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Item 8. Financial Statements and Supplementary Data

2022-02-28 compared with 2021-02-26 · 313 added, 276 removed, 1062 unchanged (36% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (PCAOB ID :

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020

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Revenue Recognition

Description of the Matter As discussed in Note 2 and Note 3 of the consolidated financial statements, the Company recorded card revenues and other fees of $593.9 million, interchange revenues of $351.8 million, and processing and settlement services revenues of $293.2 million in operating revenues for the year ended December 31, 2020.

Description of the Matter As shown in the consolidated statement of operations and discussed in Note 2 and Note 3 of the consolidated financial statements, the Company recorded card revenues and other fees of $788.8 million, interchange revenues of $380.0 million, and cash processing revenues of $245.5 million in operating revenues for the year ended December 31, 2021.

Card revenues and other fees consist of monthly maintenance fees, new card fees, ATM fees, and other card revenues, which include revenue associated with the Company’s gift card program.

The Company records estimated cash back rewards as a reduction to card revenues and other fees.

Processing and settlement services revenues include cash transfer revenues, Simply Paid disbursement revenues, and tax refund processing service revenues.

Cash processing include cash transfer revenues, Simply Paid disbursement revenues, and tax refund processing service revenues.

The Company’s revenue recognition differs between each of these discrete revenue streams.

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Restricted cash 3,321 4,859

Investment securities available-for-sale, at fair value — 10,020

Settlement assets 320,377 782,262

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Investment securities available-for-sale, at fair value 2,115,501 970,969

Loans to bank customers, net of allowance for loan losses of $ 757 and $ 1,166 as of December 31, 2020 and 2019, respectively

Loans to bank customers, net of allowance for credit losses of $ 5,555 and $ 757 as of December 31, 2021 and 2020, respectively

19,270 21,011

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Operating lease liabilities 8,209 16,396

Line of credit — 35,000

Net deferred tax liabilities — 7,192

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Retained earnings 699,370 651,890

Accumulated other comprehensive income 3,428 2,040

Accumulated other comprehensive (loss) income ( 29,807 ) 3,428

Total stockholders’ equity 1,070,673 1,009,832

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Card revenues and other fees $ 788,834 $ 593,915 $ 459,357

Processing and settlement service revenues 293,216 287,064 247,958

Cash processing revenues 245,539 293,216 287,064

Interchange revenues 380,037 351,843 330,233

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Net income $ 47,480 $ 23,131 $ 99,897

Other comprehensive income

Unrealized holding gain, net of tax 1,388 2,177 593

Other comprehensive (loss) income

Unrealized holding (loss) gain, net of tax ( 33,235 ) 1,388 2,177

Comprehensive income $ 14,245 $ 24,519 $ 102,074

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Stock-based compensation — — 29,583 — — 29,583

Net income — — — 118,703 — 118,703

Other comprehensive income — — — — 593 593

Balance at December 31, 2018 52,917 $ 53 $ 380,753 $ 529,143 $ ( 137 ) $ 909,812

Common stock issued under stock plans, net of withholdings and related tax effects 962 1 ( 14,114 ) — — ( 14,113 )

Stock-based compensation — — 29,583 — — 29,583

Repurchases of Class A common stock ( 2,072 ) ( 2 ) ( 99,998 ) — — ( 100,000 )

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Balance at December 31, 2020 54,034 $ 54 $ 354,460 $ 651,890 $ 3,428 $ 1,009,832

Common stock issued under stock plans, net of withholdings and related tax effects 834 1 ( 4,824 ) — — ( 4,823 )

Stock-based compensation — — 51,419 — — 51,419

Net income — — — 47,480 — 47,480

Other comprehensive loss — — — — ( 33,235 ) ( 33,235 )

Balance at December 31, 2021 54,868 $ 55 $ 401,055 $ 699,370 $ ( 29,807 ) $ 1,070,673

See notes to consolidated financial statements

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Provision for uncollectible overdrawn accounts from purchase transactions 19,822 7,684 6,641

Provision for loan losses 24,978 859 2,405

Stock-based compensation 51,419 53,694 29,583

Losses in equity method investments 6,290 — —

(Earnings) losses in equity method investments ( 1,579 ) 6,290 —

Realized gain on sale of available-for-sale investment securities — ( 5,073 ) —

Amortization of premium (discount) on available-for-sale investment securities 999 ( 117 ) 1,042

Change in fair value of contingent consideration — ( 1,866 ) 3,298

Amortization of deferred financing costs 169 1,334 1,594

Amortization of premium on available-for-sale investment securities 2,563 999 ( 117 )

Impairment of long-lived assets — 21,719 578

Deferred income tax (benefit) expense ( 15,003 ) 6,876 ( 234 )

Deferred income tax expense (benefit) 2,722 ( 15,003 ) 6,876

Other 144 169 ( 532 )

Changes in operating assets and liabilities:

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Proceeds from maturities of available-for-sale securities 196,958 107,723 110,971

Proceeds from sales of available-for-sale securities 198,895 4,915 78,385

Proceeds from sales and calls of available-for-sale securities 6,823 198,895 4,915

Payments for acquisition of property and equipment ( 57,432 ) ( 59,035 ) ( 78,214 )

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Investment in TailFin Labs, LLC ( 35,000 ) ( 35,000 ) —

Other ( 3,534 ) — —

Purchases of other investments ( 55,000 ) — —

Other investing activities ( 852 ) ( 3,534 ) —

Net cash used in investing activities ( 1,368,487 ) ( 785,832 ) ( 153,853 )

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Net cash provided by (used in) financing activities 1,034,893 1,007,201 ( 65,125 )

Net increase (decrease) in unrestricted cash, cash equivalents and restricted cash 430,547 ( 29,064 ) 85,123

Net (decrease) increase in unrestricted cash, cash equivalents and restricted cash ( 171,061 ) 430,547 ( 29,064 )

Unrestricted cash, cash equivalents and restricted cash, beginning of period 1,496,701 1,066,154 1,095,218

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Cash paid for income taxes $ 27,200 $ 10,618 $ 1,921

Reconciliation of unrestricted cash, cash equivalents and restricted cash at end of period:

Reconciliation of unrestricted cash, cash equivalents and restricted cash

Unrestricted cash and cash equivalents $ 1,322,319 $ 1,491,842 $ 1,063,426

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Note 1— Organization

Green Dot Corporation (“we,” “our,” or “us” refer to Green Dot Corporation and its consolidated subsidiaries) is a financial technology and registered bank holding company focused on making modern banking and money movement accessible for all.

