Exhibit No. 11.1 - ----------------------------------------------------------------------------------------------------------- FIRST EMPIRE STATE CORPORATION AND SUBSIDIARIES - ----------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED MARCH 31 COMPUTATION OF EARNINGS PER COMMON SHARE AMOUNTS IN THOUSANDS, EXCEPT PER SHARE 1997 1996 - ----------------------------------------------------------------------------------------------------------- Primary Average common shares outstanding...................... 6,685 6,399 Common stock equivalents *............................. 415 379 - ----------------------------------------------------------------------------------------------------------- Primary common shares outstanding...................... 7,100 6,778 - ----------------------------------------------------------------------------------------------------------- Net income............................................. $41,259 36,153 Less: Cash dividends on preferred stock................ -- 900 - ----------------------------------------------------------------------------------------------------------- Net income available to common shareholders........... $41,259 35,253 - ----------------------------------------------------------------------------------------------------------- Earnings per common share--primary..................... $5.81 5.20 - ----------------------------------------------------------------------------------------------------------- Fully diluted Average common shares outstanding...................... 6,685 6,399 Common stock equivalents *............................. 429 406 Assumed conversion of 9% convertible preferred stock....................................... -- 490 - ----------------------------------------------------------------------------------------------------------- Fully diluted average common shares outstanding..... 7,114 7,295 - ----------------------------------------------------------------------------------------------------------- Net income..................................... $41,259 36,153 - ----------------------------------------------------------------------------------------------------------- Earnings per common share--fully diluted....... $5.80 4.96 - ----------------------------------------------------------------------------------------------------------- * Represents shares of First Empire's common stock issuable upon the assumed exercise of outstanding stock options granted pursuant to the First Empire State Corporation 1983 Stock Option Plan under the "treasury stock" method of accounting.