**United        States**

**Securities        and Exchange Commission**

**Washington,        D.C. 20549**

**Form          10-Q**

**QUARTERLY        **
**REPORT        PURSUANT TO SECTION **
**13        or 15(d) **
**OF**

**THE        SECURITIES EXCHANGE **
**ACT        OF 1934**

**For        the quarter ended March 31, 2007**

**Commission        File #0 **
**-        **
**13314**

**SMITHTOWN        BANCORP, INC.**

| **New                  York**                                                   | **11-2695037**                                     |
|---------------------------------------------------------------------------------|----------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) | (IRS                  Employer Identification No.) |
|                                                                            |                                               |
| **100                  Motor Parkway, Suite 160, Hauppauge, NY**                | **11788-5138**                                     |
| (Address                  of Principal Executive Office)                        | (Zip                  Code)                        |

**(631)        360-9300**

----

**SMITHTOWN        BANCORP, INC.**

| Part                  I - FINANCIAL INFORMATION |                                                                                                                                                            |
|-------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                            |                                                                                                                                                            |   |
| Item                  1.                        | Financial                  Statements                                                                                                                           |   |
|                                            |                                                                                                                                                            |   |
|                                            | Unaudited                  Consolidated Balance Sheets as of March 31, 2007 and December 31,                  2006                                              | 4 |
|                                            |                                                                                                                                                            |  |
|                                            | Unaudited                  Consolidated Statements of Income for the Three Months Ended March                  31,                  2007 and 2006               | 5 |
|                                            |                                                                                                                                                            |  |
|                                            | Unaudited                  Consolidated Statements of Changes in Stockholders’ Equity For the Three                  Months Ended March 31, 2007 and 2006 | 6 |
|                                            |                                                                                                                                                            |   |
|                                            | Unaudited                  Consolidated Statements of Cash Flows for the Three Months Ended                  March 31,                  2007 and 2006           | 7 |
|                                            |                                                                                                                                                            |   |
| Item                  2.                        | Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations                                   | 10 |
|                                            |                                                                                                                                                            |   |
| Item                  3.                        | Quantitative                  and Qualitative Disclosures About Market Risk                                                                                     | 17 |
|                                            |                                                                                                                                                            |   |
| Item                  4.                        | Controls                  and Procedures                                                                                                                        | 17 |
|                                            |                                                                                                                                                            |   |
| Part                  II - OTHER INFORMATION    |                                                                                                                                                            |
|                                            |                                                                                                                                                            |   |
| Item                  1.                        | Legal                  Proceedings - None                                                                                                                       |   |
|                                            |                                                                                                                                                            |   |
|                                            | Risk                  Factors - No change in factors as reported in Registrant’s Annual Report                  on Form 10-K                              |   |
|                                            |                                                                                                                                                            |   |
| Item                  2.                        | Change                  in Securities and Use of Proceeds                                                                                                       |   |

| Issuer                  Purchases of Equity Securities |   |   |   |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|

|                                                  |   | (a)                                                                                                             |   | (b)                                                                                                       |   | (c)                                                                                                                                                                                 |   | (d)                                                                                                                                                                                                                                   |   |
|-------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Period                                                |   | Total                  Number                  of                  Shares (or                  Units) Purchased |   | Average                  Price                  Paid                  Per Share(or                  Unit) |   | Total                    Number ofShares(or                    Units)Purchased                    asPart                    of PubliclyAnnouncedPlansor                    Programs |   | MaximumNumber(or                  ApproximateDollar                  Value) ofShares(or                  Units)That                  May Yet BePurchased                  Underthe                  Plansor                  Programs |   |
| January                  1, 2007 - January 31, 2007   |   |                                                                                                            | 0      |                                                                                                      |   | 0                                                                                                                                                                                   |   |                                                                                                                                                                                                                                  | 0      |   |   | 89,650 |   |
| February                  1, 2007 - February 28, 2007 |   |                                                                                                            | 0      |                                                                                                      |   | 0                                                                                                                                                                                   |   |                                                                                                                                                                                                                                  | 0      |   |   | 89,650 |   |
| March                  1, 2007 - March 31, 2007       |   |                                                                                                            | 0      |                                                                                                      |   | 0                                                                                                                                                                                   |   |                                                                                                                                                                                                                                  | 0      |   |   | 89,650 |   |
| Total                                                 |   |                                                                                                            | 0      |                                                                                                      |   | 0                                                                                                                                                                                   |   |                                                                                                                                                                                                                                  | 0      |   |   | 89,650 |   |

----

| Exhibit                  Number Referred to in Item 601 of Regulation S-K |   | Description                  of Exhibit                                                                                                                |
|---------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                      |   |                                                                                                                                                   |
| 31.1                                                                      |   | Certification                  of Chief Executive Officer pursuant to Rule 13a-14(a)                                                                   |
| 31.2                                                                      |   | Certification                  of Chief Financial Officer pursuant to Rule 13a-14(a)                                                                   |
| 32.1                                                                      |   | Certification                  of Chief Executive Officer pursuant                  to Rule 13a-14(b) and 18 U.S.C. Section                  1350 |
| 32.2                                                                      |   | Certification                  of Chief Financial Officer pursuant                  to Rule 13a-14(b) and 18 U.S.C. Section                  1350      |

