Mark Kanaly was quoted in a Bank Safety & Soundness Advisor article discussing tips for survival in a post-Dodd-Frank environment. He noted that banks should consider seeking extra capital, even if they’re healthy. “Banks need to play from a position of strength,” Kanaly said. “I know it’s hard and I know it’s dilutive, but banks do need to raise capital before they think they’ll need it. This is a new world and it’s all about capital. If you get behind, if you’re being criticized by examiners about capital, it’s almost too late. Perversely, you’re better off getting capital even if you don’t need it.”
He continued: “Unfortunately, this is a black and white situation. If you’re not already an acquirer, absent a strategic transition, it’s very difficult to become one. I can only point to a handful of banks with less than a five percent capital ratio that found capital. The die is being cast early.”