The recent merger of local financial giant FleetBoston Financial, which was based at this building at 100 Federal St. in Boston, and North Carolina-based Bank of America has raised many questions.

As bankers, consumers and industry analysts start to slowly come to terms with the mega-merger of Bank of America and FleetBoston Financial, speculation over what the future holds for the Bay State banking industry is the order of the day.

As the 1990s began, New England had five large-sized banks. But starting in 1991, with Fleet’s acquisition of the Bank of New England, a wave of consolidation began. In 1995, Fleet bought Shawmut National; in 1996, Bank of Boston bought BayBanks Inc.; and in 1999, Fleet bought BankBoston. Shortly thereafter, Sovereign Bank and Citizens Bank entered the Bay State.

The latest blockbuster deal has shifted power and attention from Boston to Charlotte, N.C., Bank of America’s hometown, and many industry analysts say the deal may be a Pandora’s Box of sorts, paving the way for even more mergers and acquisitions.

“The implications for change in the [banking] market are inevitable and [this merger] is certainly going to change the banking landscape,” said Anthony Abbate, president and CEO of Interchange Bank, based in Saddle Brook, N.J., and one of largest independent commercial banks in the region. “Bank of America is an 800-pound gorilla and this enables them to change the landscape in New England. The implication to the customer is enormous, as the center of the banking universe has become North Carolina.”

Some industry insiders predict not only more community bank consolidations within Massachusetts, but also a rise of out-of-state banks entering the Boston banking market.

Stanley Ragalevksky, a bank consultant partner at the law firm of Kirkpatrick & Lockhart in Boston, said the Bank of America/FleetBoston merger will force other financial institutions in the state to reassess their business plans.

“This [merger] will set off a round of consolidations. Everyone has been wondering when the larger institutions were going to try and jump into New England, but when you look at entities like Sovereign Bank and Banknorth, that have built up nice franchises in New England, and then big players like Wachovia and Citibank and Chase have not entered the New England area, it probably may force some other regional players to reassess whether they want to be in New England or not,” said Ragalevsky.

Ragalevsky said he predicts further consolidation of the smaller banks in the region because many “cannot sustain an acceptable level of profitability” in the face of increased competition.

While the anticipation of additional mergers looms, some industry watchers say community banks will view the Bank of America/FleetBoston merger as a surmountable challenge and treat it as an opportunity.

Kevin Handly, a bank attorney and partner at Boston-based Goulston & Storrs, said community banks can compete and will prevail in retaining and attracting new customers from newly acquired Fleet Bank.

“Community banks can compete. They tend to view these mega-bank mergers as creating opportunities. Rightly or wrongly, they perceive the mega banks to be less responsive to retail customers, and [community banks] see this as an opportunity,” said Handly.

Ragalevsky said smaller banks may benefit in the future because Fleet, while concentrating on business banking, was not known for quality retail customer service.

“It will be interesting to see what happens. The last time, when Fleet and BankBoston combined, the smaller banks benefited greatly,” said Ragalevsky. “Fleet was not good on retail customer service, and Bank of America is a good competitor in the small-business banking arena, and that is going to present an issue for smaller community banks and attracting small-business customers. However, smaller banks will benefit from people not wanting to do business with a national bank.”

‘Honeymoon Period’

Abbate said community banks are in an advantageous position, and should act fast before Bank of America makes any marketing or advertising changes to their products and services. But he said that regardless of any future marketing techniques, Bank of America will continue to be focused on where the most money is generated.

“This is a honeymoon period where community banks can get a sense of what they are going to encounter. However, if Bank of America wants to come over and take over an area, they can spend a lot of money and put [community banks] up against the wall,” said Abbate. “It’s always about shareholder value, but one has to realize that without a customer you have nothing. Bank of America is a multi-line company, so what they might lose on the customer retail side they are going to pick up on the business and lending side. Bank of America has been a survivor and always will be. When you get a company that size, they have to survive because they are too big to fail.”

Regardless of their asset size or deposit growth, some industry officials are worried about whether a multi-billion dollar bank the size of Bank of America will take into consideration the needs of individual customers.

Sen. Andrea Nuciforo, D-Pittsfield, said his main focus looking forward is how Bank of America’s presence will impact consumers.

“My interest is the impact this will have on consumers and their access to credit and availability of affordable deposit accounts. It remains to be seen whether Bank of America will continue Fleet’s interest in competitive consumer banking,” said Nuciforo.

Nuciforo said he hopes retail accounts are priced in a way that they are “favorable to consumers and Bank of America continues to make credit available to consumers as Fleet has.”

But according Handly, what will be most interesting to watch are the future mergers that take place, and what impact they will have on the Massachusetts banking landscape.

Handley said the prediction of more mergers and consolidations is on target, but added that Bank of America remains an urban-oriented bank, so the steepest competition will take place in the more metropolitan areas of New England.

“The banking industry has drastically changed and this transaction will stimulate merger and acquisitions among stock banks and publicly traded banks. My prediction is from a list that is already pretty well known,” said Handly. “Banknorth has indicated they are on the acquisition trail. Webster Financial is certainly indicating they are on the acquisition trail. Citizens Bank continues to be hungry for acquisitions and Seacoast certainly has a track record of being an aggressive acquirer. I also think Eastern Bank will be anxious to expand its franchise.”

But while changes are almost certainly imminent in the banking industry as a result of Bank of America’s acquisition of Fleet, the effect of Bank of America’s presence in Massachusetts overall remains open to speculation.

“Bank of America is not based in New England, so it remains to be seen what this does for the Massachusetts banking economy,” said Ragalevsky. “The combination of Bank of America and Fleet has more employees than the population of Worcester so, with respect to the economy, you just can’t draw any conclusions at this point.”