- -------------------------------------------------------------------------------------------- FIRST EMPIRE STATE CORPORATION AND SUBSIDIARIES - -------------------------------------------------------------------------------------------- COMPUTATION OF EARNINGS PER COMMON SHARE Amounts in thousands, except per share Three months ended March 31 1996 1995 - -------------------------------------------------------------------------------------------- Primary Average common shares outstanding 6,399 6,589 Common stock equivalents* 379 231 - -------------------------------------------------------------------------------------------- Primary common shares outstanding 6,778 6,820 - -------------------------------------------------------------------------------------------- Net income $36,153 27,168 Less: Cash dividends on preferred stock 900 900 - -------------------------------------------------------------------------------------------- Net income available to common shareholders $35,253 26,268 - -------------------------------------------------------------------------------------------- Earnings per common share - primary $5.20 3.85 - -------------------------------------------------------------------------------------------- Fully diluted Average common shares outstanding 6,399 6,589 Common stock equivalents* 406 288 Assumed conversion of 9% convertible preferred stock 490 507 - -------------------------------------------------------------------------------------------- Fully diluted average common shares outstanding 7,295 7,384 - -------------------------------------------------------------------------------------------- Net income $36,153 27,168 - -------------------------------------------------------------------------------------------- Earnings per common share - fully diluted $4.96 3.68 - -------------------------------------------------------------------------------------------- * 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. -23-