<PAGE>1
Exhibit 99.1
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Financial Statements and Additional Information
December 31, 1993 and 1992
<PAGE>2
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Financial Statements and Additional Information
Index
- ---------------------------------------------------------------------------
Page
Report of independent accountants 3
Financial statements:
Statement of net assets available for plan benefits as of
December 31, 1993 and 1992 4
Statement of changes in net assets available for plan benefits
for the years ended December 31, 1993 and 1992 5
Notes to financial statements 6
Exhibit I - Allocation of net assets available
for plan benefits to investment programs as of
December 31, 1993 and 1992 11
Exhibit II - Allocation of changes in net assets
available for plan benefits to investment programs
for the years ended December 31, 1993 and 1992 13
Additional information:
Schedule I - Schedule of assets held for investment
at December 31, 1993 15
Schedule II - Schedule of transactions in excess of 5% of
fair value of plan assets for the year ended
December 31, 1993 21
<PAGE>3
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
To the Participants and Administrative Committee of
the First Empire State Corporation
Retirement Savings Plan and Trust
We have audited the accompanying statement of net assets available for plan
benefits of the First Empire State Corporation Retirement Savings Plan and
Trust (the Plan) as of December 31, 1993 and 1992 and the related statement
of changes in net assets available for plan benefits for the years then
ended. These financial statements are the responsibility of the Plan's
Administrative Committee. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in
all material respects, the net assets available for plan benefits of the
First Empire State Corporation Retirement Savings Plan and Trust at
December 31, 1993 and 1992, and the changes in its net assets available for
plan benefits for the years then ended in conformity with generally
accepted accounting principles.
As discussed in Note 2 to the financial statements, the Plan changed its
method of accounting for benefit payments for the year ended December 31,
1993.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included
in Schedules I and II is presented for purposes of additional analysis and
is not a required part of the basic financial statements but is additional
information required by ERISA. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
/s/ PRICE WATERHOUSE
- ------------------------------
PRICE WATERHOUSE
Buffalo, New York
March 15, 1994
<PAGE>4
<TABLE>
<CAPTION>
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Statement of Net Assets Available for Plan Benefits
December 31
-----------
1993 1992
---- ----
ASSETS
<S> <C> <C>
Cash $ 20,681 24,465
Investments, at current value:
Short-term investments (cost: $9,369,804 and
$9,093,204) 9,369,804 9,093,204
Common stock (cost: $20,093,839 and $13,444,485) 29,143,251 21,618,035
U.S. government and agency obligations (cost:
$2,664,196 and $1,767,317) 2,790,214 1,873,652
Corporate bonds (cost: $1,083,088 and $223,356) 1,104,164 226,813
Loans to participants 1,515,189 1,182,054
----------- -----------
Total investments 43,922,622 33,993,758
Receivables:
Employee contributions 98,745 70,128
Employer contributions 64,173 45,983
Interest and dividends 60,805 44,392
----------- -----------
Total receivables 223,723 160,503
----------- -----------
Total assets 44,167,026 34,178,726
LIABILITIES
Benefits payable - 527,103
Due to broker 212,814 26,409
----------- -----------
Total liabilities 212,814 553,512
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $43,954,212 33,625,214
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>5
<TABLE>
<CAPTION>
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31
----------------------
1993 1992
---- ----
ADDITIONS TO NET ASSETS AVAILABLE FOR PLAN BENEFITS
<S> <C> <C>
Net investment income:
Interest $ 563,168 678,321
Dividends 383,469 264,154
Net realized gain (loss) on sale of investments 71,023 (50,527)
Net appreciation in current value of investments 1,277,410 4,119,057
----------- -----------
Total net investment income 2,295,070 5,011,005
Contributions:
Employee 6,445,933 3,728,340
Employer 3,133,797 2,306,946
----------- -----------
Total contributions 9,579,730 6,035,286
----------- -----------
11,874,800 11,046,291
DEDUCTIONS FROM NET ASSETS AVAILABLE FOR
PLAN BENEFITS
Benefit payments to participants (2,072,905) (1,318,639)
----------- -----------
Net increase in net assets available for
plan benefits before cumulative effect of
change in method of accounting for benefit
payments to participants 9,801,895 9,727,652
Cumulative effect on prior year of change in
method of accounting for benefit payments
to participants (note 2) 527,103 -
----------- -----------
NET INCREASE IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS 10,328,998 9,727,652
----------- -----------
Net assets available for plan benefits at
beginning of year 33,625,214 23,897,562
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT
END OF YEAR $43,954,212 33,625,214
=========== ===========
Proforma net increase in net assets available
for plan benefits assuming the change in method
of accounting for benefit payments to
participants is applied retroactively $ 9,801,895 9,795,510
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>6
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
1. DESCRIPTION OF PLAN
GENERAL
The following description of the First Empire State Corporation
Retirement Savings Plan and Trust ("the Plan") is provided for general
information purposes and is qualified in its entirety by reference to
the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
ELIGIBILITY AND PARTICIPATION
The Plan is a defined contribution plan and was established for the
benefit of permanent full-time employees of First Empire State
Corporation and its subsidiaries ("the Company"). Persons who are at
least 21 years of age and have completed 12 months of continuous serv-
ice are eligible to participate in the Plan. Eligible employees may
elect to participate effective the first day of any January, April,
July or October subsequent to meeting the eligibility criteria.
