Bill Martin, who foresaw the collapse of Silicon Valley Bank in 2023, found his next big short in the troubled New York Community Bancorp and he’s standing by his bearish bet even after the bank raised $1 billion in new capital Wednesday. The Rocky Hill, New Jersey-based short seller from Raging Capital Ventures initiated his short against NYCB the day after its dismal earnings report on Jan. 31 drove down the stock by 38%, from $10.38 to $6.47. He opened his short position in the stock when it was trading in the range of $5.50-$6.00. The Long Island-based regional bank was then hit by more bad news and briefly traded as low as $1.70 a share on Wednesday before it said it secured $1 billion in fresh capital raise investors, including a firm led by former Treasury Secretary Steven Mnuchin. The stock ended Wednesday at $3.46. NYCB 3M mountain New York Community Bancorp Martin said he had covered part of his short bet earlier this week, when NYCB traded in the low $3 range, but added to the short after the deal announcement Wednesday afternoon, as well as Thursday morning. “I think the net result is you still end up with kind of a zombie bank. 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’m very hard pressed to see a scenario where the bank comes back in a meaningful way.” NYCB on Thursday slashed its quarterly dividend for the second time in five weeks, to a nominal 1 cent per share from 5 cents, an 80% drop. 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 entrepreneurial background and his connections on the west coast, he bet against Silicon Valley Bank before its collapse in March 2023. ‘An Albatross’ The short seller believes that the biggest ticking time bomb at NYCB is its $18 billion rent-controlled multi-family loan portfolio in New York City. Due to restrictions on raising rents, landlords have a hard time passing on the cost of capital expenditures like renovations and maintenance to higher rents. That’s an even bigger problem as wage and material inflation has surged, sending building maintenance and improvement costs soaring and raising the threat that some borrowers may default. The regional bank will also have to refinance the rent-regulated loans that carry an average coupon of just 3.85% right now, putting even more pressure on landlords. “That rent controlled portfolio I think is close to toxic. It’s an albatross,” Martin said. When crypto-focused Signature Bank was shut down last year, the Federal Deposit Insurance Corp. had a hard time finding a buyer for its $16.8 billion in real estate loans, backed primarily by New York rent-regulated buildings. Eventually, New York Community’s Flagstar Bank agreed to buy all the deposits and certain loan portfolios from Signature Bank, including 40 branch locations. Martin said even though he started his short position after NYCB said in late January that its earnings had slumped, and slashed its dividend the first time, it was still a “very attractive” short setup. He did the same with First Republic Bank last year when he shorted the lender after an initial sell-off. Mnuchin said Thursday he did “extensive diligence” on NYCB’s loan portfolio and that the “biggest problem” he found was its New York office loans, though he expected the bank to build reserves over time. Martin is skeptical that a material turnaround is in the offing. “Even if you are bullish on NYCB’s turnaround potential, $3.50 per share is an expensive entry point. I remain short,” he said in a post on X Wednesday .