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FIRST EMPIRE RELEASES SECOND QUARTER EARNINGS

 FIRST EMPIRE RELEASES SECOND QUARTER EARNINGS
 BUFFALO, N.Y., July 8 /PRNewswire/ -- First Empire State


Corporation ("First Empire") (AMEX: FES) today reported net income of $27.8 million or $3.82 per common share for the three months ended June 30, 1992. The second quarter's results included $7.6 million of after-tax gains realized on sales of bank investment securities. Net income excluding these gains totaled $20.2 million or $2.74 per common share, a 24 percent and 22 percent improvement from the $16.3 million and $2.24 per common share earned in 1991's second quarter. For the first half of this year, net income increased 75 percent to $55.3 million from $31.6 million in the comparable 1991 period, while earnings per common share rose 71 percent to $7.63 from $4.46 a year ago. The 1992 six-month results include $16.1 million of after-tax securities gains, which contributed $2.30 to per share earnings.
 Average earning assets reached $8.6 billion in the second quarter of 1992, up 12 percent from the prior year. The growth in earning assets was largely the result of the May 31, 1991 acquisition of selected earning assets of the former Goldome. This growth helped taxable-equivalent net interest income climb 35 percent to $104.6 million in the recent quarter, from $77.5 million the year before. Net interest income also benefited from an expansion of the spread between the yield on earning assets and the rate paid on interest- bearing liabilities, which widened to 4.37 percent in 1992's second quarter
from 3.33 percent a year ago. Net interest income, expressed as an annualized percentage of average earning assets, was 4.90 percent in the recent quarter compared with 4.07 percent in the second quarter of 1991.
 The provision for possible credit losses was $24.1 million in 1992's second quarter, up from the $11.5 million recorded in the comparable 1991 quarter. Net charge-offs totaled $6.9 million in the recent quarter compared with $7.4 million in 1991's second quarter. Nonperforming loans rose to $97.7 million or 1.60 percent of loans outstanding at June 30, 1992, compared with $76.1 million or 1.19 percent a year ago. The higher provision, which was prompted by the rise in nonperforming loans as well as continued uncertainty surrounding future economic conditions, boosted the allowance for loan losses to $127.7 million, or 2.09 percent of net loans at the recent quarter-end, compared with $89.8 million or 1.40 percent at June 30, 1991.
 Other income in this year's second quarter was $37.5 million, more than double the $18.3 million reported in 1991's second quarter. The recent quarter's sales of bank investment securities contributed $13.6 million to the increase. In addition, most categories of other income showed improvement from the prior year. Other expense was $70.2 million for the quarter, up 29 percent from $54.4 million in the second quarter of 1991. Costs associated with upgrading First Empire's computer systems as well as write-downs of mortgage servicing assets and venture capital investments contributed to the expense increase.
 Exclusive of security transactions, the annualized rate of return on average total assets was .91 percent in the recent quarter, while the return on average common stockholders' equity was 14.55 percent. These rates of return were .82 percent and 13.57 percent, respectively, in 1991's second quarter.
 First Empire's June 30, 1992 balance sheet reflected total assets of $8.75 billion, down from $9.67 billion at the comparable 1991 quarter-end. Loans and leases, net of unearned discount, amounted to $6.12 billion compared with $6.40 billion at June 30, 1991. Deposits fell 12 percent from a year ago, to $7.13 billion at the recent quarter end. Total stockholders' equity grew to $584.9 million at June 30, 1992 from $505.6 million a year earlier. Common stockholders' equity per share at the recent quarter end increased to $80.94, up 16 percent from $69.64 at June 30, 1991. The June 30 totals do not include the impact of the company's July 1, 1992 acquisitions of Central Trust Company, Rochester, N.Y. and Endicott Trust Company, Endicott, N.Y.