ADMINISTRATION
The Plan is administered by a committee (Administrative Committee)
which is appointed by the Board of Directors of Manufacturers and
Traders Trust Company ("M&T Bank"), a wholly-owned subsidiary of First
Empire State Corporation ("First Empire"). The assets of the Plan are
held by M&T Bank, as Trustee. The Wyatt Company, an actuarial and
consulting firm, provides recordkeeping services on an individual
participant basis to the Plan.
The Board of Directors of M&T Bank has the right to terminate, amend
or modify the Plan at any time subject to the Plan provisions. Upon
Plan termination, participants will receive the assets allocated to
their accounts.
CONTRIBUTIONS
Contributions to the Plan are made by the participants through salary
reduction and by the Company through employer matching contributions.
The participants may elect to reduce their compensation by a specified
whole percentage not to exceed 8%, subject to certain limitations
under Section 401(k) and Section 415 of the Internal Revenue Code.
The Company remits to the Plan on behalf of each participant the
amount by which the participant's compensation is reduced. In addi-
tion, the Company makes an employer matching contribution in an amount
equal to 75% of the participant's contribution limited to 4.5% of the
participant's compensation. Compensation is generally defined in the
Plan to mean a participant's base salary for the calendar year
excluding any form of additional compensation. Generally, total
annual contributions may not exceed the lesser of 25% of compensation,
as defined in the Internal Revenue Code, or $30,000, adjusted for
inflation. An individual participant's pre-tax contribution was lim-
ited to $8,994 in 1993 and $8,728 in 1992. Contributions above this
limit were treated as post-tax contributions.
<PAGE>7
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
Participants' accounts, including all salary reduction contributions,
employer matching contributions and increments thereon are at all
times fully vested and nonforfeitable.
INVESTMENT PROGRAMS
Participants may invest their salary reduction contributions in the
common stock of First Empire State Corporation (the "First Empire
stock fund"), equity securities other than those of First Empire (the
"diversified equity fund"), short-term fixed income securities other
than those of First Empire (the "money-market fund") or long-term
fixed income securities other than those of First Empire (the "bond
fund") in increments of 25%. A separate account is maintained for
each participant's interest in each fund. There were 2,395 par-
ticipants in the First Empire stock fund, 1,583 in the diversified
equity fund, 1,310 in the money-market fund and 1,272 in the bond fund
at December 31, 1993. A total of 2,695 employees of the Company were
active participants in the Plan at December 31, 1993. The allocation
of net assets available for Plan benefits to investment programs and
allocation of changes in net assets available for Plan benefits to
investment programs are set forth in Exhibit I and II, respectively.
On January 1, April 1, July 1 and October 1 of each year, participants
may, in accordance with the rules of the Plan, transfer existing
balances among the available investment funds, reduce or increase the
percentage of salary reduction elected and/or redirect their current
salary reduction contributions into different funds. Contributions
may be suspended at any time.
EMPLOYER MATCHING CONTRIBUTIONS
Employer matching contributions are invested in the above funds in the
same proportion as elected by the participants.
LOANS TO PARTICIPANTS
Upon written application to the Administrative Committee, participants
may borrow from their account an amount not to exceed the lesser of
(1) 50% of the participant's vested account balance as of the most
recent valuation date or (2) $50,000 reduced by the participant's
highest outstanding loan balance in the twelve months prior to the
date of loan origination. The minimum loan amount is $1,000. Loans
bear interest at one percentage point above prime as designated by M&T
Bank and are repaid in equal installments through after-tax payroll
deductions for a period of up to five years.
WITHDRAWALS AND DISTRIBUTIONS
A participant undergoing financial hardship may make withdrawals from
the Plan while employed by the Company, subject to Plan limitations.
Upon termination of employment for any reason, participants are
entitled to a distribution of the full amount of individual account
balances as of the revaluation date immediately following such
termination of service.
