That’s essentially what I’m saying, except that I’m explaining why they bought 10 year bills in the first place instead of shorter and more liquid ones.

Forget the numbers.

The long term ones are advantageous on their books because they cost less to purchase than short term ones but still record at the full HTM value.

With stable and low demand on withdrawals, using that HTM value isn’t unreasonable since the bills are sure to mature and so the difference of cost between short and long term bills means their books look better for less. There’s predictable risk to the play, but they probably needed the extra bit of wiggle room on their balance sheet and felt it should be fine as long as interest rates stay low and deposits don’t pick up.

But of course neither of those was going to hold. And so (as you noted) their bills grossly devalued and their account holders changed borrowing and withdrawl patterns as the economy shifted. Both factors built into the risk fell through and they went from probably-marginal to downright-damned.