Related Party Transactions and Outside Related Director Information

EuroBancshares, Inc. (EUBK)

3/31/2006 Proxy Information

Under Section 402 of the Sarbanes-Oxley Act of 2002, it is now unlawful for any issuer to extend, renew or arrange for the extension of credit in the form of a personal loan to or for any director or executive officer of that issuer. This prohibition does not apply to loans that were made on or prior to July 30, 2002, or certain types of loans described in Section 402 that are:

á made available by the issuer in the ordinary course of the issuerŐs consumer credit business;

á of a type generally made available by such issuer to the public; and

á made by the issuer on market terms, or terms that are no more favorable than those offered by the issuer to the general public.

Section 402 also does not apply to loans by an insured depository institution, if the loan is subject to the insider lending restrictions of Section 22(h) of the Federal Reserve Act or the Federal ReserveŐs Regulation O.

Certain of our officers, directors and principal stockholders and their affiliates have had transactions with Eurobank, including borrowings and investments in certificates of deposit. Our management believes that all such loans and investments have been and will continue to be made in the ordinary course of business of Eurobank on substantially the same terms, including interest rates paid and collateral required, as those prevailing at the time for comparable transactions with unaffiliated persons, and do not involve more than the normal risk of collectibles or present other unfavorable features. Therefore, we believe that all of these transactions comply with Section 402 of the Sarbanes-Oxley Act or have been made pursuant to a valid exception from Section 402 of the Sarbanes-Oxley Act.

Two of our directors, William Torres Torres and Pedro Feliciano Ben’tez are principals in corporations that own certain real estate of which portions are leased to Eurobank. During the fiscal year 2005, a corporation controlled by Mr. Torres received lease payments from Eurobank totaling $128,646. Another corporation controlled equally by Mr. Torres and Mr. Feliciano received lease payments in the amount of $96,000 for the years 2003, 2004 and 2005. We believe that the terms of the leases between Eurobank and the corporations controlled by Mr. Torres and Mr. Feliciano are on an armŐs-length basis.