The below will answer you question as is but as comments have pointed out, you may need to also take into account names that have more than one uppercase letter in either part, such as Mary-Anne McDonald, or those that simply don't conform to your convention.
declare @a table (Name nvarchar(50))
insert into @a values
('fred.bloggs')
,('john.doe')
,('alan.smith')
select Name
,upper(left(Name,1))
+ substring(Name,2,charindex('.',Name,1)-2)
+ ' '
+ upper(substring(Name,charindex('.',Name,1)+1,1))
+ right(Name,len(Name) - charindex('.',Name,1)-1)
as FormattedName
from @a