Short Sellers Lose $64 Million on One Regional Bank Stock Bucking Turmoil

(Bloomberg) -- One regional bank has dodged the money-minting short trade against the sector this year.

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Traders betting against shares of New York Community Bancorp have been saddled with roughly $64 million in paper losses this year, according to data from S3 Partners LLC. It’s by far the largest mark-to-market loss for US regional bank short sellers and the only unprofitable short position that’s greater than $5 million. In contrast, traders who have shorted regional banks are up nearly $7 billion in paper profits so far this year.

The slump for NYCB short sellers is because the stock is up nearly 10% this year, bucking the overall trend in regional banks. The KBW Regional Banking Index has shed 31% in the same period, crushed by multiple bank failures starting with the collapse of Silicon Valley Bank in March.

The Hicksville, New York-based bank has been an unlikely winner in the turmoil. The stock surged a record 32% on March 20, following the bank’s agreement to take over some of Signature Bank’s deposits and loans. NYCB said in its latest earnings release the deal should boost its net interest margin — a key measure of profitability.

Of course, NYCB hasn’t been completely immune from the regional bank contagion. The stock is on track to shed 11% this week amid the recent failure of First Republic Bank and renewed concerns over the safety of its peers.

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