Exhibit 99
[LETTERHEAD]
CONTACT: Gary S. Paul FOR IMMEDIATE RELEASE:
(716) 842-5130 January 9, 1998
BUFFALO, NEW YORK -- First Empire State Corporation ("First Empire")
(AMEX: FES) today reported diluted earnings per share of $25.26 in 1997, an
increase of 20% from $21.08 in 1996. Net income for 1997 rose 17% to $176.2
million from $151.1 million in 1996. For the fourth quarter of 1997, diluted
earnings per common share increased 17% to $6.66 from $5.70 earned in the
year-earlier quarter. Net income in the recently completed quarter was $46.3
million, an increase of 15% from $40.4 million earned in the final quarter of
1996. All earnings per share amounts reflect the implementation of Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share."
SFAS No. 128 establishes new standards for computing and presenting earnings
per share and is effective for financial statements for both interim and
annual periods ending after December 15, 1997. SFAS No. 128 requires that all
prior period earnings per share data be restated to conform with the
provisions of the statement.
Taxable-equivalent net interest income increased 5% to $562.7 million in
1997 from $535.5 million in 1996. Average loans outstanding totaled $11.0
billion in 1997, an 8% increase from $10.1 billion in 1996. The beneficial
impact on net interest income of growth in loans exceeded the effect of a
narrowing of the spread between yields on earning assets and
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FIRST EMPIRE STATE CORPORATION
rates paid on interest-bearing liabilities. As a result of such narrowing, net
interest margin, or taxable-equivalent net interest income expressed as a
percentage of average earning assets, was 4.38% in 1997 compared with 4.45% in
1996.
The provision for possible credit losses was $46.0 million in 1997,
compared with $43.3 million in 1996. Net charge-offs for 1997 were $41.8
million or .38% of average loans, compared with $35.2 million or .35% in the
prior year. Consumer loan net charge-offs for the recent year were $35.9
million, compared with $28.5 million in 1996. The allowance for possible credit
losses was $274.7 million or 2.39% of loans outstanding at December 31, 1997,
compared with $270.5 million or 2.52% at the prior year-end. Nonperforming
loans totaled $80.7 million at December 31, 1997, compared with $97.9 million at
December 31, 1996. The ratio of the allowance to nonperforming loans was 341%
and 276% at December 31, 1997 and 1996, respectively. Assets taken in
foreclosure of defaulted loans were $8.4 million and $8.5 million at the end of
1997 and 1996, respectively.
Other income rose 13% to $193.1 million in 1997 from $170.2 million in
1996. Higher revenues associated with mortgage banking and trust activities
contributed to this increase. Other expense was $421.8 million in 1997, up 3%
from $409.0 million in 1996. Included in other expense for 1996 was a $7.0
million charge for a special assessment by the Federal Deposit Insurance
Corporation
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to recapitalize the Savings Association Insurance Fund.
The rates of return on average total assets and average common
stockholders' equity in 1997 were 1.32% and 18.49%, respectively, compared with
1.21% and 17.60% in 1996.
At December 31, 1997, First Empire had total assets of $14.0 billion,
compared with $12.9 billion a year earlier. Loans and leases, net of
unearned discount, were $11.5 billion at the end of 1997, up from $10.7
billion at December 31, 1996. Deposits were $11.2 billion and $10.5 billion
at December 31, 1997 and 1996, respectively. Total common stockholders'
equity was $1.0 billion or 7.36% of total assets at year-end 1997, compared
with $906 million or 7.00% a year earlier. Common stockholders' equity per
share was $155.86 at the recent year-end and $135.45 at December 31, 1996.
As previously announced, in October 1997 First Empire entered into a
definitive agreement with ONBANCorp, Inc., Syracuse, New York, for a merger
between the two companies. The merger is subject to the approval of
stockholders of both companies, as well as various regulatory agencies, and is
expected to be completed in the first quarter of 1998.
In February 1997, First Empire announced a plan to repurchase up to 303,317
shares of its common stock for
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FIRST EMPIRE STATE CORPORATION
reissuance upon the possible future exercise of outstanding stock options. As
of December 31, 1997, First Empire had repurchased
178,011 common shares pursuant to such plan at an average cost of
$331.78.
First Empire is a bank holding company with subsidiaries that include
Manufacturers and Traders Trust Company (Buffalo, New York) and M&T Bank,
National Association (Oakfield, New York).
