With banks up and down the East Coast scrambling to merge or acquire other institutions, speculation is mounting that Boston-based BayBanks Inc. will become the next target for a takeover.

"They have a very attractive retail franchise in a demographically attractive area," said Mary Quinn, a bank analyst with Keefe, Bruyette & Woods, Inc. "They would make a very handsome acquisition target, and they're certainly a consolidation candidate in the not-too-distant future."

Bear Stearns & Co.'s Mike Diana said he thought an acquirer for BayBanks was likely to come from outside New England. Mr. Diana named First Union Corp., which recently reached an agreement to acquire First Fidelity Bancorp., among possible buyers.

BayBanks, with $11 billion of assets and a retail branch system concentrated in Boston, has so far succeeded in remaining aloof from the growing wave of consolidation sweeping the U.S. banking industry. The bank recently embarked on some small acquisitions of its own, taking over the New Hampshire-based holding company NFS Financial Corp., and has announced plans to acquire another New Hampshire-based bank, Cornerstone Financial Corp.

In an interview Friday, Baybanks chairman William M. Crozier Jr. would not rule out a sale, but he denied his bank was looking for a buyer. He termed the current merger mania a "frenzy."

"We're not an active seeker of partners, and we don't feel you've got to do it, that it's got to happen," Mr. Crozier said.

But he also emphasized that BayBanks expects "to be part of the nation's banking system."

On Friday, BayBanks reported a 30.3% increase in net earnings for the second quarter, to $34.4 million.

Mr. Crozier credited increased loan demand for the earnings gain. "When the tide comes in in the loan area, things just start to look better. It allows you to swap in some of the securities in your portfolio, and it helps offset the higher deposit costs," he said.

He also acknowledged a 14 cents per share one-time gain from the settlement of a tax case and the sale of some bond trusteeship assets as other unusual boosts to earnings.

Analysts predict a $85 to $90 per share takeover price for BayBanks, or around $1.6 billion for the entire company. In late trading Friday, BayBanks traded at $82.25

"They're very fully priced," said Ms. Quinn. "The takeover speculation is built into the price."

Jacqueline S. Gold contributed to this article.

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