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.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.