FDIC To Begin Returning Some Uninsured SVB Deposits As Soon As Monday: Report

The Federal Deposit Insurance Corporation (FDIC), overseeing the emergency breakup of SVB Financial Group SIVB, will sell assets and make a portion of clients' uninsured deposits available as soon as Monday.

The initial payout would be made to SVB's distressed customers, many of them are Silicon Valley entrepreneurs and their companies. More cash will follow as the bank's assets are sold, Bloomberg reported citing people who know the situation.

The initial payment range would be 30% to 50% or more of uninsured deposits. The amount for the initial payout is still being determined, and it will depend on FDIC's progress in turning the assets into cash by Sunday night, the report indicates. 

Silicon Valley Bank had more than $175 billion in deposits and $209 billion in total assets by the end of 2022. 

The FDIC only insures bank deposits of up to $250,000, and most funds held at SVB far exceed that amount. However, the FDIC has said it will make 100% of protected deposits available on Monday.

According to the report, the FDIC will issue an advance dividend to uninsured depositors soon, with future payments later.

Following the collapse of Silicon Valley Bank, hedge fund manager Bill Ackman called for immediate action from the government.

"The government has about 48 hours to fix a soon-to-be-irreversible mistake," Ackman said.

Also Read: Larry Summers Says Consequences 'Severe' If Silicon Valley Bank Crisis Isn't Properly Resolved

Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation earlier on Friday. The FDIC took control of the bank via a new entity called the Deposit Insurance National Bank of Santa Clara.

SVB struggled to raise additional capital, and concerns of cash burn and liquidity sent bank shares down significantly on Thursday and Friday before the stock was halted.

Before shares fell, several SVB Financial Group insiders sold shares of the stock.  

The most significant insider transaction drawing attention is one reported on March 1 by Chief Executive Officer Gregory Becker. 

The CEO exercised 12,451 options at $105.18 and sold the acquired stock at prices ranging from $285.79 to $288.55 on February 27.

Now Read: EXCLUSIVE: Regional Banking Expert Tim Melvin On Silicon Valley Bank's Collapse — And 5 Bank Stocks Investors Can Buy Right Now

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