Hyde Park Savings Bank, a community institution that operates in Boston and several neighboring towns, is changing its name to Blue Hills Bank, the bank plans to say today.
The switch, slated to take effect in November, is part of a series of steps the bank is making to transform itself from a sleepy 140-year-old institution with six branches to a growing bank with a broader line of offerings.
In addition to the name change, Hyde Park has revamped its management team, retooled its residential mortgage lending program, and expanded into commercial banking.
“We’re in the process of transforming into a diversified community bank,’’ said William Parent, who became Hyde Park’s chief executive in July 2010.
Parent said he hopes the bank, which has $911 million in assets and is mutually owned for the benefit of customers, rather than shareholders, eventually has the size and breadth of a bank like Eastern Bank. Eastern is the largest mutually owned bank in Massachusetts, with nearly $8 billion in assets and 95 branches in the state.
Hyde Park recently started offering commercial deposit accounts, commercial loans, and other service for small and mid-size banks, and plans to add other things soon, such as cash management services.
However, Milton banking consultant Suzanne Moot said Hyde Park could have a hard time building a major commercial banking business and expanding into new areas. The bank’s profits have fallen since Hyde Park started hiring additional executives and making other investments over the past year. It earned $2.1 million through the first six months, half what it earned in the same period in 2010.
“It’s extremely hard to overhaul a bank like that,’’ said Moot, a consultant with M&M Associates who follows the local banking industry. “The challenge is you have to ramp up your expenses before you know whether you’re going to be successful.’’
Moot said it was unclear how much impact the name change will have. “I’m not aware of any data that show that customers care what the name of a bank is,’’ Moot said.
The change is already upsetting one high-profile customer: Mayor Thomas M. Menino.
“Hyde Park residents made this bank,’’ said Menino, a Hyde Park resident whose grandfather was also a customer of the bank. “Are they ashamed of Hyde Park?’’
Menino said he wondered if the bank planned to move its executive offices to the suburbs and criticized the bank for its lack of lending in the community.
“I’m frustrated,’’ Menino added. “They used the Hyde Park name to build up their [business] and now they are going to abandon Hyde Park.’’
But Hyde Park’s chief marketing officer, Karen Marryat, said the bank headquarters “will always be in Hyde Park.’’
The bank also said it has made progress in stepping up its lending. For instance, the bank issued $72 million in residential mortgages in the first six months, more than it completed in all of 2010.
Even before the latest changes, Hyde Park had long been considered both well capitalized and profitable, with an unusually large amount of deposits per branch.
But Parent said the bank traditionally invested the bulk of its deposits in US Treasurys, bonds, and other Wall Street securities instead of increasing local lending because it felt the investments were safer.
As of the end of last year, it had $200 million in outstanding loans, less than one-quarter of its assets.
But bank executives said the name change is important to signal a new strategy and a broader service area.
In addition to Hyde Park, the bank has branches in Brookline, Dedham, Norwood, and West Roxbury and plans to open an additional branch a year. Parent said he hopes to eventually expand the bank through mergers with smaller institutions.
Hyde Park, which picked the name with help from a branding consultant, plans to replace all of its signs Nov. 1. The company has spent $6 million upgrading its headquarters and branches.
In addition, Parent said, the bank has been approved for more than $18 million from the Treasury Department’s new Small Business Lending Fund, giving it additional capital to lend to businesses.
That is more than any other Massachusetts bank has received from the program, which is intended to boost small-business lending.
The bank has also invested $3.2 million in a new charitable foundation and pledged to donate 5 percent of its pretax profits to nonprofit organizations.
This year, the foundation plans to award $500,000 in grants, compared with $32,000 in bank donations in 2009.
“We’re building our credibility as a community bank,’’ Parent said.Todd Wallack can be reached at firstname.lastname@example.org. Follow him on Twitter @twallack.