**(2)  **
**Reports        on Form 8-K**

----

**SMITHTOWN        BANCORP, INC.**

**CONSOLIDATED        BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                                                                           |   | As                  of          |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                           |   | March                  31, 2007 |      | December                  31, 2006 |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                     |   |                            |      |   |   |
| Cash                  and due from banks                                                                                                                                                                                                                                                                                                       |   | $                               | 13,941    |   | $ | 27,384 |   |
| Federal                  funds sold                                                                                                                                                                                                                                                                                                            |   |                            | 47,546    |   |   | 236 |   |
| Total                  cash and cash equivalents                                                                                                                                                                                                                                                                                               |   |                            | 61,487    |   |   | 27,620 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Investment                  securities:                                                                                                                                                                                                                                                                                                        |   |                            |      |   |   |   |   |
| Available                  for sale:                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Obligations                  of U.S. government agencies                                                                                                                                                                                                                                                                                       |   |                            | 59,084    |   |   | 84,713 |   |
| Mortgage                  - backed securities                                                                                                                                                                                                                                                                                                  |   |                            | 2,639     |   |   | 2,972 |   |
| Obligations                  of state and political subdivisions                                                                                                                                                                                                                                                                               |   |                            | 8,565     |   |   | 8,943 |   |
| Other                  securities                                                                                                                                                                                                                                                                                                              |   |                            | 5,135     |   |   | 3,968 |   |
| Total                  securities available for sale                                                                                                                                                                                                                                                                                           |   |                            | 75,423    |   |   | 100,596 |   |
| Held                  to maturity:                                                                                                                                                                                                                                                                                                             |   |                            |      |   |   |   |   |
| Mortgage-backed                  securities                                                                                                                                                                                                                                                                                                    |   |                            | 31        |   |   | 41 |   |
| Obligations                  of state and political subdivisions                                                                                                                                                                                                                                                                               |   |                            | 293       |   |   | 374 |   |
| Total                  securities held to maturity (estimated fair value                                                                                                                                                                                                                                                                       |   |                            |           |   |   |  |   |
| $324                  in 2007 and $418 in 2006)                                                                                                                                                                                                                                                                                                |   |                            | 324       |   |   | 415 |   |
| Total                  investment securities                                                                                                                                                                                                                                                                                                   |   |                            | 75,747    |   |   | 101,011 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Restricted                  securities                                                                                                                                                                                                                                                                                                         |   |                            | 2,547     |   |   | 4,249 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Loans                                                                                                                                                                                                                                                                                                                                          |   |                            | 890,505   |   |   | 849,258 |   |
| Less:                  allowance for loan losses                                                                                                                                                                                                                                                                                               |   |                            | 7,414     |   |   | 7,051 |   |
| Loans,                  net                                                                                                                                                                                                                                                                                                                    |   |                            | 883,091   |   |   | 842,207 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Bank                  premises and equipment                                                                                                                                                                                                                                                                                                   |   |                            | 22,334    |   |   | 20,598 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Other                  assets                                                                                                                                                                                                                                                                                                                  |   |                            |      |   |   |   |   |
| Cash                  value of bank-owned life insurance                                                                                                                                                                                                                                                                                       |   |                            | 18,385    |   |   | 18,195 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                       |   |                            | 2,077     |   |   | 2,077 |   |
| Intangible                  assets                                                                                                                                                                                                                                                                                                             |   |                            | 1,471     |   |   | 1,591 |   |
| Other                  real estate owned                                                                                                                                                                                                                                                                                                       |   |                            | 6,972     |   |   | 6,972 |   |
| Due                  from broker                                                                                                                                                                                                                                                                                                               |   |                            | -         |   |   | 9,225 |   |
| Other                                                                                                                                                                                                                                                                                                                                          |   |                            | 15,068    |   |   | 14,479 |   |
| Total                  other assets                                                                                                                                                                                                                                                                                                            |   |                            | 43,973    |   |   | 52,539 |   |
| Total                  assets                                                                                                                                                                                                                                                                                                                  |   | $                               | 1,089,179 |   | $ | 1,048,224 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                                                                                                                                                                                                      |   |                            |      |   |   |   |   |
| Liabilities                                                                                                                                                                                                                                                                                                                                    |   |                            |      |   |   |   |   |
| Deposits:                                                                                                                                                                                                                                                                                                                                      |   |                            |      |   |   |   |   |
| Demand                  (non-interest bearing)                                                                                                                                                                                                                                                                                                 |   | $                               | 103,100   |   | $ | 102,608 |   |
| Money                  market                                                                                                                                                                                                                                                                                                                  |   |                            | 351,634   |   |   | 264,876 |   |
| NOW                                                                                                                                                                                                                                                                                                                                            |   |                            | 37,509    |   |   | 42,003 |   |
| Savings                                                                                                                                                                                                                                                                                                                                        |   |                            | 53,263    |   |   | 50,190 |   |
| Time                                                                                                                                                                                                                                                                                                                                           |   |                            | 408,813   |   |   | 432,640 |   |
| Total                  deposits                                                                                                                                                                                                                                                                                                                |   |                            | 954,319   |   |   | 892,317 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Dividends                  payable                                                                                                                                                                                                                                                                                                             |   |                            | 356       |   |   | 355 |   |
| Other                  borrowings                                                                                                                                                                                                                                                                                                              |   |                            | 35,000    |   |   | 59,580 |   |
| Subordinated                  debt                                                                                                                                                                                                                                                                                                             |   |                            | 18,217    |   |   | 18,217 |   |
| Other                  liabilities                                                                                                                                                                                                                                                                                                             |   |                            | 11,033    |   |   | 10,948 |   |
| Total                  liabilities                                                                                                                                                                                                                                                                                                             |   |                            | 1,018,925 |   |   | 981,417 |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                            |      |   |   |   |   |
| Stockholders'                  equity                                                                                                                                                                                                                                                                                                          |   |                            |      |   |   |   |   |
| Common                  stock - $.01 par value (20,000,000 shares authorized at March 31,2007                  and                  December 31, 2006; 11,852,497 shares issued, 9,800,633 shares outstanding                  at March 31, 2007; 11,826,012 shares isued, 9,774,148 shares outstanding                  at December 31, 2006) |   |                            | 119       |   |   | 108 |   |
| Additional                  paid in capital                                                                                                                                                                                                                                                                                                    |   |                            | 4,302     |   |   | 4,046 |   |
| Retained                  earnings                                                                                                                                                                                                                                                                                                             |   |                            | 76,068    |   |   | 73,046 |   |
| Accumulated                  other comprehensive loss                                                                                                                                                                                                                                                                                          |   |                            | (173      | ) |   | (331 | ) |
|                                                                                                                                                                                                                                                                                                                                           |   |                            | 80,316    |   |   | 76,869 |   |
| Treasury                  stock (2,051,864 shares at cost)                                                                                                                                                                                                                                                                                     |   |                            | (10,062   | ) |   | (10,062 | ) |
| Total                  stockholders' equity                                                                                                                                                                                                                                                                                                    |   |                            | 70,254    |   |   | 66,807 |   |
| **Total                  liabilities and stockholders' equity**                                                                                                                                                                                                                                                                                |   | $                               | 1,089,179 |   | $ | 1,048,224 |   |