Our goal is to deliver trusted, best-in-class money management and payment solutions to our customers and partners, seamlessly connecting people to their money.

Our proprietary technology enables faster, more efficient electronic payments and money management, powering intuitive and seamless ways for people to spend, send, control and save their money.

Through our bank, we offer a suite of financial products to consumers and businesses including debit, prepaid, checking, credit and payroll cards, as well as robust money processing services, tax refunds, cash deposits and disbursements.

Green Dot Corporation (“we,” “our,” or “us” refer to Green Dot Corporation and its consolidated subsidiaries) is a financial technology and registered bank holding company committed to giving all people the power to bank seamlessly, affordably, and with confidence.

Our technology platform enables us to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money, and making financial empowerment more accessible for all.

We offer a broad set of financial services to consumers and businesses including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements.

We were incorporated in Delaware in 1999 and became a bank holding company under the Bank Holding Company Act and a member bank of the Federal Reserve System in December 2011.

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The accounting estimates used in the preparation of the Company’s consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes.

Actual results may differ from these estimates due to the uncertainty around the magnitude, duration and effects of the COVID-19 pandemic, as well as other factors.

Actual results may differ from these estimates due to the uncertainty around the magnitude, duration and continuing effects of the COVID-19 pandemic, as well as other factors.

Unrestricted Cash and Cash Equivalents

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If we intend to sell an investment security or believe we will more-likely-than-not be required to sell a security, we record the full amount of the impairment in earnings.

Interest on fixed income securities, including amortization of premiums and accretion of discounts, is included in interest income.

GREEN DOT CORPORATION

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Note 2—Summary of Significant Accounting Policies (continued)

Interest on fixed income securities, including amortization of premiums and accretion of discounts, is included in interest income.

Obligations to Customers and Settlement Assets and Obligations

At the point of sale, our retail distributors collect customer funds for purchases of new cards and balance reloads and then remit these funds directly to the banks that issue our cards.

Our retail distributors’ remittance of these funds takes an average of two business days.

Settlement assets represent the amounts due from our retail distributors and other partners for customer funds collected at the point of sale that have not yet been received by our subsidiary bank.

Also included in this balance are payroll amounts funded in advance (up to two days early) to certain cardholders who are eligible to participate in our early direct deposit programs.

Obligations to customers represent customer funds collected from (or to be remitted by) our retail distributors for which the underlying products have not been activated.

Settlement Assets, Obligations to Customers and Settlement Obligations

Settlement assets represent the amounts due from our retail distributors and other partners for customer funds collected at the point of sale that have not yet been received by our subsidiary bank, payroll deposits funded in advance (up to two days early) to certain cardholders who are eligible to participate in our early direct deposit programs and amounts due from third-party payment processors for customer transactions.

At the point of sale, our retail distributors and other partners collect customer funds for purchases of new cards and utilization of our cash transfer services and then remit these funds directly to our subsidiary bank.

Additionally, certain of our deposit account programs can be funded from external accounts and that funding is settled with third-party payment processors.

Remittance of these funds with our retail distributors, third-party payment processors and other partners takes an average of two business days.

Obligations to customers represent customer funds collected from (or to be remitted by) our retail distributors and partners for which the underlying products have not been activated.

Once the underlying products have been activated, the customer funds are reclassified as deposits in a bank account established for the benefit of the customer.

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Overdrawn Account Balances Due from Cardholders and Reserve for Uncollectible Overdrawn Accounts

Our cardholder accounts may become overdrawn as a result of maintenance fee assessments or from purchase transactions that we honor, in excess of the funds in a cardholder’s account.

For cardholders who are not enrolled or do not meet eligibility requirements of our overdraft protection program, we generally decline authorization attempts for amounts that exceed the available balance in a cardholder’s account, however, the application of card association rules, the timing of the settlement of transactions and the assessment of the card’s monthly maintenance fee, among other things, can still result in overdrawn accounts.

These overdrawn account balances are deemed to be receivables due from cardholders, and are included as a component of accounts receivable, net, on our consolidated balance sheets.

We are exposed to losses from any unrecovered overdrawn account balances.

Reserves for overdrawn account balances from purchase transactions are included as a component of other general and administrative expenses on our consolidated statements of operations.

Overdrawn cardholder balances from maintenance fee assessments are presented net of the consideration we expect to receive under ASC 606, Revenue from Contracts with Customers, and are recorded as contra-revenue within card revenues and other fees.

Our provision for overdrawn account balances from purchase transactions is included as a component of other general and administrative expenses on our consolidated statements of operations.

We classify overdrawn accounts from purchase transactions into age groups based on the number of days that have elapsed since an account last had activity, such as a purchase, ATM transaction or fee assessment.

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Restricted cash principally relates to pre-funding obligations for cardholder accounts at third-party issuing banks.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

Loans to Bank Customers

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We recognize interest income as it is earned.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

Nonperforming Loans

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We may also measure impairment based on observable market prices, or for loans that are solely dependent on the collateral for repayment, the estimated fair value of the collateral less estimated costs to sell.

If the recorded investment in impaired loans exceeds this amount, we establish a specific allowance as a component of the allowance for loan losses or by adjusting an existing valuation allowance for the impaired loan.

If the recorded investment in impaired loans exceeds this amount, we establish a specific allowance as a component of the allowance for credit losses or by adjusting an existing valuation allowance for the impaired loan.

Allowance for Credit Losses

We establish an allowance for estimated credit losses inherent in our loan portfolio over the life of the loans, including our secured credit cards.

For each portfolio of loans, our estimate of expected losses is separately calculated on an aggregated basis for pools of loans that exhibit similar credit characteristics and risk of loss.

We analyze historical loss rates for these groups to determine a loss rate for each group of loans, and consider if adjustments are needed for current conditions, and other reasonable and supportable forecasts beyond our balance sheet date that may differ from historical results.

