Roundup: Lending Propels Earnings at First Empire

Net interest income growth from mortgage originations and credit card activities drove up yearend net income at First Empire State Corp. by 15%, to $151.1 million.

The Buffalo banking company reported fourth-quarter net income of $40.4 million, or $5.68 a share, up from $36.8 million, or $5.03, a year earlier. For the year, earnings per common share rose 18%, to $20.97, from $17.78 in 1995.

Gary S. Paul, senior vice president of corporate finance at $13 billion- asset First Empire, said the earnings were in line with expectations but just a tad stronger than analysts' had expected.

"Loan growth was very strong for the year, up 14%, which propelled a solid gain in net interest income," Mr. Paul said. "Fee-income growth from mortgage banking and credit cards had helped."

In 1997, he added, First Empire can expect loan growth in the 10% range. Loans totaled $10.7 billion in 1996, up from $9.6 billion at the end of 1995.

"Continued loan growth came from the bank's higher-yield customers, and income from merchant banking and credit card fees will continue this year," said Kevin Timmons, bank analyst at First Albany Corp.

Mr. Timmons said 1996 earnings were 13 cents higher than his expectation, and he estimated 1997 earnings per share would be about $24.

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