First Republic Bank in San Francisco has suspended payment of quarterly cash dividends on its outstanding noncumulative perpetual preferred stock.
The $213 billion-asset bank said in a press release that it decided to pause the payments “as a measure of prudent oversight.”
Tim Coffey, an analyst at Janney Montgomery Scott, wrote in a note to clients that the move “suggests a significant level of operational distress” at First Republic.
“The reputational damage for management from this decision could be equally significant to investors,” Coffey added.
The bank has been under pressure since the failures of Silicon Valley Bank and Signature Bank in early March. It has received backing from the Federal Reserve and JPMorgan Chase, and several large banks placed uninsured deposits in the bank as a show of support.
The bank’s top executives recently announced plans to forego bonuses and other forms of compensation.