Unless the participant elects otherwise, distribution of the full
amount of the participant's account balance will be made no later than
60 days after the close of the calendar year in which the last of the
following
<PAGE>8
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
occurs: (a) the participant attains age 65; (b) the tenth anniversary
of the year in which participation began; or (c) the participant
terminates service with the Company. The participant may elect to
defer distribution until no later than April 1 of the calendar year
following the year in which age 70-1/2 is attained.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounts of the Plan are maintained on the accrual basis.
INVESTMENTS
Investments are reported on a current value basis. Investments of the
First Empire stock fund, diversified equity fund, money-market fund
and bond fund are traded on national securities exchanges and are
valued using the last reported sales price prior to the close of the
Plan year. Loans to participants are valued by the Administrative
Committee as no active market exists for such loans. The loans, which
are fully secured by a portion of the participant's vested benefits,
were determined to have a current value which approximates the
outstanding principal balance of the loans at both December 31, 1993
and 1992.
Investment income of the First Empire stock fund, diversified equity
fund, money-market fund and bond fund is allocated to participants
based on their proportionate share of the respective investment fund's
net assets. Interest income on loans to participants is allocated to
the participants based on their respective loan agreement.
BENEFIT PAYMENTS TO PARTICIPANTS
During 1993, the Plan changed its method of accounting for benefit
payments to participants by no longer accruing for benefit payments
payable to participants at the end of the period. This change was
made to comply with reporting standards established by the American
Institute of Certified Public Accountants as set forth in its Audit
and Accounting Guide, "Audits of Employee Benefit Plans", revised as
of May 1, 1993. In accordance with Accounting Principles Board
Opinion No. 20, "Accounting Changes", the financial statements for
1992 are presented as previously reported. The cumulative effect of
applying the new method of accounting is to increase the amount
reported as net increase in net assets available for plan benefits for
the year ended December 31, 1993 by $527,103. The proforma net
increase in net assets available for plan benefits as though the
change in accounting had been adopted retroactively is shown on the
Statement of Changes in Net Assets Available for Plan Benefits and in
Exhibit II.
Amounts payable to participants who have elected to make withdrawals
from the Plan amounted to $603,796 at December 31, 1993; $210,907 in
the First Empire stock fund, $120,436 in the diversified equity fund,
$204,527 in the money-market fund, and $67,926 in the bond fund.
ADMINISTRATIVE EXPENSES
Expenses related to administration of the Plan are paid by the
Company. Brokerage commissions, transfer taxes and similar costs of
acquiring or
<PAGE>9
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
selling securities are paid by the Plan. The Plan paid $15,999 and
$17,944 for brokerage commissions in 1993 and 1992, respectively.
These amounts have been included in the net realized gain or loss on
sale of investments and the net appreciation or depreciation in fair
market value of investments for those securities acquired during the
year in the Statement of Changes in Net Assets Available for Plan
Benefits.
3. INCOME TAXES
The Internal Revenue Service has issued a favorable determination
letter regarding the qualified and tax-exempt status of the Plan under
Sections 401 and 501 of the Internal Revenue Code. Accordingly, no
provision has been made for income taxes.
Participants are not subject to Federal or state income tax on
employer matching contributions and pre-tax participant salary
reduction contributions until such contributions are withdrawn or
distributed. The earnings and appreciation of the assets of the Plan
are not subject to Federal or state income taxation until withdrawn or
distributed.
4. PLAN AMENDMENTS
Effective January 1, 1993, the Plan was amended to add special
eligibility rules for former Central Trust Company of Rochester, New
York and Endicott Trust Company of Endicott, New York employees who
became employees of the Company after the Company merged these
institutions into M&T Bank simultaneously with their acquisition on
July 1, 1992.
5. RELATED PARTY TRANSACTIONS
During 1993, the Plan acquired in the open market, in 36 transactions,
36,408 shares of First Empire common stock at a cost of $5,146,869.
The Plan disposed of, in 11 transactions, 2,809 shares of First Empire
common stock which resulted in proceeds of $394,984 and realized gains
of $14,825. In addition, 165,729 shares of First Empire common stock
with a total cost of $14,913,922 and a fair market value of
$23,326,357 were held at December 31, 1993.
6. EMPLOYER AND EMPLOYEE CONTRIBUTIONS
The following table represents employer and employee contributions for
the year ended December 31, 1993:
Employee Employer
contributions contributions
------------- -------------
M&T Bank $5,798,161 2,820,953
The East New York Savings Bank 558,760 280,981
M&T Mortgage Corporation 89,012 31,863
---------- ----------
$6,445,933 3,133,797
========== ==========
The East New York Savings Bank and M&T Mortgage Corporation are
wholly- owned subsidiaries of First Empire and M&T Bank, respectively.