We also consider adjustments based on qualitative factors which in our judgment may affect the expected credit losses.

Qualitative considerations include, but are not limited to, changes in prevailing economic or market conditions, the loan grading and underwriting process, the borrower's credit rating or credit score, the estimated value of the underlying collateral for collateral dependent loans, the volume and severity of delinquent and nonaccrual loans, problem loan trends, legal and regulatory requirements, collection and lending practices, and geographic or other concentrations of credit risk.

We establish an allowance for estimated credit losses inherent in our loan portfolio over the life of the loans, including our secured credit cards and overdrawn balances associated with our overdraft protection program.

For each portfolio of loans, we analyze historical loss rates and other factors to determine a loss rate, and consider if adjustments are needed for current conditions, and other reasonable and supportable forecasts beyond our balance sheet date that may differ from historical results.

We also consider adjustments based on qualitative factors which in our judgment may affect the expected credit losses including, but not limited to, changes in prevailing economic or market conditions and the estimated value of the underlying collateral for collateral dependent loans.

We separately establish specific allowances for impaired loans based on the present value of changes in cash flows expected to be collected, or for impaired loans that are considered collateral dependent, the estimated fair value of the collateral less estimated costs to sell, if any.

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Once a development project is substantially complete and the software is ready for its intended use, we begin depreciating these costs on a straight-line basis over the internal-use software’s estimated useful life.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

The estimated useful lives of the respective classes of assets are as follows:

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Tenant improvements Shorter of the useful life or the lease term

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

We determine if an arrangement is or contains a lease at inception of the agreement.

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We measure the loss as the amount by which the carrying amount exceeds its fair value calculated using the present value of estimated net future cash flows.

We recorded total impairment charges of $ 21.7 million , $ 0.6 million and $ 0.9 million for the years ended December 31, 2020 , 2019 and 2018, respectively.

No impairment charges were recorded for the year ended December 31, 2021.

We recorded total impairment charges of $ 21.7 million and $ 0.6 million for the years ended December 31 , 2020 and 2019, respectively.

Impairment charges for the year ended December 31, 2020 were principally associated with capitalized internal-use software, and our operating lease right-of-use assets and other tenant improvements we determined to no longer be utilized as a result of our remote workforce strategy.

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We may in any given period bypass the qualitative assessment and proceed directly to a quantitative method to assess and measure impairment of the reporting unit's goodwill.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

For intangible assets subject to amortization, we recognize an impairment loss if the carrying amount of the intangible asset is not recoverable and exceeds its estimated fair value.

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The estimated useful lives of the intangible assets, which consist primarily of customer relationships and trade names, range from 3 - 15 years.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

Amounts Due to Card Issuing Banks for Overdrawn Accounts

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Revenue Recognition

Our operating revenues consist of card revenues and other fees, processing and settlement service revenues and interchange revenues.

Our operating revenues consist of card revenues and other fees, cash processing revenues and interchange revenues.

The core principle of the revenue standard is that these revenues will be recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services, as determined under a five-step process.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

A description of our principal revenue generating activities is as follows:

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We recognize monthly maintenance fees ratably over each day in the monthly bill cycle in which the fee is assessed, which represents the period our cardholders receive the benefits of our services and our performance obligation is satisfied.

To the extent a maintenance fee results in an overdrawn cardholder balance, we only reflect the net amount we expect to receive based on, among other things, the number of days that have elapsed since an account last had activity, such as a purchase or an ATM transaction.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

We charge new card fees when a consumer purchases a new card in a retail store.

The new card fee provides our cardholders a material right and accordingly, we defer and recognize new card fee revenues on a straight-line basis over our average card lifetime, which is currently less than one year for our GPR cards and gift cards.

For GPR cards, average card lifetime is determined based on recent historical data using the period from sale (or activation) of the card through the date of last positive balance.

We reassess average card lifetime for GPR cards quarterly and gift cards annually.

The average card lifetime is determined based on recent historical data using the period from sale (or activation) of the card through the date of last positive balance.

We reassess average card lifetime for prepaid cards and checking accounts quarterly and gift cards annually.

We report the unearned portion of new card fees as a component of deferred revenue in our consolidated balance sheets.

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Since our cardholder agreements are considered daily service contracts, our performance obligations for these types of transactional based fees are satisfied on a daily basis, or as each transaction occurs.

Other revenues consist primarily of revenue associated with our gift card program, transaction-based fees and fees associated with optional products or services, which we offer our cardholders at their election.

Other revenues consist primarily of revenue associated with our gift card program, transaction-based fees and fees associated with optional products or services, such as our overdraft protection program, which we offer our cardholders at their election.

Since our performance obligations are settled daily, we recognize most of these fees at the point in time the transactions occur which is when the underlying performance obligation is satisfied.

In the case of our gift card program, we record the related revenues using the redemption method.

To the extent a fee results in an overdrawn cardholder balance, we only reflect the net amount we expect to receive based on, among other things, the number of days that have elapsed since an account last had activity, such as a purchase or an ATM transaction.

We also offer cash-back rewards to cardholders on certain programs.

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We recognize these fees as our program management services are rendered each month.

Processing and Settlement Service Revenues

Our processing and settlement services consist of cash transfer revenues, Simply Paid disbursement revenues, and tax refund processing service revenues.

Cash Processing Revenues

Our cash processing revenues (which we have previously referred to as processing and settlement services revenues) consist of cash transfer revenues, Simply Paid disbursement revenues, and tax refund processing service revenues.

We generate cash transfer revenues when consumers purchase our cash transfer products (reload services) in a retail store.

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Similarly, we earn Simply Paid disbursement fees from our business partners as payment disbursements are made.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

We earn tax refund processing service revenues when a customer of a third-party tax preparation company chooses to pay their tax preparation fee through the use of our tax refund processing services.

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Accordingly, we recognize tax refund processing service revenues at the point in time we satisfy our performance obligation by remitting each taxpayer’s proceeds from his or her tax return.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

We earn interchange revenues from fees remitted by the merchant’s bank, which are based on rates established by the payment networks, such as Visa and MasterCard, when account holders make purchase transactions using our card products and services.

