Bank of Boston makes announcement.

BOSTON--(BUSINESS WIRE)--July 18, 1996--Bank of Boston's second-quarter results demonstrate again that strong earnings and revenue-generating capacity of its core franchises. At the same time, returns were significantly enhanced, consistent with the Corporation's emphasis on generating superior returns.

Highlights of the second quarter

--Record Earnings: Core net income (excluding special items) for the quarter was $150 million, or $1.26 per common share fully diluted -- increases of 13 percent and 15 percent from the 133 million, or $1.10 per share, in Q2'95.

--Rising Returns: Based on core net income, return an average common equity (ROE) rose to 17.7 percent, up more than 40 basis points over the prior quarter and a nearly 100-basis-point improvement in the past two quarters.

--Operating Income Strength: Total core operating income grew to $312 million, up by 10 percent in the past year, despite the sale of the mortgage banking business. Revenues grew for the 13th consecutive quarter and were particularly strong in the Private Equity Investing, Latin American and Global Capital Markets businesses.

The quarter was also marked by several significant business developments:

--the closing of the acquisition of Boston Bancorp, with $1.3 billion in community deposits

--the completion of the second phase of the innovative mortgage banking venture with several partners, giving Bank of Boston a one-third interest in one of the nation's largest mortgage banks, Homeside, Inc.

--the opening of a representative office in India

--the creation of a High Yield unit in Global Capital Markets

Earlier in the month, a new identity for the combination of Bank of Boston and BayBanks -- BankBoston -- was unveiled nationally. Upon expected closing at the end of July, BankBoston will have approximately $60 billion in assets, 1500 ATMs and 450 branches in New England, and the third-largest overseas network of any U.S. bank.

CONTACT: Bank of Boston

Karen Schwartzman, 617/434-7594