can turn a champ into a chump real quick

Some think that we have not yet seen the worst of the 'financialcrisis' and that 2009 will be worse than 2008. Others think that changeswill take hold and by mid-year we will begin to turn a corner toward morenormalcy in our economy. Founded in 1910, Bank ofSmithtown is nearing its 100th anniversary as a community bank. The stockof its parent holding company, Smithtown Bancorp, is traded on the NASDAQGlobal Select Market under the symbol "SMTB". The Company has often beenrated as one of the best banks in the United States by various magazinesand rating services. The Company's stock has also been rated as one of thetop stocks in the nation, having increased in value over the last 20 yearsat a compounded annual growth rate of more than 20 per year, or by morethan 3,000.Forward-Looking StatementsCertain statements contained in this release that are not statements ofhistorical fact constitute forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995 (the "Act"),notwithstanding that such statements are not specifically identified assuch. Examples of forward-lookingstatements include, but are not limited to: (i) projections of revenues,expenses, income or loss, earnings or loss per share, the payment ornonpayment of dividends, capital structure and other financial items;(ii) statements of our plans, objectives and expectations or those of ourmanagement or Board of Directors, including those relating to products orservices; (iii) statements of future economic performance; and (iv)statements of assumptions underlying such statements.

Words such as"believes," "anticipates," "expects," "intends," "targeted," "continue,""remain," "will," "should," "may" and other similar expressions areintended to identify forward-looking statements but are not the exclusivemeans of identifying such statements.Forward-looking statements involve risks and uncertainties that may causeactual results to differ materially from those in such statements. Factorsthat could cause actual results to differ from those discussed in theforward-looking statements include, but are not limited to: local,regional, national and international economic conditions and the impactthey may have on us and our customers and our assessment of that impact,changes in the level of non-performing assets and charge-offs; changes inestimates of future reserve requirements based upon the periodic reviewthereof under relevant regulatory and accounting requirements; the effectsof and changes in trade and monetary and fiscal policies and laws,including the interest rate policies of the Federal Reserve Board;inflation, interest rate, securities market and monetary fluctuations;political instability; acts of war or terrorism; the timely developmentand acceptance of new products and services and perceived overall value ofthese products and services by users; changes in consumer spending,borrowings and savings habits; changes in the financial performance and/orcondition of our borrowers; technological changes; acquisitions andintegration of acquired businesses; the ability to increase market shareand control expenses; changes in the competitive environment amongfinancial holding companies and other financial service providers; thequality and composition of our loan or investment portfolio; the effect ofchanges in laws and regulations (including laws and regulations concerningtaxes, banking, securities and insurance) with which we and oursubsidiaries must comply; the effect of changes in accounting policies andpractices, as may be adopted by the regulatory agencies, as well as thePublic Company Accounting Oversight Board, the Financial AccountingStandards Board and other accounting standard setters; changes in ourorganization, compensation and benefit plans; the costs and effects oflegal and regulatory developments, including the resolution of legalproceedings or regulatory or other governmental inquiries and the resultsof regulatory examinations or reviews; greater than expected costs ordifficulties related to the opening of new branch offices or theintegration of new products and lines of business, or both; and/or oursuccess at managing the risk involved in the foregoing items.Forward-looking statements speak only as of the date on which suchstatements are made. We undertake no obligation to update anyforward-looking statement to reflect events or circumstances after thedate on which such statement is made, or to reflect the occurrence ofunanticipated events.Consolidated Balance Sheets(in thousands, except share data)As OfDecember 31, December 31,20082007ASSETSCash and due from banks $17,205$17,401Federal funds sold8,764 54Term placements 507-Total cash and cash equivalents26,476 17,455Investment securities:Available for sale:Obligations of U.S. government agencies19,009 32,394Mortgage - backed securities 22,8317,619Obligations of state and political subdivisions 4,6356,312Other securities 11,2238,567 Total securities available forsale57,698 54,892Held to maturity:Mortgage - backed securities-8Obligations of state and political subdivisions 112202Total securities held to maturity (estimated fair value $113 in 2008 and $212 in 2007)112210Total investment securities57,810 55,102Restricted securities15,9162,113Loans 1,688,700983,918Less: allowance for loan losses11,3038,250Loans, net1,677,397975,668Bank premises and equipment32,994 22,611Other assetsCash value of company owned life insurance 19,654 18,961Goodwill3,9233,923Intangible assets 9561,383Other real estate owned 6,9726,972Other23,292 16,961Total other assets 54,797 48,200Total assets$ 1,865,390$ 1,121,149LIABILITIES AND STOCKHOLDERS' EQUITYLiabilitiesDeposits: Demand (non-interest bearing)$ 123,620$ 111,726 Money market 442,078389,891 NOW 32,774 34,814 Savings 73,650 54,267 Time 694,815400,103 Total deposits 1,366,937990,801Dividends payable 472392Other borrowings326,480 20,900Subordinated debt38,836 18,217Other liabilities13,047 10,737 Total liabilities1,745,7721,041,047Stockholders' equityPreferred stock - $.01 par value (100,000 shares authorized at December 31, 2008 and 2007; no shares issued or outstanding at December 31, 2008 and 2007) Common stock - $.01 par value (20,000,000 shares authorized at December 31, 2008 and 2007; 13,851,341 shares issued, 11,799,477 shares outstanding at December 31, 2008; 11,852,374 shares issued, 9,800,510 shares outstanding at December 31, 2007)139119Additional paid in capital 51,947 25,755Retained earnings78,302 64,463Accumulated other comprehensive loss (708)(173)129,680 90,164Treasury stock (2,051,864 shares at cost) (10,062) (10,062) Total stockholders' equity 119,618 80,102Total liabilities and stockholders' equity$ 1,865,390$ 1,121,149Consolidated Statements of Income(in thousands, except share and per share data) For the Three Months For the Twelve MonthsEnded Ended December 31,December 31, 2008200720082007- -Interest incomeLoans $ 24,621$19,016 $ 87,939$73,970Federal funds sold39127213839Securities purchased under agreements to resell- 19- 19Investment securities:Taxable:Obligations of U.S. government agencies3895021,2182,816Mortgage - backed securities453 451,281144Other securities 1031721,059585- - Subtotal9457193,5583,545Exempt from federal income taxes:Obligations of state & political subdivisions 49 61209283- -Total interest income 25,654 19,942 91,919 78,656Interest expenseMoney market accounts (including savings) 2,9044,062 12,004 15,525Time deposits of $100,000 or more 2,2722,0087,9877,848Other time deposits3,2802,878 11,514 11,477Other borrowings 2,4332486,9701,338Subordinated debt6563482,3041,388- -Total interest expense11,5459,544 40,779 37,576- -Net interest income 14,109 10,398 51,140 41,080Provision for loan losses1,2003003,2001,300- -Net interest income after provision for loan losses12,909 10,098 47,940 39,780Noninterest income Trust and investmentservices 196227761801 Service charges ondeposit accounts 6055112,2671,948 Revenues from insuranceagency 7467663,4233,585 Net gain (loss) oninvestment securities (809)15 (803)49 Increase in cash valueof bank owned lifeinsurance135193692806 Other 6796162,1392,034- -Total noninterest income1,5522,3288,4799,223Noninterest expenseSalaries 3,6162,939 13,877 11,833Pension and other employee benefits 8597203,4002,911Net occupancy expense of bank premises 1,7001,0225,7324,021Furniture and equipment expense 7356242,7572,666Amortization of intangible assets 107151427510Other1,6801,5165,7575,013- - Totalnoninterestexpense8,6976,972 31,950 26,954- -Income before income taxes 5,7645,454 24,469 22,049Provision for income taxes 2,1742,0538,7467,774- -Net income$3,590$ 3,401 $ 15,723$14,275 Earnings per shareBasic earnings per share$ 0.31$0.35 $ 1.55$1.47Diluted earnings per share$ 0.31$0.35 $ 1.55$1.47Cash dividends declared $ 0.04$0.04 $ 0.16$0.16Weighted average common shares outstanding 11,761,6919,772,878 10,296,6659,769,833Weighted average common equivalent shares11,761,9959,774,696 10,297,4169,772,365Comprehensive income$5,128$ 3,386 $ 15,188$14,433Selected Financial Data(balance sheet data in thousands) For the Three Months Ended For the Twelve Months Ended December 31,December 31,December 31,December 31, 2008200720082007 Basic earnings per share $ 0.31$ 0.35$ 1.55$ 1.47 Diluted earnings per share 0.000.000.000.00 Assets $1,865,390$1,121,149 Loans 1,688,700 983,918 Deposits1,366,937 990,801 Return on Average Equity 12.48 17.34 16.73 19.40 Cash Return on Average Equity (1) 12.72 17.85 17.02 19.86 Return on Average Tangible Equity (2)13.03 18.61 17.68 20.51 Cash Return on Average Tangible Equity (3) 13.29 19.16 18.00 20.99 Return on Average Assets0.811.231.051.32 Cash Return on Average Assets (1)0.821.261.071.35 Return on Average Tangible Assets (2) 0.811.231.051.33 Cash Return on Average Tangible Assets (3)0.831.271.071.36 Net Interest Margin3.374.053.624.10 Efficiency52.95 54.94 53.03 53.83 Efficiency - Cash Basis52.16 53.77 52.33 52.82 (1) Excludes amortization of intangibles(2) Excludes intangible assets(3) Excludes amortization of intangibles and intangible assetsContact:Ms. Judith BarberCorporate SecretaryCorporate Headquarters100 Motor Parkway, Suite 160Hauppauge, NY11788-5138Direct Dial:631-360-9304Direct Fax: Copyright 2009, Market Wire, All rights reserved.-0-.