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Sales and Marketing Expenses

Sales and marketing expenses primarily consist of sales commissions, advertising and marketing expenses, and the costs of manufacturing and distributing card packages, placards, promotional materials to our retail distributors’ locations and personalized GPR cards to consumers who have activated their cards.

We pay our retail distributors, and brokers' commissions based on sales of our prepaid debit cards and cash transfer products in their stores.

We defer and expense commissions related to new cards sales ratably over the average card lifetime, which is currently less than one year for our retail GPR and gift cards.

We pay our retail distributors, and brokers' commissions based on sales of our cards and cash transfer products in their stores.

We defer and expense commissions related to new cards sales ratably over the average card lifetime, which is currently less than one year for our cards acquired through our Retail channel.

Absent a new card fee, we recognize the cost of the related commissions immediately.

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The cost of media advertising is recorded when the advertising first takes place.

We record the costs associated with card packages and placards as prepaid expenses, and we record the costs associated with personalized GPR cards as deferred expenses.

We recognize the prepaid cost of card packages and placards over the related sales period, and we amortize the deferred cost of personalized GPR cards, when activated, over the average card lifetime.

We record the costs associated with card packages and placards as prepaid expenses, and for our cards acquired in our Retail channel, we record the costs associated with personalizing the cards as deferred expenses.

We recognize the prepaid cost of card packages and placards over the related sales period, and we amortize the deferred cost of personalizing the cards, when activated, over the average card lifetime.

Included in sales and marketing expenses are advertising and marketing expenses of $ 42.6 million, $ 37.5 million and $ 51.1 million and shipping and handling costs of $ 1.4 million, $ 1.5 million and $ 1.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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Vesting is based upon continued service to our company and we account for any forfeitures as they occur.

We have issued performance-based restricted stock units to our executive officers and employees that are subject to performance conditions, market conditions, or a combination thereof.

For awards subject to performance conditions, we determine the grant-date fair value of the stock and recognize compensation cost for the restricted stock units if and when we conclude it is probable that the performance metrics will be satisfied, over the requisite service period.

We have issued performance-based restricted stock units and performance-based options to our executive officers and employees that are subject to performance conditions, market conditions, or a combination thereof.

For awards subject to performance conditions, we determine the grant-date fair value of the stock and recognize compensation cost for the awards if and when we conclude it is probable that the performance metrics will be satisfied, over the requisite service period.

The grant-date fair value of the awards are not subsequently remeasured, however, we reassess the probability of vesting at each reporting period and record a cumulative adjustment to compensation expense based on the likelihood the performance metrics will be achieved.

For awards with market conditions, we base compensation expense on the fair value estimated at the date of grant using a Monte Carlo simulation or similar

For awards subject to market conditions, we base compensation expense on the fair value estimated at the date of grant using a Monte Carlo simulation or similar lattice model.

We recognize compensation expense over the requisite service period regardless of the market condition being satisfied, provided that the requisite service has been rendered, since the estimated grant date fair value incorporates the probability of outcomes that the market condition will be achieved.

GREEN DOT CORPORATION

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Note 2—Summary of Significant Accounting Policies (continued)

lattice model.

Under our retirement policy, any service-based requirement for unvested stock awards held by a retirement eligible employee is eliminated.

Accordingly, the related compensation expense is recognized immediately for qualifying awards granted to eligible employees, or in the case of ineligible employees who later become eligible under the retirement policy, over the period from the grant date to the date a qualifying retirement is achieved, if earlier than the standard vesting dates.

Performance-based restricted stock units issued to retirement eligible employees remain subject to the stock awards’ annual performance targets and the expense is adjusted accordingly based on expected achievement.

Performance-based awards issued to retirement eligible employees remain subject to the stock awards’ annual performance targets and the expense is adjusted accordingly based on expected achievement.

We measure the fair value of equity instruments issued to non-employees based on the grant-date fair value, and recognize the related expense in the same periods that the goods or services are received.

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Regulatory Matters and Capital Adequacy

As a bank holding company, we are subject to comprehensive supervision and examination by the Federal Reserve Board and must comply with applicable regulations, including minimum capital and leverage requirements.

As a bank holding company, we are subject to comprehensive supervision and examination by the Federal Reserve Board and the State of Utah Department of Financial Institutions and must comply with applicable regulations and other commitments we have agreed to, including financial commitments with respect to minimum capital and leverage requirements.

If we fail to comply with any of these requirements, we may become subject to formal or informal enforcement actions, proceedings, or investigations, which could result in regulatory orders, restrictions on our business operations or requirements to take corrective actions, which may, individually or in the aggregate, affect our results of operations and restrict our ability to grow.

If we fail to comply with the applicable capital and leverage

If we fail to comply with the applicable capital and leverage requirements, or if our subsidiary bank, Green Dot Bank, fails to comply with its applicable capital and leverage requirements, the Federal Reserve Board may limit our or Green Dot Bank's ability to pay dividends or fund stock repurchases, or if we become less than adequately capitalized, require us to raise additional

GREEN DOT CORPORATION

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Note 2—Summary of Significant Accounting Policies (continued)

requirements, or if our subsidiary bank fails to comply with its applicable capital and leverage requirements, the Federal Reserve Board may limit our or Green Dot Bank's ability to pay dividends.

In addition, as a bank holding company and a financial holding company, we are generally prohibited from engaging, directly or indirectly, in any activities other than those permissible for bank holding companies and financial holding companies.

This restriction might limit our ability to pursue future business opportunities which we might otherwise consider but which might fall outside the scope of permissible activities.

We may also be required to serve as a “source of strength” to Green Dot Bank if it becomes less than adequately capitalized.

As a bank holding company and a financial holding company (“FHC”), we are generally prohibited from engaging, directly or indirectly, in any activities other than those permissible for bank holding companies and FHCs.

In addition, if at any time we or Green Dot Bank fail to be “well capitalized” or “well managed,” we may not commence, or acquire any shares of a company engaged in, any activities only permissible for an FHC, without prior Federal Reserve approval.

The restriction on our ability to commence, or acquire any shares of a company engaged in, any activities only permissible for an FHC, without prior Federal Reserve approval would also generally apply if Green Dot Bank received a CRA rating of less than “Satisfactory.” Currently, under the BHC Act, we may not be able to engage in new activities or acquire shares or control of other businesses.

