to shareholders of record as of June 1, 2006. This dividend represents an increase of 14% over the $0.14 per share paid in the first half of 2005.

Summit operates fourteen banking locations through its two wholly owned subsidiary banks, Summit Community Bank headquartered in Moorefield, West Virginia, and Shenandoah Valley National Bank in Winchester, Virginia. In addition, Summit also operates Summit Mortgage, a residential mortgage loan originator located in Chesapeake, Virginia, and Summit Insurance, LLC in Moorefield, West Virginia.