7. NET REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS
Net realized gain (loss) on sale of investments is comprised of the
following:
<PAGE>10
<TABLE>
<CAPTION>
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
Net
realized
Total Basis of gain
proceeds assets sold (loss)
-------- ----------- -------
<S> <C> <C> <C>
For the year ended December 31, 1993:
First Empire common stock $ 394,984 380,159 $ 14,825
Other common stock 982,585 944,198 38,387
U.S. government and agency
obligations 1,214,840 1,198,029 16,811
Corporate bonds 258,198 257,198 1,000
---------- ---------- ---------
$2,850,607 2,779,584 $ 71,023
========== ========== =========
For the year ended December 31, 1992:
First Empire common stock $ 175,603 128,475 $ 47,128
Other common stock 1,826,495 1,925,031 (98,536)
U.S. government and agency
obligations 554,836 554,299 537
Corporate bonds 51,625 51,281 344
---------- ---------- ---------
$2,608,559 2,659,086 $ (50,527)
========== ========== =========
In accordance with the requirements of ERISA, the basis of assets sold is equal to either the fair market
value at the beginning of the period, for securities held as of that date, or cost, for securities
acquired during the year.
8. NET APPRECIATION IN CURRENT VALUE OF INVESTMENTS
Net appreciation in current value of investments is comprised of the following:
Current Basis of
value at assets held
end of at end Net
period of period appreciation
------ --------- ------------
<S> <C> <C> <C>
For the year ended
December 31, 1993:
First Empire common stock $23,326,357 22,538,195 $ 788,162
Other common stock 5,816,894 5,381,390 435,504
U.S. government and agency
obligations 2,790,214 2,755,523 34,691
Corporate bonds 1,104,164 1,085,111 19,053
----------
$1,277,410
==========
For the year ended
December 31, 1992:
First Empire common stock $17,771,485 13,937,863 $3,833,622
Other common stock 3,846,550 3,567,052 279,498
U.S. government and agency
obligations 1,873,652 1,869,900 3,752
Corporate bonds 226,813 224,628 2,185
----------
$4,119,057
==========
In accordance with the requirements of ERISA, the basis of assets held at end of period is equal to either
the fair market value at the beginning of the period, for securities held as of that date, or cost, for
securities acquired during the year.
</TABLE>
<PAGE>11
<TABLE>
<CAPTION>
Exhibit I
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Allocation of Net Assets Available for Plan Benefits to Investment Programs
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
FIRST EMPIRE DIVERSIFIED MONEY- BOND PARTICIPANT
STOCK FUND EQUITY FUND MARKET FUND FUND LOAN ACCOUNT TOTAL
---------- ----------- ----------- ------ ------------ -----
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Cash $ 317 - 20,271 93 - $ 20,681
Investments, at current value
(cost $15,189,628, $6,099,121,
$8,129,981 and $3,792,197):
Short-term investments 275,706 919,204 8,129,981 44,913 - 9,369,804
Common stock 23,326,357 5,816,894 - - - 29,143,251
U.S. government and agency
obligations - - - 2,790,214 - 2,790,214
Corporate bonds - - - 1,104,164 - 1,104,164
Loans to participants - - - - 1,515,189 1,515,189
----------- ----------- ----------- ----------- ----------- -----------
Total investments 23,602,063 6,736,098 8,129,981 3,939,291 1,515,189 43,922,622
Receivables:
Employee contributions 50,566 22,805 13,607 11,767 - 98,745
Employer contributions 32,414 14,913 9,029 7,817 - 64,173
Interest and dividends - 8,386 - 52,419 - 60,805
----------- ------------ ----------- ----------- ----------- -----------
Total receivables 82,980 46,104 22,636 72,003 - 223,723
----------- ------------ ----------- ----------- ----------- -----------
Total assets 23,685,360 6,782,202 8,172,888 4,011,387 1,515,189 44,167,026
LIABILITIES
Due to broker 212,814 - - - - 212,814
----------- ------------ ----------- ------------ ------------ ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 23,472,546 6,782,202 8,172,888 4,011,387 1,515,189 $43,954,212
============ ========= ========= ========= ========= ===========
</TABLE>
<PAGE>12
<TABLE>
<CAPTION>
Exhibit I
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Allocation of Net Assets Available for Plan Benefits to Investment Programs
December 31, 1992
- --------------------------------------------------------------------------------------------------------------
FIRST EMPIRE DIVERSIFIED MONEY- BOND PARTICIPANT
