Posted this link in another thread, but highlighting:

The trouble is that when rates started to go up, mortgage assets got hit hard. The duration of Silicon Valley’s HTM portfolio extended to 6.2 years, as at the end of 2022, and unrealised losses snowballed, from nothing in June 2021, to $16 billion by September 2022. That’s a 17% mark-to-market hit. The smaller AFS book was also impacted, but not as badly. Mark-to-market losses there amounted to 9% by the end of September.

So big was this drawdown that on a marked-to-market basis, Silicon Valley Bank was technically insolvent at the end of September. Its $15.9 billion of HTM mark-to-market losses completely subsumed the $11.8 billion of tangible common equity that supported the bank’s balance sheet.

HTM = held to maturity AFS = available for sale

They knew they were getting in over their head six months ago. Where were the regulators back then? Oh, but the CEO was also apparently on the Board of Directors at the SF Fed. Uh, he's not anymore.

https://www.netinterest.co/p/the-demise-of-silicon-valley-bank