SVB employees received bonuses hours before collapse: sources

The US Federal Deposit Insurance Corporation offered Silicon Valley Bank employees 45 days of work and 1.5 times salary, reports say.

An FDIC official declined to comment on the details. CNN but said it is standard practice and one of the first steps an independent government agency takes after being named a recipient.

American workers also received their annual bonuses on Friday, just hours before the FDIC took control of the bankrupt creditor, Axios reported.

SVB collapsed on Friday morning, after a staggering 48 hours in which a bank run and a capital crisis led to the second-largest financial institution failure in US history.

California regulators shut down the tech lender and placed it under the control of the FDIC.

The corporation is acting as a receiver, which typically means it will liquidate the bank’s assets to pay its customers, including depositors and creditors.

Employees other than essential and branch workers were instructed to continue working remotely, Reuters reported. The bank had more than 8,500 employees at the end of 2022.

The FDIC said the SVB’s main office and all 17 branches, located in California and Massachusetts, will reopen on Monday.

The independent government agency that insures bank deposits and oversees financial institutions said all insured depositors will have full access to their insured deposits by Monday morning. It said it would pay uninsured depositors an “early dividend next week.”

The FDIC took over mid-morning on Friday; usually waits until markets close.

“The SVB’s condition deteriorated so quickly that it couldn’t last just another five hours,” wrote Better Markets CEO Dennis M. Kelleher. “That’s because their depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was inevitable due to a classic bank run.”