STOCK FUND EQUITY FUND MARKET FUND FUND LOAN ACCOUNT TOTAL
---------- ----------- ----------- ------ ------------ -----
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Cash $ - 1,748 22,597 120 - $ 24,465
Investments, at current value
(cost $10,008,572, $3,794,307,
$8,731,759 and $1,993,724):
Short-term investments 2,914 355,480 8,731,759 3,051 - 9,093,204
Common stock 17,771,485 3,846,550 - - - 21,618,035
U.S. government and agency
obligations - - - 1,873,652 - 1,873,652
Corporate bonds - - - 226,813 - 226,813
Loans to participants - - - - 1,182,054 1,182,054
------------ ------------ ----------- ----------- ----------- ----------
Total investments 17,774,399 4,202,030 8,731,759 2,103,516 1,182,054 33,993,758
Receivables:
Employee contributions 37,175 11,143 13,833 7,977 - 70,128
Employer contributions 23,919 7,380 9,289 5,395 - 45,983
Interest and dividends - 7,222 - 37,170 - 44,392
------------ ------------ ----------- ----------- ----------- ----------
Total receivables 61,094 25,745 23,122 50,542 - 160,503
------------ ------------ ----------- ----------- ----------- ----------
Total assets 17,835,493 4,229,523 8,777,478 2,154,178 1,182,054 34,178,726
LIABILITIES
Benefits payable 109,764 49,345 303,465 64,529 - 527,103
Due to broker - 26,409 - - - 26,409
------------ ------------ ----------- ----------- ----------- ----------
Total liabilities 109,764 75,754 303,465 64,529 - 553,512
------------ ------------ ----------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $17,725,729 4,153,769 8,474,013 2,089,649 1,182,054 $33,625,214
=========== ============ =========== =========== =========== ===========
</TABLE>
<PAGE>13
<TABLE>
<CAPTION>
Exhibit II
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Allocation of Changes in Net Assets Available for Plan Benefits to Investment Programs
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
FIRST EMPIRE DIVERSIFIED MONEY- BOND PARTICIPANT
STOCK FUND EQUITY FUND MARKET FUND FUND LOAN ACCOUNT TOTAL
---------- ----------- ----------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Net investment income:
Interest $ 4,043 25,772 235,561 197,244 100,548 $ 563,168
Dividends 291,614 91,855 - - - 383,469
Net realized gain on sale
of investments 14,825 38,387 - 17,811 - 71,023
Net appreciation in current
value of investments 788,162 435,504 - 53,744 - 1,277,410
---------- --------- ---------- ----------- ----------- -----------
Total net investment income 1,098,644 591,518 235,561 268,799 100,548 2,295,070
Contributions:
Employee 3,125,379 1,343,886 1,071,032 905,636 - 6,445,933
Employer 1,670,919 555,572 537,205 370,101 - 3,133,797
---------- --------- ---------- ----------- ----------- -----------
Total contributions 4,796,298 1,899,458 1,608,237 1,275,737 - 9,579,730
---------- --------- ---------- ----------- ----------- -----------
5,894,942 2,490,976 1,843,798 1,544,536 100,548 11,874,800
DEDUCTIONS FROM NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Benefit payments to participants (916,554) (203,030) (691,947) (261,374) - (2,072,905)
INTERFUND TRANSFERS
Loans, net of repayments 140,738 (92,389) (291,299) (90,185) 333,135 -
Reallocation of investments -
additions (deductions) 517,927 383,531 (1,465,142) 664,232 (100,548) -
---------- --------- ---------- ----------- ----------- -----------
658,665 291,142 (1,756,441) 574,047 232,587 -
---------- --------- ---------- ----------- ----------- -----------
Net increase (decrease) in net
assets available for plan benefits
before cumulative effect of change
in method of accounting for bene-
fit payments to participants 5,637,053 2,579,088 (604,590) 1,857,209 333,135 9,801,895
Cumulative effect on prior year of
change in method of accounting
for benefit payments to
participants (note 2) 109,764 49,345 303,465 64,529 - 527,103
---------- --------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR PLAN
BENEFITS $5,746,817 2,628,433 (301,125) 1,921,738 333,135 $10,328,998
========== ========== ========== ========== ========== ===========
The proforma net increase (decrease) in net assets available for plan benefits assuming the change in method
of accounting for benefit payments to participants is applied retroactively is equal to the net increase
(decrease) in net assets available for plan benefits before cumulative effect of change in method of
accounting for benefit payments to participants.
