They sold the bonds at a loss because they suddenly needed to make a whole bunch of depositors whole. It was a bank run. The loss of confidence came before the loss of liquidity.
There was some tail wagging the dog. Depositors wanted to be made whole because the bank had to disclose bond sale, bond purchase, and stock sale activities as a package deal. Each activity individually might have snuck under the radar, but together that spooked the depositors.
Then the CEO says there's not a problem which you only need to say if there is a problem. That didn't help either.
