US regional banks will have a challenging start to the new week after struggling First Republic announced late on Friday that it was suspending dividend payments on preferred shares.
The company said it was "as a measure of prudent oversight" but cutting the prefs is a desperation move. It was fear of Citigroup cutting its preferred the kicked off a round of the financial crisis and an eventual government bailout.
Shares of FRC closed Thursday at $14.03 from a high of $147.68 in February. The problem with that share price is that it's still too high to fold the company into some other bank for next-to-nil but it's also too low to inspire any kind of confidence.
Large banks injected $30 billion in deposits into First Republic last month in a rescue that seemed to work, at least for awhile.
This will make for an interesting start to the new week.