</TABLE>
<PAGE>14
<TABLE>
<CAPTION>
Exhibit II
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Allocation of Changes in Net Assets Available for Plan Benefits to Investment Programs
December 31, 1992
- --------------------------------------------------------------------------------------------------------------
FIRST EMPIRE DIVERSIFIED MONEY- BOND PARTICIPANT
STOCK FUND EQUITY FUND MARKET FUND FUND LOAN ACCOUNT TOTAL
---------- ----------- ----------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Net investment income:
Interest $ 4,049 11,234 299,415 144,102 219,521 $ 678,321
Dividends 191,835 72,319 - - - 264,154
Net realized gain (loss) on
sale of investments 47,128 (98,536) - 881 - (50,527)
Net appreciation in current
value of investments 3,833,623 279,497 - 5,937 - 4,119,057
---------- --------- ---------- ----------- ----------- -----------
Total net investment income 4,076,635 264,514 299,415 150,920 219,521 5,011,005
Contributions:
Employee 1,794,305 641,061 954,329 338,645 - 3,728,340
Employer 1,057,254 402,165 627,374 220,153 - 2,306,946
---------- --------- ---------- ----------- ----------- -----------
Total contributions 2,851,559 1,043,226 1,581,703 558,798 - 6,035,286
---------- --------- ---------- ----------- ----------- -----------
6,928,194 1,307,740 1,881,118 709,718 219,521 11,046,291
DEDUCTIONS FROM NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Benefit payments to participants (464,818) (107,167) (571,018) (175,636) - (1,318,639)
INTERFUND TRANSFERS
Loans, net of repayments (201,499) (35,486) (193,295) (27,996) 458,276 -
Reallocation of investments -
additions (deductions) 1,261,412 123,628 (1,240,570) (62,784) (81,686) -
---------- --------- ---------- ----------- ----------- -----------
1,059,913 88,142 (1,433,865) (90,780) 376,590 -
---------- --------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR PLAN
benefits $7,523,289 1,288,715 (123,765) 443,302 596,111 $ 9,727,652
========== ========== ========== =========== =========== ===========
Proforma net increase (decrease)
in net assets available for plan
benefits assuming the change in
method of accounting for benefit
payments to participants is
applied retroactively $7,520,803 1,289,593 (59,394) 448,394 596,111 $ 9,795,510
========== ========== ========== =========== =========== ===========
</TABLE>
<PAGE>15
<TABLE>
<CAPTION>
Schedule I
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Assets Held for Investment
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Number of
shares or
principal Total Current value
Name and title of issue amount Unit cost cost Per Unit Total
- ----------------------- ------- --------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS
Vision Fiduciary Funds, Inc. Money
Market Fund 9,369,804 $100.000 $9,369,804 $100.000 $9,369,804
---------- ----------
Total short-term investments $9,369,804 $9,369,804
---------- ----------
COMMON STOCK
Consumer products and services:
Albertson's Inc. 1,000 $21.488 $ 21,488 $26.750 $26,750
Alltrista Corporation 625 17.909 11,193 17.000 10,625
Ball Corporation 3,700 30.528 112,953 30.250 111,925
CPC International Inc. 3,500 43.042 150,647 47.625 166,688
Colgate Palmolive Company 1,000 52.195 52,195 62.375 62,375
Dun & Bradstreet Companies, Inc. 1,300 54.081 70,305 61.625 80,113
First Brands Corporation 3,500 31.904 111,664 34.500 120,750
Kmart Corporation 3,200 22.896 73,268 21.500 68,800
McGraw Hill Inc. 1,000 67.370 67,370 67.625 67,625
Paramount Communications, Inc. 2,000 51.475 102,950 77.750 155,500
PepsiCo, Inc. 1,000 26.665 26,665 40.875 40,875
Stride Rite Corp. 3,000 25.970 77,909 16.375 49,125
Toys-R-Us, Inc. 1,300 34.320 44,616 40.875 53,138
Walt Disney Co. 1,600 43.495 69,592 42.625 68,200
---------- ------------
Total consumer products and services 992,815 1,082,489
---------- ------------
</TABLE>
<PAGE>16
<TABLE>
<CAPTION>
Schedule I
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Assets Held for Investment
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Number of
shares or
principal Total Current value
Name and title of issue amount Unit cost cost Per Unit Total
- ----------------------- ------- --------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
Energy:
Burlington Resources Inc. 1,300 $52.399 $68,119 $42.375 $55,087