Such restrictions might limit our ability to pursue future business opportunities which we might otherwise consider but which might fall outside the scope of permissible activities.

bank regulatory agencies from time to time take supervisory actions under certain circumstances that restrict or limit a financial institution's activities, including in connection with examinations, which take place on a continual basis.

In some instances, we are subject to significant legal restrictions on our ability to publicly disclose these actions or the full details of these actions, including those in examination reports.

In addition, as part of the regular examination process, our and Green Dot Bank's regulators may advise us or our subsidiaries to operate under various restrictions as a prudential matter.

Such restrictions may include not being able to engage in certain categories of new activities or acquire shares or control of other companies.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

We are currently evaluating the provisions of ASU 2020-06, but do not expect any material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides optional expedients and exceptions to GAAP requirements for modifications of debt instruments, leases, derivatives and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform.

The guidance permits entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements.

The amendments in ASU 2020-04 were effective upon issuance and may be elected over time through December 31, 2022, as reference rate reform activities occur.

Upon adoption, the guidance must be applied prospectively for all eligible contract modifications.

We continue to monitor the impact of ASU 2020-04 as reference rate reform continues to develop, however, do not expect any material impact on our consolidated financial statements as our revolving line of credit is based on variable rates available that we elect at the time of borrowing.

See Note 11 - Debt, to these consolidated financial statements for additional information.

Recently adopted accounting pronouncements

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2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions and improves consistent application of Topic 740.

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies various aspects related to the accounting for income taxes.

The standard removes certain exceptions to the general principles in Topic 740 and also clarifies and modifies existing guidance to improve consistent application of Topic 740.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

We adopted ASU 2019-12 on January 1, 2021, the results of which did not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") that requires financial assets measured at amortized cost be presented at the net amount expected to be collected.

Credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited by the amount that the fair value is less than amortized cost.

The amendments under ASU 2016-13 eliminated the probable incurred loss recognition model under GAAP and introduced a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments.

The estimate of expected credit losses requires entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts.

The ASU also expanded the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models, and methods for estimating expected credit losses.

We adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost.

Results for periods after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported under previously applicable accounting standards.

The adoption of ASU 2016-13

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

resulted in an adjustment of approximately $ 0.3 million, net of tax, to beginning retained earnings, the effect of which we do not consider material to our consolidated financial statements.

Most of our financial assets within the scope of ASU 2016-13 are considered highly short-term in nature and therefore, we are less susceptible to risks and uncertainty of credit losses over extended periods of time.

The adoption of ASU 2016-13 did not result in any material changes to our methods for developing our allowance for credit losses, or the information we assess in developing our current estimate of expected credit losses.

See Notes 4, 5 and 6 to these consolidated financial statements for additional information on our financial assets within scope of the new accounting standard.

In January 2017, the FASB issued ASU No.

2017-04, Intangibles - Goodwill and Other ("ASU 2017-04"):

Simplifying the Test for Goodwill Impairment, which simplified the existing two-step guidance for goodwill impairment testing by eliminating the second step resulting in a write-down to goodwill equal to the initial amount of impairment determined in step one.

We adopted the provisions of ASU 2017-04 on January 1, 2020, the effect of which did not have a material impact on our consolidated financial statements.

We adopted the provisions of ASU 2019-12 on January 1, 2021, the results of which did not have a material impact on our consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

In August 2020, the FASB issued ASU No.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

We will adopt this standard on January 1, 2022, the result of which will not have an impact on our current financial position or results of operations .

Note 3— Revenues

Disaggregation of Revenues

Our products and services are offered only to customers within the United States.

We determine our operating segments based on how our chief operating decision maker manages our operations, makes operating decisions and evaluates operating performance.

As discussed in Note 24—Segment Information , we determine our operating segments based on how our chief operating decision maker manages our operations, makes operating decisions and evaluates operating performance.

Within our segments, we believe that the nature, amount, timing and uncertainty of our revenue and cash flows and how they are affected by economic factors can be further illustrated based on the timing in which revenue for each of our products and services is recognized.

The following table disaggregates our revenues by the timing in which the revenue is recognized:

Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018

Account Services Processing and Settlement Services Account Services Processing and Settlement Services Account Services Processing and Settlement Services

Our products and services are offered only to customers within the United States.

The following tables disaggregate our revenues earned from external customers by each of our reportable segments:

Year Ended December 31, 2021

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

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$ 673,046 $ 501,629 $ 239,735 $ 1,414,410

(1) Excludes net interest income, a component of total operating revenues, as it remains outside the scope of ASC 606, Revenues

Within our Account Services segment, revenues recognized at a point in time are comprised of ATM fees, interchange, and other similar transaction-based fees.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3—Revenues (continued)

Year Ended December 31, 2020

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

Transferred point in time $ 367,348 $ 161,520 $ 282,815 $ 811,683

Transferred over time 227,876 194,221 5,194 427,291

Operating revenues (1)

$ 595,224 $ 355,741 $ 288,009 $ 1,238,974

Year Ended December 31, 2019

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

Transferred point in time $ 365,800 $ 170,100 $ 250,660 $ 786,560

Transferred over time 255,981 25,033 9,080 290,094

Operating revenues (1)

$ 621,781 $ 195,133 $ 259,740 $ 1,076,654

(1) Excludes net interest income, a component of total operating revenues, as it is outside the scope of ASC 606, Revenues.

Also excludes the effects of intersegment revenues.

Revenues recognized at a point in time are comprised of interchange fees, ATM fees, overdraft protection fees, other similar cardholder transaction-based fees, and substantially all of our cash processing revenues.

Revenues recognized over time consists of new card fees, monthly maintenance fees, revenue earned from gift cards and substantially all BaaS partner program management fees.

Substantially all of our processing and settlement services are recognized at a point in time.

Refer to Note 24 — Segment Informatio n for our revenues disaggregated by our products and services and the components to our total operating revenues on our consolidated statements of operations for additional information.