----

| **SMITHTOWN                  BANCORP, INC.****CONSOLIDATED                  STATEMENTS OF INCOME**(unaudited)                  (in                  thousands, except per share data) |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                 |   | For                  the Three Months Ended March                  31, |      |
|----------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|-----------|
|                                                                 |   | 2007                                                                        |      | 2006 |   |
| Interest                  income                                     |   |                                                                        |      |   |   |
| Loans                                                                |   | $                                                                           | 17,713    |   | $ | 13,713 |   |
| Federal                  funds sold                                  |   |                                                                        | 311       |   |   | 153 |   |
| Investment                  securities:                              |   |                                                                        |      |   |   |  |   |
| Taxable:                                                             |   |                                                                        |      |   |   |   |   |
| Obligations                  of U.S. treasury                        |   |                                                                        | -         |   |   | 61 |   |
| Obligations                  of U.S. government agencies             |   |                                                                        | 859       |   |   | 853 |   |
| Mortgage                  - backed securities                        |   |                                                                        | 37        |   |   | 58 |   |
| Other                  securities                                    |   |                                                                        | 48        |   |   | 22 |   |
| Subtotal                                                             |   |                                                                        | 944       |   |   | 994 |   |
| Exempt                  from federal income taxes:                   |   |                                                                        |      |   |   |   |   |
| Obligations                  of state & political subdivisions   |   |                                                                        | 79        |   |   | 125 |   |
| Other                  interest income                               |   |                                                                        | 59        |   |   | 47 |   |
| Total                  interest income                               |   |                                                                        | 19,106    |   |   | 15,032 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Interest                  expense                                    |   |                                                                        |      |   |   |   |   |
| Money                  market accounts (including savings)           |   |                                                                        | 3,535     |   |   | 1,880 |   |
| Time                  deposits of $100,000 or more                   |   |                                                                        | 1,959     |   |   | 1,261 |   |
| Other                  time deposits                                 |   |                                                                        | 2,935     |   |   | 2,058 |   |
| Other                  borrowings                                    |   |                                                                        | 384       |   |   | 716 |   |
| Subordinated                  debt                                   |   |                                                                        | 344       |   |   | 210 |   |
| Total                  interest expense                              |   |                                                                        | 9,157     |   |   | 6,125 |   |
| Net                  interest income                                 |   |                                                                        | 9,949     |   |   | 8,907 |   |
| Provision                  for loan losses                           |   |                                                                        | 400       |   |   | 600 |   |
| Net                  interest income after provision for loan losses |   |                                                                        | 9,549     |   |   | 8,307 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Noninterest                  income                                  |   |                                                                        |      |   |   |   |   |
| Trust                  and investment services                       |   |                                                                        | 159       |   |   | 120 |   |
| Service                  charges on deposit accounts                 |   |                                                                        | 427       |   |   | 503 |   |
| Revenues                  from insurance agency                      |   |                                                                        | 903       |   |   | 1,021 |   |
| Net                  loss on sales of investment securities          |   |                                                                        | -         |   |   | (11 | ) |
| Increase                  in cash value of bank owned life insurance |   |                                                                        | 230       |   |   | 157 |   |
| Other                                                                |   |                                                                        | 507       |   |   | 594 |   |
| Total                  noninterest income                            |   |                                                                        | 2,226     |   |   | 2,384 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Noninterest                  expense                                 |   |                                                                        |      |   |   |   |   |
| Salaries                                                             |   |                                                                        | 2,992     |   |   | 2,650 |   |
| Pension                  and other employee benefits                 |   |                                                                        | 740       |   |   | 634 |   |
| Net                  occupancy expense of bank premises              |   |                                                                        | 1,020     |   |   | 873 |   |
| Furniture                  and equipment expense                     |   |                                                                        | 645       |   |   | 538 |   |
| Amortization                  of intangible assets                   |   |                                                                        | 120       |   |   | 246 |   |
| Other                  expense                                       |   |                                                                        | 1,128     |   |   | 1,042 |   |
| Total                  noninterest expense                           |   |                                                                        | 6,645     |   |   | 5,983 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Income                  before income taxes                          |   |                                                                        | 5,130     |   |   | 4,708 |   |
| Provision                  for income taxes                          |   |                                                                        | 1,751     |   |   | 1,630 |   |
| Net                  income                                          |   | $                                                                           | 3,379     |   | $ | 3,078 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Earnings                  per share                                  |   |                                                                        |      |   |   |   |   |
| Basic                  earnings per share                            |   | $                                                                           | 0.35      |   | $ | 0.32 |   |
| Diluted                  earnings per share                          |   | $                                                                           | 0.35      |   | $ | 0.32 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Cash                  dividends declared                             |   | $                                                                           | 0.04      |   | $ | 0.04 |   |
| Weighted                  average common shares outstanding          |   |                                                                        | 9,766,753 |   |   | 9,752,397 |   |
| Weighted                  average common equivalent shares           |   |                                                                        | 9,769,936 |   |   | 9,753,255 |   |
|                                                                 |   |                                                                        |      |   |   |   |   |
| Comprehensive                  income                                |   | $                                                                           | 3,537     |   | $ | 2,983 |   |

