Bill Martin, who predicted Silicon Valley Bank’s collapse in 2023, has found his next big short in troubled New York Community Bancorp and is maintaining his bearish bet even after the bank raised $1 billion in new capital on Wednesday. Rocky Hill, New Jersey-based short seller Raging Capital Ventures initiated his short against NYCB a day after its dismal Jan. 31 earnings report sent the stock down 38%, from $10 .38 to $6.47. He opened his short position on the stock when it was trading in the $5.50 to $6.00 range. The Long Island-based regional bank was then hit with more bad news and briefly traded at $1.70 a share on Wednesday before saying it had secured $1 billion in new capital raises from investors, including including a company led by former Treasury Secretary Steven Mnuchin. The stock closed Wednesday at $3.46. NYCB 3M mountain New York Community Bancorp Martin said he covered part of his short bet earlier this week, when NYCB was trading in the low $3 range, but added to the short after the deal was announced Wednesday afternoon , as well as Thursday morning. “I think the net result is that you’re going to end up with kind of a zombie bank anyway. I don’t think anyone wants those rent-controlled loans,” he said in an interview Wednesday, referring to real estate loans secured by New York City buildings . whose rents are regulated. “I find it very difficult to imagine a scenario in which the bank makes a significant comeback.” NYCB on Thursday cut its quarterly dividend for the second time in five weeks, from a nominal 5 cents to 1 cent per share, an 80% decline. The lender said it lost 7% of its deposits in the past month. Martin stood out as the “big short” during last year’s banking crisis. Using his business background and contacts on the West Coast, he bet against Silicon Valley Bank before its collapse in March 2023. family loan portfolio in New York City. Due to restrictions on rent increases, landlords have difficulty shifting the costs of capital expenditures such as renovations and maintenance onto higher rents. This is an even bigger problem as wage and material inflation has risen, driving up building maintenance and improvement costs and raising the threat that some borrowers could default. The regional bank will also have to refinance rent-regulated loans which currently have an average coupon of just 3.85%, putting even more pressure on owners. “I think that rent-controlled portfolio is almost toxic. It’s an albatross,” Martin said. When cryptocurrency-focused Signature Bank closed last year, the Federal Deposit Insurance Corp. struggled to find a buyer for its $16.8 billion in real estate loans, backed mostly by New York City buildings in regulated rent. Ultimately, New York community Flagstar Bank agreed to purchase all of the deposits and some loan portfolios from Signature Bank, including 40 branches. Martin said that although he initiated his short position after NYCB said in late January that its earnings had collapsed and cut its dividend for the first time, it was still a “very attractive” short position. He did the same with First Republic Bank last year, when he shorted the lender after an initial fire sale. Mnuchin said Thursday that he had done “extensive due diligence” on NYCB’s loan portfolio and that the “biggest problem” he found was New York office loans, though he expects the bank to build reserves in time. Martin is skeptical that a material breakthrough is in sight. “Even if you are optimistic about NYCB’s turnaround potential, $3.50 per share is an expensive entry point. I remain short,” he said in a post on X Wednesday.