SVB Financial Group had $15 billion of outstanding loans from the Federal Home Loan Bank of San Francisco at the end of 2022—it had none a year earlier—and pledged collateral of almost three times what it borrowed to back the advances.
The loans helped shore up SVB’s liquidity and appear to have coincided with a $25 billion, or 13%, decline in deposits at SVB during the final three quarters of 2022.
SVB shares dropped 60% Thursday after the bank said it would book a $1.8 billion loss on sales of securities and seek to raise $2.25 billion of fresh capital. The news sparked a broad selloff in bank stocks. SVB’s stock continued to plunge in pre-market trading Friday as investors await word on the share sale and after reports of large venture-capital firms advising companies to pull their money from the bank.
Source: wsj.com