Exhibit No. 99.1




FIRST EMPIRE STATE CORPORATION ONE M&T PLAZA BUFFALO, NEW YORK 14240 
NEWS RELEASE


    CONTACT:  Gary S. Paul             FOR IMMEDIATE RELEASE
              (716) 842-5130           January 31, 1997


BUFFALO, New York  First Empire State Corporation ("First Empire") (AMEX:FES)
today announced the completion of a trust preferred stock offering that raised
$150 million of capital.  The 30-year offering of 8.234% fixed-rate cumulative
trust preferred stock was sold through First Empire Capital Trust I (the
"Trust"), a Delaware business trust that was formed by First Empire to
facilitate the transaction.  The preferred stock provides investors with call
protection for ten years.  Dividends will be paid semi-annually, beginning
August 1, 1997.

The Trust was formed solely to issue the trust preferred stock and advance 
the proceeds to First Empire by purchasing its junior subordinated debt.  The 
proceeds of the trust preferred stock will qualify as Tier 1 or core capital 
for First Empire under the Federal Reserve Board's risk-based capital 
guidelines, and will be available for general corporate purposes.  Payments 
on the junior subordinated debt of First Empire, which are in turn passed 
through the Trust to the preferred stockholders, will be serviced through 
existing liquidity and cash flow sources of First Empire. Under current 
federal tax law, First Empire will also be permitted to deduct dividend 
payments on the trust preferred stock.

First Empire, which reported consolidated total assets of $12.9 billion at
December 31, 1996, is a bank holding company whose other subsidiaries include
Manufacturers and Traders Trust Company (Buffalo, New York), The East New York
Savings Bank (New York, New York) and M&T Bank, National Association (Oakfield,
New York).