By the 1990s, Bank of Boston was looking to make another large acquisition, hoping to make itself too rich to be acquired by a much larger player. However, the bank lost the bidding in 1991 for the failed Bank of New England to Fleet Bank, and its attempted merger with Shawmut Bank collapsed in early 1992. In 1994, Bank of Boston entered into discussions with Fleet about a potential merger but ultimately Fleet chose to merge with Shawmut in 1995. This merger made Fleet the largest bank in Boston and New England.
In 1995, Bank of Boston announced a merger with BayBank, another local financial institution. Although still smaller than its failed takeover targets earlier in the decade, BayBank had a strong retail banking operation, with 205 branches and over a thousand ATMs. Baybanks was founded in 1928 when a Massachusetts asset manager with controlling stakes in nine banks reorganized itself as Old Colony Trust. After successfully weathering the Great Depression, Old Colony Trust changed its name to Baystate Corporation. This reflected the widening scope of operations and services the firm provided throughout Massachusetts. In the 1950s and 1960s, Baystate engaged in an aggressive acquisitions strategy and bought more than 40 banks. In 1976 the bank's name was changed from Baystate to BayBanks, Inc. BayBanks derived 80 percent of its revenues from its retail business, with 31% of households in eastern Massachusetts, and 25% across the entire state, having at least one BayBanks account.
Following the merger, the combined Bank of Boston did regain the title as the largest bank in the city of Boston from its rival Fleet Bank although Fleet was still the larger bank overall. With the addition of BayBank's $11 billion of assets, the combined bank had total assets of over $62 billion at the end of 1996.
The combined bank, rebranded BankBoston in 1996, was a major financial institution both domestically and internationally, due in part to the Latin American holdings of Bank of Boston, where the old name was still used. Nonetheless, it would soon be subsumed by one of the many U.S. bank mergers that proliferated in the 1990s.
In August 1998 BankBoston acquired Robertson Stephens from BankAmerica Corporation for approximately $800 million. The transaction represented the second largest acquisition in company history, after the purchase of BayBank.