----

| **SMITHTOWN                  BANCORP, INC.**                                          |
|---------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY** |
| (unaudited)                                                                           |
| (in                  thousands, except shares                  outstanding)           |

|                                                                      |   | Common                  Stock |      | Additional |   |                     |   |     |         | Other    |   | Unearned                       |   | Total  |               |
|---------------------------------------------------------------------------|--------|-------------------------------|-----------|------------|--------|--------------------------|--------|----------|--------------|----------|--------|--------------------------------|--------|--------|--------------------|
|                                                                      |   | Shares                        |      |       |   | Paid                  In |   | Retained |         | Treasury |   | Comprehensive                  |   | Stock  |               | Stockholders’ |   |
|                                                                      |   | Outstanding                   |      | Amount     |   | Capital                  |   | Earnings |         | Stock    |   | Income                  (Loss) |   | Awards |               | Equity |   |
|                                                                      |   |                          |      |       |   |                     |   |     |         |     |   |                           |   |   |               |   |   |
| Balance                  at 12/31/2005                                    |   |                          | 9,774,148 |       | $      | 72                       |   | $        | 4,408        |     | $      | 62,124                         |   | $      | (10,062            | ) | $ | (601 | ) | $ | (91 | ) | $ | 55,850 |   |
| Comprehensive                  income:                                    |   |                          |      |       |   |                          |   |     |              |     |   |                                |   |   |                    |   |   |   |   |   |  |   |   |  |   |
| Net                  income                                               |   |                          |      |       |   |                          |   |     |              |     |   | 3,078                          |   |   |                    |   |   |   |   |   |  |   |   | 3,078 |   |
| Other                  comprehensive loss                  , net of tax   |   |                          |      |       |   |                          |   |     |              |     |   |                                |   |   |                    |   |   | (95 | ) |   |  |   |   | (95 | ) |
| Total                  comprehensive income                               |   |                          |      |       |   |                          |   |     |              |     |   |                                |   |   |                    |   |   |   |   |   |  |   |   | 2,983 |   |
| Cash                  dividends declared                                  |   |                          |      |       |   |                          |   |     |              |     |   | (355                           | )      |   |                    |   |   |   |   |   |  |   |   | (355 | ) |
| Transfer                  due to the adoption of SFAS 123R                |   |                          |      |       |   |                     |   |     | (91          | )        |   |                           |   |   |               |   |   |   |   |   | 91 |   |   | - |   |
| Stock                  awards vested                                      |   |                          |      |       |   |                     |   |     | 14           |     |   |                           |   |   |               |   |   |   |   |   |  |   |   | 14 |   |
| Stock                  awards granted                                     |   |                          | 16,088    |       |   |                     |   |     | (169         | )        |   |                           |   |   | 169                |   |   |   |   |   |   |   |   | - |   |
| Treasury                  stock purchases                                 |   |                          | (16,088   | )          |   |                |   |     |    |     |   |                      |   |   | (169               | ) |   |    |   |   |    |   |   | (169 | ) |
| Balance                  at 3/31/2006                                     |   |                          | 9,774,148 |       | $      | 72                       |   | $        | 4,162        |     | $      | 64,847                         |   | $      | (10,062            | ) | $ | (696 | ) | $ | - |   | $ | 58,323 |   |
|                                                                      |   |                          |      |       |   |                          |   |     |              |     |   |                           |   |   |                    |   |   |  |   |   |  |   |   |  |   |
| Balance                  at 12/31/2006                                    |   |                          | 9,774,148 |       | $      | 108                      |   | $        | 4,046        |     | $      | 73,046                         |   | $      | (10,062            | ) | $ | (                  331 | ) | $ | - |   | $ | 66,807 |   |
| Comprehensive                  income:                                    |   |                          |      |       |   |                          |   |     |              |     |   |                           |   |   |                    |   |   |  |   |   |  |   |   |  |   |
| Net                  income                                               |   |                          |      |       |   |                          |   |     |              |     |   | 3,379                          |   |   |                    |   |   |  |   |   |  |   |   | 3,379 |   |
| Other                  comprehensive income,                  net of tax  |   |                          |      |       |   |                          |   |     |              |     |   |                           |   |   |                    |   |   | 158 |   |   |   |   |   | 158 |   |
| Total                  comprehensive income                          |   |                          |      |       |   |                          |   |     |              |     |   |                           |   |   |                    |   |   |  |   |   |  |   |   | 3,537 |   |
| Adjustment                  to common stock to reflect 10% stock dividend |   |                          |      |       |   | 11                       |   |     | (11          | )        |   |                           |   |   |               |   |   |   |   |   |   |   |   | - |   |
| Cash                  dividends declared                                  |   |                          |      |       |   |                          |   |     |              |     |   | (357                           | )      |   |                    |   |   |  |   |   |  |   |   | (357 | ) |
| Employee                  stock ownership plan                            |   |                          | 9,325     |       |   |                     |   |     | 225          |     |   |                           |   |   |               |   |   |   |   |   |   |   |   | 225 |   |
| Stock                  awards vested                                      |   |                          |      |       |   |                     |   |     | 42           |     |   |                           |   |   |               |   |   |   |   |   |   |   |   | 42 |   |
| Stock                  awards granted                                     |   |                          | 17,160    |       |   |                     |   |     |         |     |   |                           |   |   |     |   |   |   |   |   |   |   |   | - |   |
| Balance                  at 3/31/2007                                     |   |                          | 9,800,633 |       | $      | 119                      |   | $        | 4,302        |     | $      | 76,068                         |   | $      | (10,062            | ) | $ | (173 | ) | $ | - |   | $ | 70,254 |   |