The HavesRavens, Jets, Giants, Vikings, Colts, Saints, and Broncos; nine teams at 2-1, i.e. The ContendersFalcons, Niners, Packers, Eagles, Bengals, Patriots, Chargers, Bears, and Cowboys; nine teams at 1-2, i.e. Stuck in the MiddleTexans, Bills, Redskins, Jaguars, Steelers, Raiders, Cardinals, Lions, and Seahawks; and seven teams at 0-3, i.e. The Have NotsBrowns, Rams, Chiefs, Titans, Dolphins, Panthers, and Rams. For the poor 0-3 teams, their season is basically over, as only three teams with that record have made the playoffs since 1990.The biggest surprises of the seven currently 0-3 teams has to be the three 2008 divisional champsTennessee Titans (AFC South champs, finishing with a 13-3 record), Miami Dolphins (AFC East champs, finishing with an 11-5 record), and the Carolina Panthers (NFC South champs, finishing with a 12-4 record).The plight of these fallen from grace teams shows that every year is different in the NFL. Anything, whether it is injuries, a coach on the hot seat, a harder schedule, poor quarterback play, etc., can turn a champ into a chump real quick.Now on to the rankings for this week.1. Giants (3-0)The G-Men found their physical running game as they pounded out more than 200 rushing yards in beating the hapless Bucs into an early submission. Someone at the NFLs scheduling office must really like the Giants as they get another cupcake this week in the Chiefs. 2. Colts (3-0)This quietly undefeated squad, led by possible repeat MVP Peyton Manning, dismantled the Cardinals on "Sunday Night Football." Expect another offensive explosion as the Seahawks, playing without their starting quarterback, come to Indy. 3. Jets (3-0)Another week, another win for Rex Ryans young, tough squad.