Famed investor Warren Buffett has become the second largest owner of First Empire State Corp. after converting preferred stock in the Buffalo bank into a half-million common shares worth $125 million.

The conversion represents a solid vote of confidence by "one of the savviest investors in the world," said Brett Erensel, an analyst with UBS Securities. By contrast, Mr. Buffett last year unloaded a large position in the preferred stock of Salomon Brothers Inc.

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