----

| **SMITHTOWN                  BANCORP, INC.**               |
|------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS** |
| (unaudited)                                                |
| (in                  thousands)                            |

|                                                                                                                |   | For                  the Three Months  |    |
|---------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                                                |   |  Ended                  March 31, |    |
|                                                                                                                |   |                    2007           |    |  2006 |   |
| **Cash                  flows from operating activities**                                                           |   |                                   |    |   |   |
| Net                  income                                                                                         |   | $                                      | 3,379   |   | $ | 3,078 |   |
| Adjustments                  to reconcile net income to net cash provided by operating                  activities: |   |                                   |         |   |   |  |   |
| Depreciation                  on premises and equipment                                                             |   |                                   | 570     |   |   | 453 |   |
| Provision                  for loan losses                                                                          |   |                                   | 400     |   |   | 600 |   |
| Net                  loss on sale of investment securities                                                          |   |                                   | -       |   |   | 11 |   |
| Net                  increase (decrease) in other liabilities                                                       |   |                                   | 83      |   |   | (243 | ) |
| Net                  increase in other assets                                                                       |   |                                   | (53     | ) |   | (949 | ) |
| Net                  increase in deferred taxes                                                                     |   |                                   | (413    | ) |   | (60 | ) |
| Amortization                  of unearned restricted stock awards                                                   |   |                                   | 42      |   |   | 14 |   |
| Increase                  in cash surrender value of officers’ life insurance                  policies       |   |                                   | (230    | ) |   | (157 | ) |
| Amortization                  of investment security premiums and accretion of discounts,                  net      |   |                                   | (9      | ) |   | (1 | ) |
| Amortization                  of intangible assets                                                                  |   |                                   | 120     |   |   | 246 |   |
|  Cash                  provided                  by operating activities                                       |   |                                   | 3,889   |   |   | 2,992 |   |
|                                                                                                                |   |                                   |         |   |   |  |   |
| **Cash                  flows from investing activities**                                                           |   |                                   |         |   |   |  |   |
| Mortgage-backed                  securities:                                                                        |   |                                   |         |   |   |  |   |
| Proceeds                  from calls, repayments, maturities and sales of available for                  sale       |   |                                   | 348     |   |   | 3,804 |   |
| Proceeds                  from calls, repayments and maturities of held to maturity                                 |   |                                   | -       |   |   | 15 |   |
| Other                  securities:                                                                                  |   |                                   |         |   |   |  |   |
| Proceeds                  from calls, repayments, maturities and sales of available for                  sale       |   |                                   | 36,484  |   |   | 16,217 |   |
| Proceeds                  from calls, repayments and maturities of held to maturity                                 |   |                                   | 90      |   |   | 80 |   |
| Purchases                  of investment securities:                                                                |   |                                   |         |   |   |  |   |
| Available                  for sale                                                                                 |   |                                   | (2,160  | ) |   | (24,962 | ) |
| Purchases                  of restricted securities                                                                 |   |                                   | (665    | ) |   | (1,021 | ) |
| Redemptions                  of restricted securities                                                               |   |                                   | 2,367   |   |   | 3,011 |   |
| Loans                  made to customers, net                                                                       |   |                                   | (41,247 | ) |   | (46,748 | ) |
| Purchases                  of premises and equipment                                                                |   |                                   | (2,306  | ) |   | (359 | ) |
|  Cash                  used in investing activities                                                            |   |                                   | (7,089  | ) |   | (49,963 | ) |
|                                                                                                                |   |                                   |         |   |   |  |   |
| **Cash                  flows from financing activities**                                                           |   |                                   |         |   |   |  |   |
| Net                  increase in demand deposits, money market, NOW and savings                                     |   |                                   | 85,829  |   |   | 51,655 |   |
| Net                  increase (decrease) in time deposits                                                           |   |                                   | (23,827 | ) |   | 32,204 |   |
| Cash                  dividends paid                                                                                |   |                                   | (355    | ) |   | (355 | ) |
| Maturities                  of Federal Home Loan Bank term advances                                                 |   |                                   | (20,000 | ) |   | (2,000 | ) |
| Net                  decrease in overnight borrowings                                                               |   |                                   | (4,580  | ) |   | (42,209 | ) |
| Proceeds                  from subordinated debt issue                                                              |   |                                   | -       |   |   | 7,000 |   |
| Purchase                  of treasury stock                                                                         |   |                                   | -       |   |   | (169 | ) |
| Cash                  provided by financing activities                                                              |   |                                   | 37,067  |   |   | 46,126 |   |
|                                                                                                                |   |                                   |         |   |   |  |   |
| Net                  increase (decrease) in cash and cash equivalents                                               |   |                                   | 33,867  |   |   | (845 | ) |
| Cash                  and cash equivalents, beginning of period                                                     |   |                                   | 27,620  |   |   | 13,467 |   |
|                                                                                                                |   |                                   |         |   |   |  |   |
| Cash                  and cash equivalents, end of period                                                           |   | $                                      | 61,487  |   | $ | 12,622 |   |
|                                                                                                                |   |                                   |         |   |   |  |   |
| Supplemental                  disclosures of cash flow information                                                  |   |                                   |         |   |   |  |   |
| Cash                  paid during the period for:                                                                   |   |                                   |         |   |   |  |   |
| Interest                                                                                                            |   | $                                      | 8,896   |   | $ | 5,660 |   |
| Income                  taxes                                                                                       |   |                                   | 899     |   |   | 1,580 |   |
| Noncash                  financing activities                                                                       |   |                                   |    |   |   |   |   |
| Proceeds                  from issuance of common stock                                                             |   | $                                      | 225     |   | $ | - |   |

