Exhibit No.11.1 - -------------------------------------------------------------------------------- FIRST EMPIRE STATE CORPORATION AND SUBSIDIARIES - -------------------------------------------------------------------------------- THREE MONTHS ENDED SIX MONTHS ENDED COMPUTATION OF EARNINGS PER COMMON SHARE JUNE 30 JUNE 30 AMOUNTS IN THOUSANDS, EXCEPT PER SHARE 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------------------------- Primary Average common shares outstanding 6,627 6,832 6,656 6,616 Common stock equivalents * 301 380 358 379 - --------------------------------------------------------------------------------------------------------------- Primary common shares outstanding 6,928 7,212 7,014 6,995 - --------------------------------------------------------------------------------------------------------------- Net income $42,791 38,659 84,050 74,812 Less: Cash dividends on preferred stock 0 0 0 900 - --------------------------------------------------------------------------------------------------------------- Net income available to common shareholders $42,791 38,659 84,050 73,912 - --------------------------------------------------------------------------------------------------------------- Earnings per common share--primary $ 6.17 5.36 11.98 10.56 - --------------------------------------------------------------------------------------------------------------- Fully diluted Average common shares outstanding 6,627 6,832 6,656 6,616 Common stock equivalents * 323 384 376 384 Assumed conversion of 9% convertible preferred stock 0 0 0 245 - --------------------------------------------------------------------------------------------------------------- Fully diluted average common shares outstanding 6,950 7,216 7,032 7,245 - --------------------------------------------------------------------------------------------------------------- Net income $42,791 38,659 84,050 74,812 - --------------------------------------------------------------------------------------------------------------- Earnings per common share--fully diluted $ 6.15 5.36 11.95 10.32 - --------------------------------------------------------------------------------------------------------------- - ------------------------ * 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.