Silicon Valley Bank Employees to Get Back Some Money

Silicon Valley Bank employees are reportedly getting back some money after a period of uncertainty.

Money that had been withheld from employees’ paychecks to buy SVB Financial Group stock but had not been used to do so by the time the bank failed on March 10, had been in an uncertain status, Bloomberg reported Tuesday (April 25).

The employees who participated in the plan didn’t know if they would get back that money — which totaled $25 million — or whether they’d get it from the bank’s previous owner or current owner, according to the report.

However, on Tuesday, the Federal Deposit Insurance Corp. (FDIC) determined that the funds should be treated as insured deposits and therefore returned to the employees, the report said, citing an unnamed FDIC spokesperson.

The FDIC did not immediately reply to PYMNTS’ request for comment.

Before the bank’s failure, Silicon Valley Bank employees had been able to participate in a plan in which they could buy SVB Financial Group stock at a discount every six months, according to the report.

Because the money was taken out of participants’ paychecks for the every-six-months stock purchase, money had been accumulating for three months, from the beginning of the year to the bank’s failure in March, the report said.

In the weeks since the failure of Silicon Valley Bank, employees hadn’t been able to access that money, and its status had been uncertain, per the report.

Following the FDIC’s decision announced Tuesday, the process of returning the funds should begin “shortly,” according to the report.

This news comes two days after it was reported that Silicon Valley Bank’s new owner — North Carolina-based First Citizens Bank — is working to control deposit outflows and keep bankers from jumping ship to join competitors, all while trying to rebuild trust in a financial institution at the center of a global banking crisis.

“We are in the early days of getting them stabilized and back in business,” First Citizens Bank President Peter Bristow told the Financial Times in an interview published Sunday (April 23).

First Citizens purchased Silicon Valley Bank last month after federal regulators took it over.