Boston was home to several regional banks in the 1990s, including Shawmut Bank, Bank of Boston and Fleet. Eventually, Fleet would acquire Shawmut and Bank of Boston, only to then be acquired by Bank of America in 2004. 

Since that time, the banking market in Boston and Massachusetts has been categorized by a handful of large banks and many small community banks. 

But after nearly a decade, regional banks, or what some might call “super community banks,” are starting to make a comeback in the city. 

“We’re partying like it is 1999 again,” David O’Connell, a senior analyst with the Boston-based Aite Group’s wholesale banking team, told Banker & Tradesman. “What I see here is the Boston market reverting back to form. … It always felt uncharacteristic to have a few mega banks and then so many small banks.”   

The reversion started in 2016 when Eastern Bank became the first state-chartered bank – aside from State Street – to surpass $10 billion in assets. Berkshire Bank moved its headquarters to Boston and surpassed $10 billion last year, and recently surpassed $12 billion in assets at the end of the third quarter of this year. 

Rockland Trust became the third member of the prestigious group when it recently announced that it would be acquiring the parent company of Hyde Park-based Blue Hills Bank, giving it a firm presence in Boston and catapulting the bank past $11 billion in assets. 

In addition to Berkshire Bank, Eastern Bank and Rockland Trust, Boston Private has over $8 billion in assets, and there are a number of banks around the $5 billion threshold, including East Boston Savings Bank, which has grown at an extremely fast clip in recent years. 

The emergence of banks like Eastern, Rockland Trust and Berkshire is not exactly the same as it was in the 1990s when Bank of Boston had over $60 billion in assets and Fleet got close to $200 billion in assets before being acquired; rather, it is a new chapter. 

While banks that cross $10 billion in assets are passing an important threshold, especially when it comes to Dodd-Frank, they still may not be a true regional bank. Eastern Bank has branches in Massachusetts and New Hampshire, and Rockland Trust has a presence in Massachusetts and Rhode Island. While Berkshire Bank is in several states, it still likely does not have the same reach as a Webster Bank or People’s United. 

Bram Berkowitz

Who Will Survive the New Landscape? 

In this new banking landscape, one big question is who will survive and who will be gobbled up. 

While no one can predict the future, the simple answer right now is that no one is safe. The parent of the roughly $2.7 billion Blue Hills Bank was believed to be in good health when it was acquired, and O’Connell said more small banks could follow suit. 

“Since the global catastrophe, there has been a raft of regulation in place that requires a strong back office and crafty investment in technology,” he said, referring to things like the incoming current expected credit loss accounting system. “These things are more easily done by a $17 billion bank’s back office than a $4 billion bank’s back office.” 

Still, there are not a lot of publicly traded banks left for Berkshire Bank or Rockland Trust to acquire. The list of potential candidates includes East Boston Savings Bank, Brookline Bank, Century Bank, Enterprise Bank, HarborOne Bank, Belmont Savings Bank and Wellesley Bank. 

And the small players may not be the only banks that get purchased. 

A Berkshire Bank or Rockland Trust could be very appealing to a larger player looking to boost its presence in Boston. In recent months, JPMorgan Chase has announced it is planning to open 50 branches in Eastern Massachusetts, while M&T Bank has also said it would like to expand in the city. 

People’s United and Webster Bank are other large players that could make a deal to increase their share of deposits in the city. 

“Boston is a market made up of neighborhoods and dominated by locals,” said O’Connell. “Banking relationships are often based on other relationships. To acquire local loan officers [and grow], banks will need to acquire some other banks.”

A previous version of this article incorrectly stated that Eastern Bank only has branches in Massachusetts; the bank also has branches in New Hampshire.