Why First Republic Shares Are Plunging Premarket Monday

First Republic Bank FRC shares were seen extending their losses on Monday.

What Happened: In pre-market trading, the stock of the troubled regional bank plunged 21.58% to $18.06, according to Benzinga Pro data. The stock shed a whopping 32.80% on Friday despite private banks, led by JPMorgan & Chase Co. JPM, extending a lifeline by providing a $30 billion rescue package.

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The bank, on its part, announced the suspension of its dividend as part of efforts to preserve liquidity.

Monday’s weakness could be attributed to Standard & Poor’s announcing a back-to-back downgrade of the bank's credit rating. On Sunday, on the heels of a cut in the bank’s credit rating from A- to B+, S&P lowered it further to BB+, further into junk territory.

The rating agency said the deposit infusion should alleviate near-term liquidity pressures, but it is unlikely to " solve the substantial business, liquidity, funding, and profitability challenges that the bank is now likely facing.