----

|                                                                   |   | Three                  Months Ended |      |
|------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                   |   | March                  31,          |      | March                  31, |   |
|                                                                   |   | 2007                                |      | 2006 |   |
| Computation                  of per share income                       |   |                                |      |   |   |
| (in                  thousands, except per share data)                 |   |                                |      |   |   |
|                                                                   |   |                                |      |   |   |
| Net                  income                                            |   | $                                   | 3,379     |   | $ | 3,078 |   |
|                                                                   |   |                                |      |   |   |   |   |
| Common                  equivalent shares:                             |   |                                |      |   |   |   |   |
|                                                                   |   |                                |      |   |   |   |   |
| Weighted                  average common shares outstanding*           |   |                                | 9,766,753 |   |   | 9,752,397 |   |
| Weighted                  average common equivalent shares*            |   |                                | 3,183     |   |   | 858 |   |
| Weighted                  average common and common equivalent shares* |   |                                | 9,769,936 |   |   | 9,753,255 |   |
| Basic                  earnings per share                              |   | $                                   | 0.35      |   | $ | 0.32 |   |
| Diluted                  earnings per share                            |   | $                                   | 0.35      |   | $ | 0.32 |   |

----

|                                                |   | For                    the Three Months Ended |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                |   | March                    31, 2007             |   | March                    31, 2006 |   |
|                                                |   | Shares                                        |   | Weighted                    Average                    Grant Date Share Value |   | Shares |   | Weighted                    Average                    Grant Date Share Value |   |
| Nonvested                    at beginning of period |   |                                          | 17,424 |   | $ | 18.74 |   |   | 6,072 |   | $ | 14.95 |   |
| Granted                                             |   |                                          | 17,160 |   |   | 24.13 |   |   | 9,488 |   |   | 17.86 |   |
| Vested                                              |   |                                          | (2,042 | ) |   | 20.82 |   |   | (855 | ) |   | 16.57 |   |
| Nonvested                    at end of period       |   |                                          | 32,542 |   | $ | 21.45 |   |   | 14,705 |   | $ | 16.73 |   |

|                                              |   | For                  the Three Months EndedMarch                  31, |   |
|---------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                              |   | 2007                                                                  |   | 2006 |   |
| 401(K)                  Defined Contribution Plan |   | $                                                                     | 48     |   | $ | 41 |   |
| Employee                  Stock Ownership Plan    |   |                                                                  | 56     |   |   | 50 |   |

|                                          |   | Interest                    Cost |   | Amortization                    Cost |   | Amortization                    of                    Net Gain |   | Total                    Expense |   |
|-----------------------------------------------|--------|----------------------------------|--------|--------------------------------------|--------|----------------------------------------------------------------|--------|----------------------------------|--------|
| For                    the Three Months Ended |   |                             |   |                                 |   |                                                           |   |                             |   |
| March                    31, 2007             |   | $                                | 4      |                                 | $      | 8                                                              |   | $                                | 2      |   | $ | 14 |   |
| March                    31, 2006             |   |                             | 4      |                                 |   | 8                                                              |   |                             | 2      |   |   | 14 |   |

|                                         |   | For                    the Three Months Ended March                    31, |   |
|----------------------------------------------|--------|----------------------------------------------------------------------------|--------|
|                                         |   | 2007                                                                       |   | 2006 |   |
| Incentive                    Retirement Plan |   | $                                                                          | 69     |   | $ | 60 |   |

----

|                                                         |   | For                  the Three Months EndedMarch                  31, |   |
|--------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                                         |   | 2007                                                                  |   | 2006 |   |
| Supplemental                  Executive Retirement Agreement |   | $                                                                     | 90     |   | $ | 60 |   |

----

| -   | EPS growth over first quarter of 2006 equal to              9.37%  |
|---------------|-------------------------------------------------------------------------|
|   |   |
|--------|--------|
| -   | An                increase in net income of $301 or 9.78% over the same period in                2006 |
|---------------|-------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| -   | An                ROAE for the quarter of 19.71% |
|---------------|--------------------------------------------------|
|   |   |
|--------|--------|
| -   | An                ROAE for the last twelve months of 22.10% |
|---------------|-------------------------------------------------------------|
|   |   |
|--------|--------|
| -   | Loan                and deposit growth for the first quarter equal to 4.86% and 6.95%,                respectively with a 41.26% reduction in                borrowings |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |
|--------|--------|
| -   | An                efficiency ratio of 54.94% |
|---------------|----------------------------------------------|