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Condensed Consolidated Statement of Income
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
AMOUNTS IN THOUSANDS, --------------------- ---------------------
EXCEPT PER SHARE 1997 1996 CHANGE 1997 1996 CHANGE
- --------------------------------------------------------- ---------- --------- ----------- ---------- --------- -----------
Net interest income...................................... $ 142,283 136,624 4% $ 556,868 531,024 5%
Less: Provision for possible credit losses............... 12,000 11,475 5 46,000 43,325 6
Gain (loss) on sales of bank investment securities....... -- (449) -- (280) (37) --
Other income............................................. 52,979 48,090 10 193,347 170,285 14
Less:
Salaries and employee benefits........................... 54,627 54,564 -- 220,017 208,342 6
Other expenses........................................... 56,089 52,518 7 201,759 200,636 1
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Income before income taxes............................... 72,546 65,708 10 282,159 248,969 13
Applicable income taxes.................................. 26,246 25,288 4 105,918 97,866 8
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Net income............................................... $ 46,300 40,420 15% $ 176,241 151,103 17%
Taxable-equivalent net interest income................... $ 143,896 137,853 4% $ 562,708 535,511 5%
Dividends on preferred stock............................. $ -- -- -- $ -- 900 -100%
Per common share:
Net income
Basic.................................................. $ 7.01 6.03 16% $ 26.60 22.54 18%
Diluted................................................ 6.66 5.70 17 25.26 21.08 20
Net income excluding securities transactions
Basic.................................................. 7.01 6.07 15 26.63 22.54 18
Diluted................................................ 6.66 5.73 16 25.29 21.08 20
Cash dividends........................................... $ 0.80 0.70 14% $ 3.20 2.80 14%
Common shares outstanding:
Average (1).............................................. 6,955 7,098 -2% 6,977 7,170 -3%
Period end............................................... 6,610 6,686 -1% 6,610 6,686 -1%
Performance ratios, annualized
Net income to:
Average total assets..................................... 1.33% 1.26% 1.32% 1.21%
Average common stockholders' equity...................... 18.25% 18.05% 18.49% 17.60%
Yield on average earning assets (2)...................... 8.34% 8.31% 8.34% 8.32%
Cost of interest-bearing liabilities..................... 4.70% 4.54% 4.64% 4.52%
Net interest spread (2).................................. 3.64% 3.77% 3.70% 3.80%
Contribution of interest-free funds...................... 0.69% 0.69% 0.68% 0.65%
Net interest margin (2).................................. 4.33% 4.46% 4.38% 4.45%
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(1) Includes common stock equivalents
(2) On a fully taxable-equivalent basis
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Condensed Consolidated Balance Sheet
DECEMBER 31
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DOLLARS IN THOUSANDS 1997 1996 CHANGE
- ----------------------------------------------------------- ------------ ---------- -------------
ASSETS
Cash and due from banks.................................... $ 333,805 324,659 3%
Money-market assets........................................ 111,046 209,968 -47
Investment securities...................................... 1,725,218 1,571,698 10
Loans and leases, net of unearned discount................. 11,496,568 10,722,123 7
Less: Allowance for possible credit losses................. 274,656 270,466 2
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Net loans and leases....................................... 11,221,912 10,451,657 7
Other assets............................................... 610,954 385,933 58
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Total assets............................................... $ 14,002,935 12,943,915 8%
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LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing deposits at U.S. offices............... $ 1,458,241 1,352,929 8%
Interest-bearing deposits at U.S. offices.................. 9,453,989 8,968,324 5
Deposits at foreign office................................. 250,928 193,236 30
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Total deposits............................................. 11,163,158 10,514,489 6
Short-term borrowings...................................... 1,097,324 1,150,187 -5
Accrued interest and other liabilities..................... 284,368 195,578 45
Long-term borrowings....................................... 427,819 178,002 140
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Total liabilities.......................................... 12,972,669 12,038,256 8
Stockholders' equity (1)................................... 1,030,266 905,659 14
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Total liabilities and stockholders' equity................. $ 14,002,935 12,943,915 8%
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(1) Includes the after-tax impact of net unrealized gains (losses) on investment
securities classified as available for sale of $12.0 million at December 31,
1997 and ($2.5) million at December 31, 1996.
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Condensed Consolidated Average Balance Sheet
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
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DOLLARS IN THOUSANDS 1997 1996 CHANGE 1997 1996 CHANGE
- ---------------------------------------- ------------- ---------- -------------- ------------- ---------- -----------
ASSETS
Money-market assets..................... $ 137,992 122,201 13% $ 165,041 123,523 34%
Investment securities................... 1,721,290 1,659,285 4 1,699,004 1,806,250 -6
Loans and leases, net of unearned
discount.............................. 11,326,679 10,526,960 8 10,973,250 10,113,947 8
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Total earning assets.................... 13,185,961 12,308,446 7 12,837,295 12,043,720 7
Other assets............................ 598,656 419,604 43 471,264 434,946 8
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Total assets............................ $ 13,784,617 12,728,050 8% $ 13,308,559 12,478,666 7%
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LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits............... $ 9,945,128 9,391,917 6% $ 9,724,628 8,991,125 8%
Borrowings.............................. 1,295,212 1,067,353 21 1,226,166 1,321,767 -7
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Total interest-bearing liabilities...... 11,240,340 10,459,270 7 10,950,794 10,312,892 6
Noninterest-bearing deposits............ 1,316,385 1,216,588 8 1,228,203 1,168,987 5
Other liabilities....................... 221,307 161,330 37 176,541 133,654 32
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Total liabilities....................... 12,778,032 11,837,188 8 12,355,538 11,615,533 6
Stockholders' equity
Preferred............................... -- -- -- -- 9,618 -100
Common.................................. 1,006,585 890,862 13 953,021 853,515 12
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Total stockholders' equity.............. 1,006,585 890,862 13 953,021 863,133 10
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Total liabilities and stockholders'
equity................................ $ 13,784,617 12,728,050 8% $ 13,308,559 12,478,666 7%
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