Product details

This case analyses the effects of a change in the economic environment of a savings and loan institution on the strategic decisions it must make. More specifically, Cape Haddock S&L is confronted by a slowdown of economic growth in its trading area, a rise in interest rates, and more restrictive requirements imposed by several communities in its market which serve to limit building permits and reduce mortgage demand. This changed environment raises several strategic issues for Cape Haddock S&L with which they must deal in order to achieve the longer term objective of converting from a mutual depositor owned S&L regulated by the state to a stockholder S&L regulated by the federal government. Sale of stock to the public, pursuant to conversion to a federal savings bank would allow Cape Haddock to acquire four additional offices from another bank in order to attain its goal of focusing on corporate accounts and enhancing its competitive position.