----

|                                                   |   | March                  31, 2007 |                          | December                  31, 2006 |   |
|--------------------------------------------------------|--------|---------------------------------|-------------------------------|------------------------------------|--------|
| Real                  estate loans                     |   |                       |                          |                          |   |    |   |    |   |
| Construction                                           |   | $                               | 238,344                       |                               |   | 26.71 | % | $ | 219,641 |   |   | 25.80 | % |
| Residential                                            |   |                            | 190,092                       |                               |   | 21.30 |   |   | 191,550 |   |   | 22.50 |   |
| Commercial                                             |   |                            | 412,716                       |                               |   | 46.24 |   |   | 391,758 |   |   | 46.02 |   |
| AgriculturalCommercial                  and industrial |   |                            | 1,695                  46,269 |                               |   | .195.18 |   |   | 1,695                  43,775 |   |   | 0.205.15 |   |
| Consumer                                               |   |                            | 3,134                         |                               |   | .35 |   |   | 2,471 |   |   | 0.29 |   |
| Other                  loans                      |   |                            | 262                           |                               |   | .03 |   |   | 367 |   |   | .04 |   |
| Total                  loans                           |   |                            | 892,512                       |                               |   | 100.00 | % |   | 851,257 |   |   | 100.00 | % |
| Less:                                                  |   |                            |                          |                               |   |   |   |   |   |   |   |   |   |
| Deferred                  fees                         |   |                            | 2,007                         |                               |   |   |   |   | 1,999 |   |   |   |   |
| Allowance                  for loan losses             |   |                            | 7,414                         |                               |   |   |   |   | 7,051 |   |   |   |   |
| Loans,                  net                            |   | $                               | 883,091                       |                               |   |   |   | $ | 842,207 |   |   |   |   |

|                                                             |   | March                  31,2007  |   | December                  31,2006 |   |
|------------------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------|--------|
| Securities                  available for sale                   |   |                                 |   |                              |   |
| Obligations                  of U.S. government agencies         |   | $                                    | 59,084 |                              | $      | 84,713 |   |
| Mortgage-backed                  securities                      |   |                                 | 2,639  |                              |   | 2,972 |   |
| Obligations                  of state and political subdivisions |   |                                 | 8,565  |                              |   | 8,943 |   |
| Other                  securities                                |   |                                 | 5,135  |                              |   | 3,968 |   |
| Total                  securities available for sale             |   | $                                    | 75,423 |                              | $      | 100,596 |   |

----

|                                           |   | March                  31,2007  |    | December                  31, 2006 |   |
|------------------------------------------------|--------|--------------------------------------|---------|------------------------------------|--------|
| Demand                  (non interest bearing) |   | $                                    | 103,100 |                               | $      | 102,608 |   |
| Money                  market                  |   |                                 | 351,634 |                               |   | 264,876 |   |
| NOW                                            |   |                                 | 37,509  |                               |   | 42,003 |   |
| Savings                                        |   |                                 | 53,263  |                               |   | 50,190 |   |
| Time                                           |   |                                 | 408,813 |                               |   | 432,640 |   |
| Total                  deposits                |   | $                                    | 954,319 |                               | $      | 892,317 |   |

----

----

| AVERAGE                  BALANCE SHEET AND YIELD ANALYSIS |
|-----------------------------------------------------------|

