Lawrence Savings Bank in North Andover, Mass., is starting a makeover by changing the name it has had for nearly 140 years.
Only one of its six branches is in Lawrence, so the $546 million-asset thrift is renaming itself RiverBank to better reflect its market area - the Merrimack River Valley north of Boston. Another goal is to change residents' and business owners' attitudes toward the thrift.
The new president and chief executive, Gerald T. Mulligan, admits the thrift had a reputation of being too conservative.
"We wanted to shed the old image of being a stodgy bank, and show that we're now a little bit more competitive, and more vibrant," said Mr. Mulligan, a former Massachusetts banking commissioner and part of a new management team hired in January.
Along with the name change, the thrift has a plan to boost profits by pumping up loan volume, attracting deposits with new checking products along with higher rates on certificates of deposits, and installing drive-up automated teller machines at most of its branches. It has already lengthened branch hours, introduced a free checking account, and eliminated some deposit fees.
"We want everyone to know that we're changing, and becoming much more customer-focused," Mr. Mulligan said.
The company's key initiatives include making more loans and increasing its net interest margins, which according to Federal Deposit Insurance Corp. data have been below average for thrifts in its asset class for the past five years.
Its margins have been low because the thrift has tended to hold on to much of its capital. Its loan-to-asset ratio was about 50% when Mr. Mulligan and his team joined, and he said that it would aim to bump the ratio to 75% by investing more of its capital into loans, particularly commercial loans and home equity lines of credit.
Lawrence Savings is also repositioning its balance sheet. It announced Thursday that it had sold about $80 million of lower-yielding securities and reinvested much of the proceeds into higher-yielding securities and paying down Federal Home Loan Bank advances with the rest. It will take a $1.6 million after-tax charge for the second quarter because of this, but says it expects the move will boost net interest income by about $1.2 million.
Still, the most visible change will be the new name. Starting Sunday the thrift will run ads in local newspapers that will feature a river flowing from the words "Lawrence Savings Bank" to "RiverBank," and a tag line, "New Products, New Rates, New Attitude."
It is not unusual for banks to rename themselves to convey a broader geographic reach or to differentiate themselves from competitors that have similar names.
John Mathes, a vice president and the director of brand strategy at BrandPartners in Rochester, N.H., said that sometimes it takes a name change to get a makeover going.
"It helps develop brand repositioning, and it can build a lot of excitement around that - frankly, among the internal audience, to get them reinvigorated," Mr. Mathes said.
But Tom Tucker, an executive vice president at IBT Enterprises LLC in Atlanta, said that for the makeover to truly work, it has to occur throughout the organization, particularly with tellers, "who are the true face of the bank."
Mr. Mulligan said it was not hard to sell the thrift's employees on all the changes to come.
"They're looking forward to having an institution that's much more competitive, so when people ask them where they work, people will also say, 'Yeah, that's a good bank.' "
