(Bloomberg) -- The Federal Home Loan Bank of San Francisco, which had propped up several banks with multibillion-dollar loans before their collapses this year, will part ways with its chief executive officer.

A search committee has been formed to replace 64-year-old Teresa Bryce Bazemore when her term ends in March 2024, the bank’s board of directors said in a statement. In a federal filing made public Thursday, the San Francisco FHLB said it decided not to renew the employment agreement on July 28. Bazemore received compensation worth $2.4 million in 2022, much of it in bonuses. 

The FHLB system, almost a century old, has strayed far from its original mission of funding mortgages. It’s now under review by the Federal Housing Finance Agency, which was considering whether to make it more difficult for large lenders to receive advances from the FHLBs, Bloomberg reported in June.

The San Francisco operation has received public scrutiny following the bank turmoil earlier this year, along with questions about its accountability. Its biggest borrowers at the end of 2022 were Silicon Valley Bank and First Republic Bank, both of which failed after a rapid increase in interest rates devalued their holdings.

In announcing the search, the chair of the San Francisco FHLB board said the decision “followed extensive deliberation and discussion about the bank’s long-term goals, including the implementation and integration of strategic changes” that could come out of the review. 

“The board recognized the critical importance of a CEO who would be engaged for the next several years to lead the organization forward and implement a vision and strategy to align with the outcome of the FHFA’s review,” Simone Lagomarsino said in the statement Wednesday. 

A possible extension had been discussed with Bazemore, who had indicated that she wanted to retire in March 2025 “due to personal and other considerations,” Lagomarsino said. 

Lagomarsino credited Bazemore for her work guiding the FHLB through difficult times, including the recent bank turbulence and the recovery from the pandemic’s economic impacts. 

“I respect the decision of the board and understand the desire to bring in a CEO who can commit to leading the Bank through the next phase of its evolution and development,” Bazemore said in the statement.

The $1.6 trillion Federal Home Loan Bank system is second only to the US Federal Reserve as a lender of last resort to US banks. First Republic and SVB were the second- and third-largest bank failures in the US. 

--With assistance from Austin Weinstein.

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