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FIRST EMPIRE RELEASES YEAR-END EARNINGS

 FIRST EMPIRE RELEASES YEAR-END EARNINGS
 BUFFALO, N.Y., Jan. 9 /PRNewswire/ -- First Empire State Corporation


("First Empire") (AMEX: FES) today announced 1991 net income of $67.2 million, a 25 percent increase from the $53.9 million earned in 1990. Earnings per common share were $9.32, an 18 percent improvement from last year's $7.91. Net income in 1991's fourth quarter was $18.2 million, a 40 percent rise from the $13.0 million earned in 1990's final quarter, while earnings per common share were $2.49, 30 percent above the $1.92 achieved in the comparable 1990 quarter. The rate of increase in 1991 per share earnings was less than that of net income principally due to dividends paid on $40 million of 9 percent convertible preferred stock issued in March of 1991.
 Average earning assets reached $8.0 billion in 1991, up 23 percent from the prior year. The growth in earning assets was largely the result of the May 31, 1991 acquisition of approximately $1.6 billion in selected earning assets of the former Goldome. This growth helped taxable-equivalent net interest income increase by 41 percent to $337.4 million in 1991, from $239.4 million the year before. Net interest income also benefited from the expansion of the spread between the yield on earning assets and the rate paid on interest-bearing liabilities, which widened to 3.56 percent in 1991 from 2.83 percent in 1990. Net interest income, expressed as an annualized percentage on average earning assets, was 4.22 percent in 1991 compared to 3.69 percent in the prior year.
 The provision for possible credit losses totaled $63.4 million in 1991, a more than two-fold increase from the $27.4 million recorded in 1990. The larger provision reflected increased net charge-offs, which rose $44.1 million or .75 percent of average loans outstanding in 1991 from $13.5 million or .27 percent in 1990, a higher level of nonperforming loans, and management's concern over sluggish economic conditions. Nonperforming loans totaled $89.7 million or 1.48 percent of loans outstanding at Dec. 31, 1991, compared to $52.3 million or .97 percent the year earlier. The 1991 provision, combined with a $6.0 million purchase accounting adjustment related to loans which were acquired in the Goldome acquisition, boosted the allowance for loan losses to $100.3 million, or 1.66 percent of net loans at year-end, compared to $75.0 million or 1.40 percent at Dec. 31, 1990.
 Noninterest income jumped 48 percent to $82.0 million in 1991 from $55.6 million in 1990. Contributing to this increase was a one-time gain of $5.6 million on the sale of approximately $185 million of 1-4 family residential loan participations. Other expense totaled $232.6 million in 1991, up 34 percent from 1990's $173.9 million. The higher expenses were caused in part by additional operating expenses associated with the September 1990 Empire Federal Savings Bank of America acquisition and 1991's Goldome transaction.
 The annualized rate of return on average total assets rose to .81 percent in 1991 from .79 percent in 1990. Return on average common stockholders' equity improved to 13.82 percent in 1991 from 13.00 percent in 1990.
 First Empire's year-end balance sheet reflected total assets of $9.2 billion, up from $7.7 billion at Dec. 31, 1990. Loans and leases, net of unearned discount, amounted to $6.0 billion, up from $5.4 billion a year earlier. Largely the result of the Goldome acquisition, deposits rose $1.3 billion or 21 percent from 1990, to $7.5 billion at Dec. 31, 1991. At the 1991 year-end, stockholders' equity, which includes $40 million received from the March 1991 issuance of preferred stock, amounted to $535.8 million, compared with $437.2 million at Dec. 31, 1990. On a per common share basis, stockholders' equity at Dec. 31, 1991 was $73.91, up 12 percent from $65.94 a year ago.
