Blue Hills Bank, a small community institution with big ambitions, plans to sell its stock to the public in the hopes of raising nearly $240 million, a step that analysts say also opens up the Hyde Park mainstay for eventual purchase by a larger bank.
Blue Hills announced its plans in documents filed with the Securities and Exchange Commission on Tuesday. The initial public offering also needs the approval of state banking regulators and the Federal Reserve.
The IPO is the latest move by the 143-year-old bank to expand its business and raise its profile. It dropped its old neighborhood name, Hyde Park Savings Bank, in 2011. Last summer, it acquired three Nantucket branches from Santander Bank, reaching beyond its six-office footprint in the Boston area.
It has nearly quadrupled its loan portfolio in the past three years, primarily by lending to commercial real estate projects and businesses.
In December, it made an even bigger splash, winning the naming rights to the concert pavilion on the Boston waterfront formerly known as the Bank of America Pavilion. Blue Hills will pay close to the $300,000 annually that Bank of America paid as part of its deal, which lasts just under 10 years.
In February, former Boston mayor Thomas M. Menino joined the bank’s board of directors. Menino could not be reached for comment Wednesday.
Blue Hills expects to offer its shares for $10 apiece, according to the filings. It plans to invest $119 million of the proceeds of the stock sale in the bank, spend $19.8 million to create an employee stock-ownership plan, contribute $963,000 to the bank’s charitable foundation, and use $18.7 million to redeem preferred stock. It would retain the remaining $79.5 million, according to the filings.
Blue Hills expects to offer its shares for $10 apiece. It plans to invest $119 million of the proceeds of the stock sale in the bank.
The bank said the money it retains could be used to invest in securities, pay dividends to stockholders, repurchase shares of common stock, and build its capital base for acquisitions.
In the documents, Blue Hills also said it plans to expand into Milton and Westwood in the next two years. William Parent, the bank’s chief executive, did not return calls seeking comment on Wednesday.
If regulators approve the conversion of Blue Hills from a mutual bank to a publicly held company, the bank could be sold after three years.
Sales after conversions are common and can lead to big payouts for stakeholders, including the bank’s top executives and directors.
Parent could purchase 60,000 shares of the company in the IPO, according to the filings.
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