Related Party Transactions and Outside Related Director Information

Smithtown Bancorp, Inc. (SMTB)

3/16/2006 Proxy Information

Some of the directors and officers of the Bancorp, and some of the corporations and firms with which these individuals are associated, are also customers of Bank of Smithtown in the ordinary course of business, or are indebted to the Bank in respect of loans of $60,000.00 or more. It is anticipated that some of these individuals, corporations and firms will continue to be customers of and indebted to the Bank on a similar basis in the future. All loans extended to such individuals, corporations and firms were made in the ordinary course of business, did not involve more than the normal risk of collectablity or present other unfavorable features, and were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable Bank transactions with unaffiliated persons.

No director of the Bank or the Bancorp had an aggregate amount of unsecured indebtedness to the Bank in excess of fifteen percent of the Bank’s equity capital account during the period of January 1, 2005 through December 31, 2005.

During the year 2005, Patricia C. Delaney, a director of the Bancorp, was retained as General Counsel for the Bancorp and the Bank and was paid approximately $71,081.03 for legal services rendered.

In August 2004, the Bank purchased all of the shares of stock of all of the stockholders of the insurance agency known as Seigerman-Mulvey Co., Inc. (the “Agency”). Barry M. Seigerman, a director of the Bancorp, owned 48.3% of the shares of stock of the Agency. Pursuant to the terms of the Purchase Agreement, Mr. Seigerman and the other two stockholders of the Agency receives an Earn Out Payment in each of the three years following the closing. The Earn Out Payment each year is equal to one hundred twenty percent of the net income before taxes of the Agency. The Earn Out Payment paid to Mr. Seigerman by the Bank in 2005 was $690,497.28. Mr. Seigerman also has an employment agreement with the Agency through August 31, 2007. Mr. Seigerman was paid $160,000.00 in 2005 pursuant to the employment agreement. Mr. Seigerman is the President and Chief Executive Officer of the Agency and he serves as a director on the Board of Directors of the Agency. The Agency is now known as Bank of Smithtown Insurance Agents and Brokers, Inc.

Except as described above, none of the directors or officers of the Bank or the Bancorp, or the corporations or firms with which such individuals are associated, currently maintains or has maintained within the last fiscal year any significant business or personal relationship with the Bank or the Bancorp other than such as arises by virtue of such individual’s or entity’s position with and/or ownership interest in the Bank or the Bancorp.