|                                                        |   | For                  the Three Months Ended March                  31, 2007 |      | For                    the Three Months EndedMarch                  31, 2006 |   |
|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------|-----------|------------------------------------------------------------------------------|--------|
|                                                        |   | Average                                                                     |      |                                                                         |   | Average |   | Average |   |   |   | Average |   |
|                                                        |   | Balance                                                                     |      |  Interest                                                               |   |  Rate |   |                    Balance |   |  Interest |   |  Rate |   |
| ASSETS                                                      |   |                                                                        |      |                                                                         |   |   |   |   |   |   |   |   |   |
|                                                        |   |                                                                        |      |                                                                         |   |   |   |   |   |   |   |   |   |
| Interest-earning                  assets:                   |   |                                                                        |      |                                                                         |   |   |   |   |   |   |   |   |   |
| Investment                  securities:                     |   |                                                                        |      |                                                                         |   |   |   |   |   |   |   |   |   |
| Taxable                                                     |   | $                                                                           | 79,255    |                                                                         | $      | 943 |   |   | 4.76 | % | $ | 96,651 |   | $ | 994 |   |   | 4.12 | % |
| Nontaxable                                                  |   |                                                                        | 9,033     |                                                                         |   | 121 |   |   | 5.37 |   |   | 13,873 |   |   | 190 |   |   | 5.47 |   |
| Total                  investment securities                |   |                                                                        | 88,288    |                                                                         |   | 1,064 |   |   | 4.82 |   |   | 110,524 |   |   | 1,184 |   |   | 4.29 |   |
|                                                        |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |   |   |   |   |   |
| Total                  loans                                |   |                                                                        | 872,059   |                                                                         |   | 17,713 |   |   | 8.17 |   |   | 708,359 |   |   | 13,713 |   |   | 7.74 |   |
| Federal                  funds sold                         |   |                                                                        | 23,910    |                                                                         |   | 311 |   |   | 5.21 |   |   | 13,707 |   |   | 153 |   |   | 4.45 |   |
| Other                  interest-earning assets              |   |                                                                        | 3,306     |                                                                         |   | 60 |   |   | 7.38 |   |   | 4,509 |   |   | 47 |   |   | 4.27 |   |
| Total                  interest-earning assets              |   |                                                                        | 987,563   |                                                                         |   | 19,148 |   |   | 7.80 |   |   | 837,099 |   |   | 15,097 |   |   | 7.21 |   |
| Noninterest-earning                  assets                 |   |                                                                        | 70,161    |                                                                         |   |  |   |   |  |   |   | 57,942 |   |   |   |   |   |  |   |
|                                                        |   |                                                                        |           |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Total                  assets                               |   | $                                                                           | 1,057,724 |                                                                         |   |  |   |   |  |   | $ | 895,041 |   |   |  |   |   |  |   |
|                                                        |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY       |   |                                                                             |      |                                                                         |        |   |   |   |   |   |  |   |   |  |   |
|                                                        |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Liabilities                                                 |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Interest-bearing                  liabilities:              |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Savings                  deposits (including NOW)           |   | $                                                                           | 88,551    |                                                                         | $      | 267 |   |   | 1.21 | % | $ | 76,404 |   | $ | 82 |   |   | 0.44 | % |
| Money                  market                               |   |                                                                        | 317,078   |                                                                         |   | 3,268 |   |   | 4.18 |   |   | 243,791 |   |   | 1,798 |   |   | 2.99 |   |
| Time                  deposits                              |   |                                                                        | 417,819   |                                                                         |   | 4,894 |   |   | 4.75 |   |   | 332,981 |   |   | 3,319 |   |   | 4.04 |   |
| Total                  interest-bearing deposits            |   |                                                                        | 823,448   |                                                                         |   | 8,429 |   |   | 4.09 |   |   | 653,176 |   |   | 5,199 |   |   | 3.23 |   |
|                                                        |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Other                  borrowings                           |   |                                                                        | 38,045    |                                                                         |   | 384 |   |   | 4.09 |   |   | 71,537 |   |   | 716 |   |   | 4.06 |   |
| Subordinated                  debt                          |   |                                                                        | 18,000    |                                                                         |   | 344 |   |   | 7.64 |   |   | 11,156 |   |   | 210 |   |   | 7.54 |   |
| Total                  interest-bearing liabilities         |   |                                                                        | 879,493   |                                                                         |   | 9,157 |   |   | 4.22 |   |   | 735,869 |   |   | 6,125 |   |   | 3.38 |   |
| Non-interest                  bearing liabilities:          |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Demand                  deposits                            |   |                                                                        | 101,479   |                                                                         |   |  |   |   |  |   |   | 96,976 |   |   |  |   |   |  |   |
| Other                  liabilities                          |   |                                                                        | 8,193     |                                                                         |   |  |   |   |  |   |   | 5,019 |   |   |  |   |   |  |   |
| Total                  liabilities                          |   |                                                                        | 989,165   |                                                                         |   |  |   |   |  |   |   | 837,864 |   |   |  |   |   |  |   |
| Stockholders'                  equity                       |   |                                                                        | 68,559    |                                                                         |   |  |   |   |  |   |   | 57,177 |   |   |  |   |   |  |   |
|                                                        |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Total                  liabilites & stockholders equity |   | $                                                                           | 1,057,724 |                                                                         |   |  |   |   |  |   | $ | 895,041 |   |   |  |   |   |  |   |
|                                                        |   |                                                                        |      |                                                                         |   |  |   |   |  |   |   |   |   |   |  |   |   |  |   |
| Net                  interest income/interest rate spread   |   |                                                                        |      |                                                                         | $      | 9,991 |   |   | 3.58 | % |   |   |   | $ | 8,972 |   |   | 3.83 | % |
| Net                  earning assets/net yield on average    |   |                                                                        |      |                                                                         |   |   |   |   |  |   |   |   |   |   |   |   |   |  |   |
| interest                  earning assets                    |   | $                                                                           | 108,070   |                                                                         |   |   |   |   | 4.04 | % | $ | 101,230 |   |   |   |   |   | 4.25 | % |

----

*Accounting        for Certain Hybrid Financial Instruments-an amendment to FASB Statements        No. 133        and 140*

*Accounting        for Servicing of Financial Assets-an amendment of FASB Statement No.        140.”*

*Fair        Value Measurements*

*Accounting        for Uncertainty in Income Taxes - an interpretation of FASB Statement No.        109”*

*Accounting        for Deferred Compensation and Postretirement Benefit Aspects of Endorsement        Split-Dollar Life Insurance Arrangements*

----

| Change                    In Interest RatesIn                    Basis Points |   | As                    of February 28, 2007Potential                    Change In NetInterest                    Income |   | As                    of November 30, 2006Potential                    Change In NetInterest                    Income |   |
|-------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------|--------|
| (Rate                    Shock)                                               |   | $                    Change                                                                                            |   | %                    Change                                                                                            |   | $                    Change |   | %                    Change |   |
| Up                    200 basis points                                        |   |                                                                                                                   | (101   | )                                                                                                                      |   | (.22 | ) |   | 1,617 |   |   | 3.46 |   |
| Up                    100 basis points                                        |   |                                                                                                                   | 1,558  |                                                                                                                   |   | 3.38 |   |   | 1,014 |   |   | 2.17 |   |
| Static                                                                        |   |                                                                                                                   | -      |                                                                                                                   |   | - |   |   | - |   |   | - |   |
| Down                    100 basis points                                      |   |                                                                                                                   | (304   | )                                                                                                                      |   | (.66 | ) |   | (641 | ) |   | (1.37 | ) |
| Down                      200 basis points                                    |   |                                                                                                                   | 340    |                                                                                                                   |   | .74 |   |   | (1,735 | ) |   | (3.71 | ) |

----

|         |                                                    |                                                        |
|--------------|---------------------------------------------------------|-------------------------------------------------------------|
|         |                                                    | SMITHTOWN                BANCORP,                INC.  |
|         |                                                    |                                                        |
|         |                                                    | May 9, 2007                                            |
|    |                                               |                                                   |
|              |                                                         | /s/ Bradley E. Rock                                         |
|         | Bradley                E. Rock, Chairman, President and |
|         | Chief Executive                Officer                  |

|   |                                                         |                |
|--------|--------------------------------------------------------------|---------------------|
|        |                                                              | /s/ Anita M. Florek |
|   | Anita                M. Florek, Executive Vice President and |
|   | Chief Financial                Officer                       |

----