Significant Judgments and Estimates

Transaction prices related to our account cardholder services are based on stand-alone fees stated within the terms and conditions and may also include certain elements of variable consideration depending upon the product’s features, such as cash-back rewards and reserves on accounts that may become overdrawn.

We estimate such amounts using historical data and customer behavior patterns to determine these estimates which are recorded as a reduction to the corresponding fee revenue.

Additionally, while the number of transactions that a cardholder may perform is unknown, any uncertainty is resolved at the end of each daily service contract.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3—Revenues (continued)

Contract Balances

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Therefore, no additional disclosure is provided for these performance obligations.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4— Investment Securities

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Total investment securities $ 966,841 $ 6,178 $ ( 2,050 ) $ 970,969

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4—Investment Securities (continued)

As of December 31, 2020 and 2019, the gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows:

The following table provides information about our available-for-sale investment securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position.

Less than 12 months 12 months or more Total

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December 31, 2021

Corporate bonds $ 9,973 $ ( 27 ) $ — $ — $ 9,973 $ ( 27 )

Agency bond securities 52,865 ( 2,128 ) 168,730 ( 7,117 ) 221,595 ( 9,245 )

Agency mortgage-backed securities 1,661,091 ( 27,899 ) 106,510 ( 4,369 ) 1,767,601 ( 32,268 )

Municipal bonds 9,678 ( 243 ) — — 9,678 ( 243 )

Asset-backed securities 2,358 ( 4 ) — — 2,358 ( 4 )

Total investment securities $ 1,735,965 $ ( 30,301 ) $ 275,240 $ ( 11,486 ) $ 2,011,205 $ ( 41,787 )

December 31, 2020

Agency bond securities $ 189,127 $ ( 1,713 ) $ — $ — $ 189,127 $ ( 1,713 )

Agency mortgage-backed securities 162,579 ( 337 ) — — 162,579 ( 337 )

Municipal bonds — — 113 ( 2 ) 113 ( 2 )

Total investment securities $ 351,706 $ ( 2,050 ) $ — $ — $ 351,706 $ ( 2,050 )

Our investments generally consist of highly rated securities, as our investment policy restricts our investments to highly liquid, low credit risk assets.

We did no t record any significant credit-related impairment losses during the years ended December 31, 2020 or 2019 on our available-for-sale investment securities.

As of December 31, 2020, we have performed an evaluation of our allowance for credit losses and have determined that such an allowance is not material to our available-for-sale investment portfolio as the vast majority of our investment securities are issued by government-sponsored entities.

Our investments generally consist of highly rated securities, substantially all of which are directly or indirectly backed by the U.S.

federal government, as our investment policy restricts our investments to highly liquid, low credit risk assets.

As such, we did no t record any significant credit-related impairment losses during the years ended December 31, 2021 or 2020 on our available-for-sale investment securities.

As of December 31, 2021, we had performed an evaluation of our allowance for credit losses and have determined that such an allowance is not material to our available-for-sale investment portfolio as the vast majority of our investment securities are issued by government-sponsored entities.

Unrealized losses as of December 31, 2021 are the result of recent fluctuations in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

We do not intend to sell our investments and we have determined that it is more likely than not that we will not be required to sell our investments before recovery of their amortized cost bases, which may be at maturity.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4—Investment Securities (continued)

During the year ended December 31, 2020, we recorded a realized gain of approximately $ 5.1 million as a result of the sale of certain investment securities.

The gain recognized upon sale of the investments was reclassified from accumulated other comprehensive income and is recorded as a component of other income and expenses on our consolidated statements of operations.

The gain recognized upon sale of the investments was reclassified from accumulated other comprehensive income and was recorded as a component of other income and expenses on our consolidated statements of operations.

As of December 31, 2021, the contractual maturities of our available-for-sale investment securities were as follows:

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The expected payments on mortgage-backed and asset-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5— Accounts Receivable

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Net overdrawn cardholder balances from purchase transactions 2,001 1,576

Overdrawn cardholder balances from maintenance fees 3,165 2,235

Total net overdrawn account balances due from cardholders 4,741 3,164

Cardholder fees 4,054 3,165

Receivables due from card issuing banks 4,645 4,377

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Balance, end of period $ 3,394 $ 1,653 $ 3,398

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6— Loans to Bank Customers

The following table presents total outstanding loans, gross of the related allowance for loan losses, and a summary of the related payment status:

The following table presents total outstanding loans, gross of the related allowance for credit losses, and a summary of the related payment status:

30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Total Current or Less Than 30 Days Past Due Total Outstanding

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Installment — — 3 3 1,340 1,343

Consumer 2,244 — — 2,244 7,788 10,032

Secured credit card 43 98 853 994 5,342 6,336

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Percentage of outstanding 4.0 % 3.2 % 6.3 % 13.4 % 86.6 % 100.0 %

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6—Loans to Bank Customers (continued)

Beginning in 2021, we introduced an optional overdraft protection program service on certain demand deposit account programs that allows cardholders who opt-in to spend up to a pre-authorized amount in excess of their available card balance.

When overdrawn, the purchase related balances due on these deposit accounts are reclassified as consumer loans.

Fees due from our cardholders for our overdraft service are included as a component of accounts receivable.

Overdrawn balances are unsecured and considered immediately due from the cardholder.

In December 2021, we made the determination to sell a portion of our secured credit card portfolio.

As of December 31, 2021, this portion of our secured credit card portfolio has been reclassified as loans held for sale, and is included in the long-term portion of prepaid and other assets on our consolidated balance sheet.

Upon re-classification, we reversed any previous allowance for credit loss on these portfolios and recorded an estimated valuation allowance to reflect the portfolio at its estimated fair value, which resulted in a loss of approximately $ 4.4 million.

This has been recorded as a component of other income and expenses on our consolidated statement of operations.

As of December 31, 2021, the fair value of the loans held for sale amounted to approximately $ 5.1 million.

Nonperforming Loans

The following table presents the carrying value, gross of the related allowance for loan losses, of our nonperforming loans.

The following table presents the carrying value, gross of the related allowance for credit losses, of our nonperforming loans.

See Note 2—Summary of Significant Accounting Policies for further information on the criteria for classification as nonperforming.

