First Empire State Boosts Earnings
First Empire State Corp. reported a 20% rise in earnings, to $17.4 million, in the third quarter.
Almost one-third of the Buffalo-based company's profits came from a one-time gain of $5.6 million on the sale of $185 million in one- to four-family residential loan participations. Excluding the extraordinary gain, earnings would have been down slightly from last year because of growing loan-loss provisions.
Average earning assets grew by 35%, and net interest income rose 47%, to $86.1 million. Both were swelled by First Empire's acquisition of $1.6 billion in assets from failed Goldome in the second quarter.
Nonperformers Rise 21%
Nonperforming loans vaulted to $92 million in the third quarter, up 21% from the total at June 30. First Empire made a $22 million provision for problem loans, up 95% from the previous quarter. The company's reserves stood at a strong 111% of nonperforming loans at Sept. 30.
Spokesman Gary S. Paul said that the company had decided on the large provision because of "an uncertain economic climate" in upstate New York.