Exxon Corporation 1,200 53.173 63,807 63.125 75,750
Nabors Industries, Inc. 12,000 9.537 114,440 8.125 97,500
Schlumberger Limited 1,000 57.680 57,680 59.125 59,125
Ultramar Corp. 7,000 18.421 128,948 25.375 177,625
Unocal Corp. 6,700 26.481 177,424 27.875 186,762
---------- ------------
Total energy 610,418 651,849
---------- ------------
Financial:
American International Group Inc. 1,100 56.872 62,559 87.750 96,525
Federal National Mortgage Association 1,000 58.348 58,348 78.500 78,500
First Empire State Corporation* 165,729 89.990 14,913,922 140.750 23,326,357
General Reinsurance Corp. 600 85.778 51,467 107.000 64,200
Morgan, JP & Company, Inc. 1,200 54.675 65,610 69.375 83,250
---------- ------------
Total financial 15,151,906 23,648,832
---------- ------------
Health care:
Bristol-Myers Squibb Co. 1,000 77.363 77,363 58.250 58,250
Johnson & Johnson Co. 1,200 48.798 58,558 44.875 53,850
Merck & Co., Inc. 1,500 51.539 77,309 34.375 51,563
Mylan Laboratories, Inc. 2,500 18.996 47,491 25.375 63,438
---------- ------------
Total health care 260,721 227,101
---------- ------------
* See note 5 to the financial statements
</TABLE>
<PAGE>17
<TABLE>
<CAPTION>
Schedule I
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Assets Held for Investment
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Number of
shares or
principal Total Current value
Name and title of issue amount Unit cost cost Per Unit Total
- ----------------------- ------- --------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
Industrials:
Aluminum Company of America 1,000 $70.370 $70,370 $69.375 $69,375
Avnet Inc. 3,300 31.446 103,771 39.000 128,700
Commercial Metals Co. 6,666 19.518 130,108 28.125 187,481
Cooper Industries Inc. 2,000 52.682 105,363 49.250 98,500
Corning Inc. 2,800 36.570 102,396 28.000 78,400
Dresser Industries Inc. 4,000 23.120 92,480 20.750 83,000
Emerson Electric Company 1,400 47.976 67,167 60.250 84,350
Kirby Corp. 7,500 17.621 132,158 21.375 160,312
Santa Fe Pacific Corp. 11,000 17.535 192,885 22.250 244,750
Zero Corp. 9,500 14.234 135,224 16.125 153,187
---------- ------------
Total industrials 1,131,922 1,288,055
---------- ------------
Materials:
Champion International Corp. 3,200 30.074 96,236 33.375 106,800
Dupont (E.I.) DeNemours & Company 3,100 48.968 151,802 48.250 149,575
Hercules, Inc. 1,600 75.443 120,709 113.500 181,600
International Paper Co. 1,000 68.245 68,245 67.750 67,750
Material Sciences Corp. 10,000 16.907 169,069 22.875 228,750
Newmont Mining Company 3,200 49.731 159,138 57.625 184,400
Pall Corp. 4,000 20.430 81,718 18.375 73,500
Worthington Industries Inc. 6,000 16.833 101,000 20.500 123,000
---------- ------------
Total materials 947,917 1,115,375
---------- ------------
</TABLE>
<PAGE>18
<TABLE>
Schedule I
<CAPTION>
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Assets Held for Investment
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Number of
shares or
principal Total Current value
Name and title of issue amount Unit cost cost Per Unit Total
- ----------------------- ------- --------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
Technology:
AMP Inc. 1,800 $62.322 $112,180 $63.125 $113,625
Continuum Company Inc. 6,600 19.662 129,767 19.250 127,050
Hewlett-Packard Co. 1,600 62.740 100,384 79.000 126,400
Motorola, Inc. 1,300 39.021 50,727 92.250 119,925
Texas Instruments, Inc. 1,700 58.046 98,679 63.500 107,950
----------- ------------
Total technology 491,737 594,950
----------- ------------
Transportation:
Greyhound Lines, Incorporated 13,000 13.028 169,358 11.500 149,500
UAL Corp. 600 157.952 94,771 146.000 87,600
----------- ------------
Total transportation 264,129 237,100
----------- ------------
Utilities:
American Telephone & Telegraph Co. 2,300 40.265 92,610 52.500 120,750
MCI Communications Corp 3,000 15.843 47,530 28.250 84,750
SCE Corp. 4,600 22.203 102,134 20.000 92,000
----------- ------------
Total utilities 242,274 297,500
----------- ------------
Total common stock $20,093,839 $ 29,143,251
----------- ------------
</TABLE>
<PAGE>19
<TABLE>
<CAPTION>
Schedule I
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Assets Held for Investment
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Number of
shares or