 First Empire State Corporation is a bank holding company whose subsidiaries include Manufacturers and Traders Trust Company (Buffalo, N.Y.) and The East New York Savings Bank (New York City, N.Y.).
 FIRST EMPIRE STATE CORPORATION
 Condensed Consolidated Statement of Income
 Three months ended
 Dollars in thousands, June 30
 except per share 1992 1991 Change
 Net interest income $102,941 $75,178 37 pct
 Less: Provision for
 possible credit losses 24,127 11,515 110
 Gains (losses) on sales of bank
 investment securities 13,620 (86) -
 Other income 23,890 18,373 30
 Less:
 Salaries & employee benefits 30,570 25,778 19
 Other expenses 39,610 28,589 39
 Income before income taxes 46,144 27,583 67
 Applicable income taxes 18,382 11,274 63
 Net income $27,762 16,309 70
 Dividends on preferred stock $900 900
 Per common share:
 Net income
 Primary $3.82 2.24 71
 Fully diluted 3.68 2.20 67
 Net income excluding securities
 transactions
 Primary 2.74 2.25 22
 Fully diluted 2.67 2.21 21
 Cash dividends 0.40 0.35 14
 Common shares outstanding
 in thousands:
 Average (A) 7,033 6,888 2
 Period end 6,733 6,686 1
 PERFORMANCE RATIOS, annualized
 Net income to:
 Average total assets 1.25 pct 0.82 pct
 Average common
 stockholders' equity 20.29 pct 13.53 pct
 Net interest margin (B) 4.90 pct 4.07 pct
 Six months ended
 Dollars in thousands, June 30
 except per share 1992 1991 Change
 Net interest income $204,684 $145,395 41 pct
 Less: Provision for
 possible credit losses 41,845 22,256 88
 Gains (losses) on sales of bank
 investment securities 27,990 (84) -
 Other income 47,171 33,517 41
 Less:
 Salaries & employee benefits 61,714 49,424 25
 Other expenses 83,489 53,020 57
 Income before income taxes 92,797 54,128 71
 Applicable income taxes 37,497 22,496 67
 Net income $55,300 31,632 75
 Dividends on preferred stock $1,800 1,060
 Per common share:
 Net income
 Primary $7.63 $4.46 71
 Fully diluted 7.34 4.40 67
 Net income excluding securities
 transactions
 Primary 5.33 4.47 19
 Fully diluted 5.20 4.41 18
 Cash dividends 0.80 0.70 14
 Common shares outstanding
 in thousands:
 Average (A) 7,016 6,853 2
 Period end 6,733 6,686 1
 PERFORMANCE RATIOS, annualized
 Net income to:
 Average total assets 1.24 pct 0.82 pct
 Average common
 stockholders' equity 20.60 pct 13.68 pct
 Net interest margin (B) 4.87 pct 4.06 pct
 (A) -- Includes common stock equivalents
 (B) -- On a fully taxable-equivalent basis.
 FIRST EMPIRE STATE CORPORATION
 Condensed Consolidated Balance Sheet
 June 30
 In thousands 1992 1991 Change
 ASSETS
 Cash and due from banks $ 256,231 237,613 8 pct
 Money-market assets 523,456 1,289,104 (59)
 Investment securities 1,766,639 1,585,815 11
 Loans and leases, net of
 unearned discount 6,120,771 6,399,033 (4)
 Less: Allowance for possible
 credit losses 127,695 89,842 42
 Net loans and leases 5,993,076 6,309,191 (5)
 Other assets 212,275 243,756 (13)
 Total assets $8,751,677 9,665,479 (9)pct
 LIABILITIES AND EQUITY
 Demand deposits in U.S.
 offices $743,203 630,631 18 pct
 Other deposits in U.S. offices 6,250,001 7,323,277 (15)
 Deposits in foreign offices 139,907 143,365 (2)
 Total deposits 7,133,111 8,097,273 (12)
 Short-term borrowings 918,081 918,646 -
 Accrued interest and other
 liabilities 113,451 133,676 (15)
 Long-term borrowings and
 capital leases 2,122 10,237 (79)
 Total liabilities 8,166,765 9,159,832 (11)
 Stockholders' equity 584,912 505,647 16
 Total liabilities and
 stockholders' equity $8,751,677 9,665,479 (9)pct
 -0- 7/8/92
 /CONTACT: Gary S. Paul of First Empire State Corporation, 716-842-5130/
 (FES) CO: First Empire State Corporation ST: New York IN: FIN SU: ERN


KK -- CL009 -- 7325 07/08/92 10:03 EDT
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Date:Jul 8, 1992
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