This artist’s rendering depicts the new branch that Mt. Washington Bank plans to open on Talbot Street in the Codman Square section of Boston’s Dorchester neighborhood.

A new branch opening is cause for celebration at any bank, but it’s less common to see a crowd of 50 city luminaries gather nine months before the anticipated ribbon-cutting to cheer it on.

But top-ranking city, nonprofit and neighborhood officials apparently considered the opening of Mt. Washington Bank’s newest and largest branch – planned for September in Dorchester’s Codman Square – important enough to gather blocks away, last Monday, at the Ashmont Grill. They had lunch with bank President and Chief Executive Officer Ed Merritt, who unveiled the architect’s plans and his own vision for the Talbot Street branch, located steps from Dorchester’s Great Hall.

“We think this branch establishes our commitment to Dorchester,” said Merritt, whose bank financed recent renovations to Ashmont Grill.

He’s presided over the South Boston-based bank since 1999, overseeing the opening of two new branches – one on Dorchester’s Gallivan Boulevard – and the launch of its charitable foundation, which donates 10 percent of bank profits to the community.

The 113-year-old mutual bank, whose assets total $485 million, now has four branches. Its newest location will cost $4 million for a 4,000-square-foot building that also will include a lighted parking area, 24-hour ATM and community room for day and evening use.

It’s part of Mt. Washington’s strategic plan to become “Boston’s community bank,” Merritt added.

Codman Square Health Center co-founder and Chief Executive Officer Bill Walczak called the bank’s decision to open west of Washington Street “gutsy.”

Rhode Island-based Citizens Bank and North Carolina-based Bank of America have branches near Codman Square, but “nobody has opened west of Washington Street. Nobody,” Walczak said.

“We need anchor tenants,” added Meg Campbell, principal of Codman Academy Charter School, a high school located on the health center’s campus, explaining why she supports the new branch.

Codman Square also doesn’t have any credit unions.

Richard Costa, Mt. Washington’s senior vice president and chief loan officer – who said he grew up around the corner from the new branch – recalled that 305 Talbot Ave. was once an auto-body shop, but had been abandoned for years.

The city took the property for nonpayment of taxes in 1994, and sold it to the bank a decade later for $100,000.

At one point, the city had started construction on a taxicab inspection station at the site, but the Codman Square/Four Corners Millenium Project succeeded in averting it, noted City Councilor Charles Yancey, also a guest at the luncheon.

Yancey thanked Boston Department of Neighborhood Development Director Charlotte Golar Richie, a former Boston state representative, for her efforts on that front.

Having a community bank in the neighborhood will be important for another reason, according to Richie, who attended the luncheon with two staff members.

“Residential foreclosures are way up in this area,” she said. In Boston, the rise has been dramatic – 25 in 2004, 60 in 2005 and 260 in 2006, according to DND.

‘A Good Day’
Mt. Washington Bank is one of six that the city named “First Choice Lenders” last May, when Mayor Thomas Menino announced the banks had partnered with the city in a major initiative to head off the rising tide of foreclosures in Boston, and prevent future ones.

Mt. Washington, Citizens, Bank of America and three other banks agreed to adhere to principles of responsible lending, including a commitment to maintaining foreclosure prevention practices that meet or exceed standards set by federal government secondary loan-purchasers Fannie Mae and Freddie Mac, which tend to purchase less-risky loans.

Costa said he knows of at least one person whose home was saved as a direct result of his bank’s participation.

Massachusetts Association of Community Development Corporations President Joe Kriesberg said that “any time a bank opens a branch in a low-income area, that’s a good day as far as we are concerned.”

Codman Square has plenty of mortgage lending companies, Kriesberg said. He and others identify out-of-state lenders, as opposed to community banks, as the ones that offer risky loans.

Codman Square Neighborhood Development Corp. Director Gail Latimore said she wishes there could have been housing on the site. At 12,000 square feet, she noted, it’s big enough to accommodate a mixed-use project.

But in general, Latimore said, she’s also feeling good about “yet another financial institution – particularly a smaller one, that we hope is more likely to meet the needs of our low- and moderate-income constituency. We know they do a lot of consumer lending, and are hoping that is going to help, so we welcome a bank like that in Codman Square.”

Walczak said having a relationship with a local bank will be a great way for neighborhood residents, who might not already have a banking relationship, to establish credit.

He told a story about Mt. Washington’s recent visit to the Codman Square Health Center. After a presentation to the health center’s staff, bank representatives signed up 42 staffers for bank accounts. “These people work and have a salary, but 42 of them didn’t have a bank account,” Walczak noted.

Jim Morgan, Mt. Washington’s senior vice president for retail lending, said the bank’s decision to enter Codman Square had been planned for years.

“When I came to Mt. Washington six years ago, we talked about our vision for the bank,” he said. “We felt there was a niche for a Boston community bank.”

Mt. Washington wants to go where there are lots of people and a “vibrant small-business community,” which, he said, describes Codman Square to a T.

Jim Jones, founder and president of strategy consulting company First Wellesley Consulting Group, said Mt. Washington’s strategies are well suited to its intentions.

“The fact that they are creating a community room in their branch is significant Â… and rare,” he said.

Jones said it’s not necessarily surprising that other banks haven’t opened in Codman Square until now, because “if there was easy money to be had, you’d see bank branches within a stone’s throw of each other.”

Mt. Washington’s challenge will be to remain profitable, Jones said, and the community room is a “significant” first step. Banks in less-wealthy areas have to make a special effort to be involved with community leaders who have a vested interest in the success of their neighborhood, he said.

The fact that there are existing small businesses is a good sign, he added, because First Wellesley’s surveys have showed those owners prefer community banks’ very personal way of doing business.

Eastern Bank transplant Oscar Moreno will manage the Codman Square branch. Until it opens, he’ll train at the Gallivan Boulevard location.

“I’m looking forward to being in Dorchester,” said the grinning, 20-something former banking officer and branch manager.