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Total loans $ 1,163 $ 1,740

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6—Loans to Bank Customers (continued)

Credit Quality Indicators

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We evaluate our loans using non-classified or classified as the primary credit quality indicator.

Classified loans are those loans that have demonstrated credit weakness where we believe there is a heightened risk of principal loss, including all impaired loans.

Classified loans include those designated as substandard, doubtful, or loss, consistent with regulatory guidelines.

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However, our secured credit card portfolio is collateralized by cash deposits made by each cardholder in an amount equal to the user's available credit limit, which mitigates the risk of any significant credit losses we expect to incur.

The table below presents the carrying value, gross of the related allowance for loan losses, of our loans within the primary credit quality indicators related to our loan portfolio:

The table below presents the carrying value, gross of the related allowance for credit losses, of our loans within the primary credit quality indicators related to our loan portfolio:

December 31, 2021 December 31, 2020

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Installment 1,228 115 340 137

Consumer 10,032 — — —

Secured credit card 5,483 853 13,465 1,363

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Installment 115 86 137 103

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6—Loans to Bank Customers (continued)

Allowance for Loan Losses

Activity in the allowance for loan losses consisted of the following:

Allowance for Credit Losses

Activity in the allowance for credit losses on our loan portfolio consisted of the following:

Year Ended December 31,

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Balance, end of period $ 5,555 $ 757 $ 1,166

Note 7— Equity Method Investment

Activity within our allowance for credit losses has increased during the comparable prior year periods principally due to the introduction of our overdraft protection program services on certain demand deposit accounts.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7— Equity Method Investments

On January 2, 2020, we effectuated our agreement with Walmart to jointly establish a new fintech accelerator under the name TailFin Labs, LLC (“TailFin Labs”), with a mission to develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services.

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Any future economic benefits derived from products or services developed by TailFin Labs will be negotiated on a case-by-case basis between the parties.

As of December 31, 2020, our net investment in TailFin Labs amounted to approximately $ 28.8 million and is included in the long term portion of prepaid expenses and other assets on our consolidated balance sheet.

We recorded equity in losses from TailFin Labs of approximately $ 7.0 million for the year ended December 31, 2020, which is recorded as a component of other income and expense on our consolidated statement of operations.

Total equity in losses also includes income and losses from an investment held by our bank under the Community Reinvestment Act, which are not material to these consolidated financial statements.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

As of December 31, 2021 and 2020, our net investment in TailFin Labs amounted to approximately $ 61.5 million and $ 28.8 million, respectively, and is included in the long term portion of prepaid expenses and other assets on our consolidated balance sheet.

We recorded equity in losses from TailFin Labs of approximately $ 2.3 million and $ 7.0 million for the years ended December 31, 2021 and 2020, respectively, which is recorded as a component of other income and expenses on our consolidated statement of operations.

Our equity method investments also include an investment held by our bank, which amounted to $ 6.4 million and $ 2.5 million at December 31, 2021 and 2020, respectively.

We recorded equity in earnings from this investment of approximately $ 3.9 million and $ 0.7 million for the years ended December 31, 2021 and 2020, respectively.

Note 8— Property and Equipment

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Included in those amounts are depreciation expense related to internal-use software of $ 47.5 million, $ 43.9 million and $ 35.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

We recorded impairment charges to property and equipment of $ 14.7 million , $ 0.6 million and $ 0.9 million for the years ended December 31, 2020 , 2019 and 2018.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8—Property and Equipment (continued)

No impairment charges were recorded for the year ended December 31, 2021.

We recorded impairment charges to property and equipment of $ 21.7 million and $ 0.6 million for the years ended December 31 , 2020 and 2019.

Impairment charges for the year ended December 31, 2020 were primarily associated with capitalized internal-use software we determined to no longer be utilized, as well as tenant improvements and other computer equipment at our office locations that will no longer provide any future economic benefit as a result of our remote workforce strategy.

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Based on the results of the annual goodwill impairment test, we determined that each of the fair values of our reporting units exceeded their carrying values and therefore, no impairment was recorded.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9—Goodwill and Intangible Assets (continued)

Intangible Assets

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Total $ 165,153

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10— Deposits

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Savings 7,398 8,505

GPR deposits 12,955 11,892

Secured card deposits 9,673 12,955

Time deposits, denominations greater than or equal to $250 2,497 1,970

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Total deposits $ 3,286,889 $ 2,735,116

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Deposits (continued)

The scheduled contractual maturities for total time deposits are presented in the table below:

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Total time deposits $ 5,268

As of December 31, 2020, we had aggregate time deposits of $ 2.0 million in denominations that met or exceeded the Federal Deposit Insurance Corporation (FDIC) insurance limit.

As of December 31, 2021 and 2020, we had aggregate time deposits of $ 2.5 million and $ 2.0 million, respectively, in denominations that met or exceeded the Federal Deposit Insurance Corporation (FDIC) insurance limit.

Note 11— Debt

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As of December 31, 2021, we had no borrowings outstanding on the 2019 Revolving Facility and had the full amount available for use.

At our election, loans made under the credit agreement bear interest at 1) a LIBOR rate (the “LIBOR Rate") or 2) a base rate determined by reference to the highest of (a) the United States federal funds rate plus .50 %, (a) the Wells Fargo prime rate and (c) a daily rate equal to one-month LIBOR rate plus 1.0 % (the “Base Rate"), plus in either case an applicable margin.

At our election, loans made under the credit agreement bear interest at 1) a LIBOR rate (the “LIBOR Rate") or 2) a base rate determined by reference to the highest of (a) the United States federal funds rate plus .50 %, (b) the Wells Fargo prime rate and (c) a daily rate equal to one-month LIBOR rate plus 1.0 % (the “Base Rate"), plus in either case an applicable margin.

The margin is dependent upon on our total leverage ratio and varies from 1.25 % to 2.00 % for LIBOR Rate loans and .25 % to 1.00 % for Base Rate loans.

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Letter of credit fees are payable in respect of outstanding letters of credit at a rate per annum equal to the applicable margin for LIBOR Rate loans.

The 2019 Revolving Facility contains customary representations and warranties relating to us and our subsidiaries.

