Why would a bank take your money and go to the trouble of managing it if they didn’t plan on using it for something? The purpose of a bank is to lend money. They need deposits to do that.
In this case you’re sort of right in that they found have hedged a bit more by diversifying into more shorter term assets.
I think there is a little more to it. I don’t know about SVB but Deutsche Bank had a solid business doing pretty unexciting banking. Then the CEO got a big ego and pushed for larger returns which made them do more risky stuff and eventually fail. So it’s basically a big ego or just plain greed
In this case you’re sort of right in that they found have hedged a bit more by diversifying into more shorter term assets.
Hindsight and all.