principal Total Current value
Name and title of issue amount Unit cost cost Per Unit Total
- ----------------------- ------- --------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS
U.S. Treasury note, 7.000%, due 04/15/94 $ 100,000 $ 95.602 $ 95,602 $ 101.031 $101,031
U.S. Treasury note, 4.000%, due 09/30/94 75,000 100.000 75,000 100.312 75,234
U.S. Treasury note, 7.750%, due 02/15/95 50,000 101.390 50,695 104.280 52,140
U.S. Treasury note, 8.500%, due 05/15/95 75,000 100.016 75,012 106.000 79,500
U.S. Treasury note, 8.875%, due 02/15/96 100,000 101.094 101,094 109.156 109,156
U.S. Treasury note, 7.000%, due 09/30/96 50,000 99.710 49,855 106.594 53,297
U.S. Treasury note, 8.125%, due 02/15/98 125,000 98.485 123,106 111.500 139,375
Federal National Mortgage Association,
5.300%, due 07/25/98 191,490 100.203 191,879 99.594 190,712
U.S. Treasury note, 7.000%, due 04/15/99 50,000 99.402 49,701 107.844 53,922
Federal Home Loan Mortgage Corp.,
6.000%, due 05/15/99 202,046 101.297 204,666 100.332 202,717
U.S. Treasury note, 8.000%, due 08/15/99 100,000 96.643 96,643 112.937 112,937
U.S. Treasury note, 6.375%, due 01/15/2000 150,000 99.805 149,708 105.062 157,593
U.S. Treasury note, 8.750%, due 08/15/2000 100,000 101.453 101,453 118.000 118,000
U.S. Treasury note, 8.500%, due 11/15/2000 25,000 99.868 24,967 116.844 29,211
U.S. Treasury note, 8.000%, due 05/15/2001 125,000 99.434 124,293 114.344 142,930
U.S. Treasury note, 7.500%, due 11/15/2001 100,000 101.413 101,413 111.562 111,562
U.S. Treasury note, 7.500%, due 05/15/2002 150,000 99.792 149,688 111.844 167,766
U.S. Treasury note, 6.375%, due 08/15/2002 175,000 98.829 172,951 104.250 182,437
U.S. Treasury note, 5.750%, due 08/15/2003 515,000 102.591 528,345 99.625 513,069
Federal National Mortgage Association,
5.500%, due 01/25/2013 200,000 99.063 198,125 98.813 197,625
----------- ------------
Total U.S. government and agency
obligations $ 2,664,196 $ 2,790,214
----------- ------------
</TABLE>
<PAGE>20
<TABLE>
<CAPTION>
Schedule I
(continued)
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Assets Held for Investment
December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Number of
shares or
principal Total Current value
Name and title of issue amount Unit cost cost Per Unit Total
- ----------------------- ------- --------- ----- ------- -----
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
General Tel. Co. Calif., 1st mtg.,
4.500%, due 03/01/95 $ 100,000 $ 100.125 $ 100,125 $ 100.375 $ 100,375
Chevron Capital USA Inc. note, 7.875%,
due 03/01/97 50,000 103.074 51,537 100.626 50,313
Shearson Lehman Bros., zero coupon note,
due 05/16/97 300,000 82.385 247,155 82.250 246,750
Discover Card, 6.250%, due 08/15/98 100,000 99.681 99,681 103.320 103,320
Allied Corp., zero coupon note, due
09/15/98 100,000 65.935 65,935 75.625 75,625
PepsiCo, Inc. note, 7.625%, due 11/01/98 50,000 99.758 49,879 109.500 54,750
Westinghouse Credit Corp. note, 8.875%,
due 06/14/2014 150,000 112.517 168,776 115.854 173,781
Prudential Home Mtg., 2nd mtg., 7.000%,
due 08/25/2023 300,000 100.000 300,000 99.750 299,250
----------- ------------
Total corporate bonds $ 1,083,088 $ 1,104,164
----------- ------------
LOANS TO PARTICIPANTS
7%-12%, fully secured by vested benefits,
due 1994 though 1998 $1,515,189 - $ 1,515,189 - $ 1,515,189
----------- ------------
Total investments $34,726,116 $43,922,622
=========== ===========
</TABLE>
<PAGE>21
<TABLE>
<CAPTION>
Schedule II
FIRST EMPIRE STATE CORPORATION
RETIREMENT SAVINGS PLAN AND TRUST
Schedule of Transactions in Excess of 5% of Fair Value of Plan Assets
For the Year Ended December 31, 1993
- --------------------------------------------------------------------------------------------------------------
Purchases Sales/distributions
------------------------ -------------------------------------------------
Number of Number of Gain
Description of asset transactions Cost transactions Proceeds Basis (loss)
- -------------------- ------------ ---- ------------ -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Short-term investments:
Vision Fiduciary Funds, Inc.
Money Market Fund 385 $12,777,536 209 $12,500,936 12,500,936 -
Common stock:
First Empire State Corporation 36 5,146,869 11 394,984 380,159 14,825
</TABLE>