 First Empire State Corporation is a bank holding company whose principal banking subsidiaries are Manufacturers and Traders Trust Company (Buffalo, N.Y.), The East New York Savings Bank (New York City) and The First National Bank of Highland (Highland, N.Y.).
 FIRST EMPIRE STATE CORPORATION
 Condensed Consolidated Statement of Income
 Three months ended
 Dollars in thousands, December 31
 except per share 1991 1990 Change
 Net interest income $97,261 $62,804 55 pct
 Less: Provision for
 possible credit losses 19,200 8,830 117
 Gains on sales of bank
 investment securities 221 -- --
 Other income 21,607 15,302 41
 Less:
 Salaries & employee benefits 27,774 23,769 17
 Other expenses 40,085 25,403 58
 Income before income taxes 32,030 20,104 59
 Applicable income taxes 13,822 7,134 94
 Net income 18,208 12,970 40
 Dividends on preferred stock $900 -- N/A
 Per common share:
 Net income
 Primary $2.49 $1.92 30
 Fully diluted 2.43 1.91 27
 Cash dividends $.35 $.35 --
 Common shares outstanding,
 in thousands:
 Average 6,956 6,760 3
 Period end 6,708 6,630 1
 PERFORMANCE RATIOS, annualized
 Net income to:
 Average total assets .81 pct .69 pct
 Average common
 stockholders' equity 14.07 pct 11.94 pct
 Net interest margin (A) 4.63 pct 3.61 pct
 Twelve months ended
 Dollars in thousands, December 31
 except per share 1991 1990 Change
 Net interest income $328,808 $230,448 43 pct
 Less: Provision for
 possible credit losses 63,412 27,412 131
 Gains on sales of bank
 investment securities 450 4 --
 Other income 81,579 55,584 47
 Less:
 Salaries & employee benefits 106,446 88,024 21
 Other expenses 126,184 85,867 47
 Income before income taxes 114,795 84,733 35
 Applicable income taxes 47,601 30,791 55
 Net income 67,194 53,942 25
 Dividends on preferred stock $2,860 -- N/A
 Per common share:
 Net income
 Primary $9.32 $7.91 18
 Fully diluted 9.15 7.91 16
 Cash dividends $1.40 $1.25 12
 Common shares outstanding
 in thousands:
 Average 6,905 6,818 1
 Period end 6,708 6,630 1
 PERFORMANCE RATIOS, annualized
 Net income to:
 Average total assets .81 pct .79 pct
 Average common
 stockholders' equity 13.82 pct 13.00 pct
 Net interest margin (A) 4.22 pct 3.69 pct
 (A) -- On a fully taxable equivalent basis.
 FIRST EMPIRE STATE CORPORATION
 Condensed Consolidated Balance Sheet
 December 31
 In thousands 1991 1990 Change
 ASSETS
 Cash and due from banks $ 269,168 235,805 14 pct
 Money-market assets 110,308 594,173 (81)
 Investment securities 2,585,986 1,423,217 82
 Loans and leases, net of
 unearned discount 6,046,554 5,372,893 13
 Less: Allowance for
 possible credit losses 100,265 74,982 34
 Net loans and leases 5,946,289 5,297,911 12
 Other assets 259,315 164,279 58
 Total assets $9,171,066 7,715,385 19
 LIABILITIES AND EQUITY
 Demand deposits in U.S.
 offices $ 655,876 622,490 5 pct
 Other deposits in U.S.
 offices 6,592,219 5,406,888 22
 Deposits in foreign offices 226,229 171,632 32
 Total deposits 7,474,324 6,201,010 21
 Short-term borrowings 1,022,430 971,817 5
 Accrued interest and
 other liabilities 129,060 102,141 26
 Long-term borrowings and
 capital leases 9,477 3,205 196
 Total liabilities 8,635,291 7,278,173 19
 Stockholders' equity 535,775 437,212 23
 Total liabilities and
 stockholders' equity $9,171,066 7,715,385 19
 -0- 1/9/92
 /CONTACT: Gary S. Paul of First Empire State Corp., 716-842-5130/
 (FES) CO: First Empire State Corp. ST: New York IN: FIN SU: ERN


KK -- CL006 -- 8231 01/09/92 12:44 EST
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Date:Jan 9, 1992
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/C O R R E C T I O N -- FIRST EMPIRE STATE CORPORATION/(Correction Notice)

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