Bank of Boston's heady climb seen likely to continue.

Bank of Boston Corp.'s red-hot shares have doubled in price this year, and investors and analysts believe the ride is not over.

The bank's campaign to reduce non-performing assets is expected to pay off by boosting earnings.

In addition, some analysts believe Massachusetts has recovered sufficiently to join in a general economic recovery, another plus for the bank.

Further Retail Thrust Likely

Bank of Boston recently filed a shelf registration with the Securities and Exchange Commission for $750 million of debt and $300 million of preferred stock. Proceeds may finance the purchase of deposits and assets from regulators, which could further the bank's strategy of concentrating on retail banking.

The bank's earlier tilt toward commercial lending nearly caused its downfall. To prosper, analysts say, the bank must emphasize consumer business. And the bank now lags behind its regional rivals in offering products to households.

Fidelity Investments said that as of Friday it holds "just under" 9.9% of the Bank of Boston's shares. The mutual fund company began buying shares late last year, when the stock price was around $12.

"I'm still positive on the stock," said Bruce Herring, who runs the Select Financial Services Fund for Fidelity.

On Short List of Capital Builders

On Friday, the bank's shares closed at $23.625, up 25 cents.

"Bank of Boston is one of my three favorite stocks," said Harlan Sonderling, a vice president at the Putnam Cos. in Boston. First Bank System in Minneapolis and First Fidelity Bancorp in Lawrenceville, N.J., round out his trio.

Mr. Sonderling looks for banks that are building capital and cutting nonperforming assets, which in turn can lower loan-loss provisions and boost earnings.

In the fourth quarter of 1991, nonperforming assets, excluding restructured loans at Bank of Boston, fell $203 million. And in the first quarter this year, they fell another $236 million, bringing the ratio of nonperforming assets to assets to 5.7% from 8.3% a year before.

Ronald Mandle, an analyst with Sanford C. Bernstein & Co., expects another $200 million drop in nonperforming loans in the second quarter, which would bring the ratio down to 4.7%.

Asset Problems Receding

"I'm impressed with the bank's pace of recovery and the asset-quality improvement," said Dennis Shea, an analyst with Morgan Stanley & Co. "They've aggresively attacked the asset-quality problem and much of that is behind them."

For example, the bank has charged off 15% of its peak $3 billion in construction loans since 1990.

The planned debt issue could also help the bank boost its overall capital ratio over 10%, putting it closer to the "well capitalized" category as it was recently defined under the Federal Deposit Insurance Corporation Improvement Act.

Consequences for Brokered Deposits

Regulations implementing that statute define a well-capitalized bank as having 10% overall capital and 5% leverage capital ratios.

Under the act, a well-capitalized bank can use brokered deposits without having to first seek permission from regulators.

First National Bank of Boston, the principal unit, had a high proportion of brokered deposits, 12.3% of deposits as of yearend. Bankers believe that regulators will apply the new definition to businesses other than just brokered deposits.

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