The facility also contains certain affirmative and negative covenants including negative covenants that limit or restrict, among other things, liens, indebtedness, investments and acquisitions, mergers and fundamental changes, asset sales, restricted payments, changes in the nature of the business, transactions with affiliates and other matters customarily restricted in such agreements.

The terms of our existing agreement also provide for a method to determine an alternative benchmark interest rate in anticipation of the discontinuation of LIBOR under reference rate reform.

This alternative benchmark rate will be selected between the parties taking into consideration recommendations from regulatory bodies or based on prevailing market conventions at the time the alternative rate is established, and may include the Secured Overnight Financing Rate.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11—Debt (continued)

The 2019 Revolving Facility contains certain affirmative and negative covenants including negative covenants that limit or restrict, among other things, liens, indebtedness, investments and acquisitions, mergers and fundamental changes, asset sales, restricted payments, changes in the nature of the business, transactions with affiliates and other matters customarily restricted in such agreements.

We must also maintain a minimum fixed charge coverage ratio and a maximum consolidated leverage ratio at the end of each fiscal quarter, as set forth in the credit agreement.

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The Revolving Facility remained available for use until the Senior Credit Facility matured in October 2019, at which point we entered into the 2019 Revolving Facility discussed above.

Cash interest expense related to our debt was $ 0.6 million, $ 0.6 million, and $ 3.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

We did no t incur any cash interest expense related to our debt during the year ended December 31, 2021.

Cash interest expense related to our debt was $ 0.6 million for each of the years ended December 31, 2020 and 2019.

Note 12— Stockholders’ Equity

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Comprehensive Income

The tax impact on unrealized gains on investment securities available-for-sale for the years ended December 31, 2020 , 2019 and 2018 was approximately $ 0.3 million, $ 0.8 million and $ 0.1 million, respectively.

The tax impact on unrealized gains and losses on investment securities available-for-sale for the years ended December 31, 2021 , 2020 and 2019 was approximately $ 11.5 million, $ 0.3 million and $ 0.8 million, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12—Stockholders’ Equity (continued)

Stock Repurchase Program

In May 2017, our Board of Directors authorized, subject to regulatory approval, expansion of our stock repurchase program by an additional $ 150 million.

We sought and received regulatory approval during the second quarter of 2019, at which point we entered into a $ 100 million accelerated share repurchase agreement.

In May 2017, our Board of Directors authorized, subject to regulatory approval, $ 150 million for our stock repurchase program.

Upon receiving regulatory approval during the second quarter of 2019, we entered into a $ 100 million accelerated share repurchase agreement.

In August 2019, we completed final settlement of shares purchased under this agreement, receiving in total approximately 2.1 million shares at an average repurchase price of $ 48.26 .

As of December 31, 2020, we have an authorized $ 50 million remaining under our current stock repurchase program for any additional repurchases.

We had no repurchase activity during the years ended December 31, 2021 and 2020.

In February 2022, our Board of Directors provided authorization to increase our stock repurchase limit to $ 100 million for any future repurchases.

Walmart Restricted Shares

On January 2, 2020, we issued Walmart, in a private placement, 975,000 restricted shares of our Class A Common Stock.

The shares vest in equal monthly increments through December 1, 2022, however, Walmart is entitled to voting rights and participate in any dividends paid from the issuance date on the unvested balance.

The shares vest in equal monthly increments through December 1, 2022, however, Walmart is entitled to voting rights and to participate in any dividends paid from the issuance date on the unvested balance.

As such, the total amount of restricted shares issued are included in our total Class A shares outstanding.

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The estimated grant-date fair value of the restricted shares is recorded as a component of stock-based compensation expense over the related period we expect to benefit under our relationship with Walmart.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13— Employee Stock-Based Compensation

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Weighted-average grant-date fair value $ 48.20 $ 31.12 $ 38.93

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13—Employee Stock-Based Compensation (continued)

Restricted stock unit activity for the year ended December 31, 2021 was as follows:

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Outstanding at December 31, 2020

1,222 $ 36.24

Restricted stock units granted 1,073 48.20

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These awards generally contain an additional service component after each performance period is concluded and the unvested balance of the shares after the performance metrics are achieved will vest over the remaining requisite service period.

Compensation expense related to these awards is recognized using the accelerated attribution method over the vesting period (generally, a total period of four years ) based on the grant date fair value of the award.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13—Employee Stock-Based Compensation (continued)

Compensation expense related to these awards is recognized using the accelerated attribution method over the vesting period based on the grant date fair value of the award.

The following table summarizes the performance-based restricted stock units granted under our 2010 Equity Incentive Plan:

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Performance restricted stock units canceled ( 65 ) 51.24

Actual adjustment for certified performance periods 112 34.04

Outstanding at December 31, 2021

1,377 $ 35.96

The total fair value of all performance-based restricted stock vested for the years ended December 31, 2021, 2020 and 2019 was $ 17.6 million, $ 12.4 million and $ 22.7 million, respectively, based on the price of our Class A common stock on the vesting date.

Stock Options

In connection with the recent hiring of certain executive officers, we granted stock options subject to market conditions during the year ended December 31, 2020.

The stock options have a seven-year term that vest subject to continued service over three years , and upon our company achieving certain stock trading prices within a five-year period.

Compensation expense related to these awards is recognized over the greater of the explicit service period or a derived implicit period based on when the performance targets are expected to be achieved.

The grant date fair value is determined through the use of a Monte Carlo simulation and is not subsequently re-measured.

The following table summarizes our market-based stock options granted:

Year Ended December 31,

(In thousands, except per share data)

Stock options granted 2,250

Weighted-average exercise price $ 31.30

Weighted-average grant-date fair value $ 14.57

Year Ended December 31,

Risk-free interest rate 0.63 %

Expected term (in years) 3.30

Expected dividends —

Expected volatility 53.8 %

GREEN DOT CORPORATION

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Note 13—Employee Stock-Based Compensation (continued)

Stock Options

Total stock option activity for the year ended December 31, 2021 was as follows:

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Outstanding at December 31, 2020

Options granted 2,250 31.30

1,634 $ 32.04

Options exercised ( 67 ) 27.85

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We have not issued any service only based stock option awards from our 2010 Equity Incentive Plan for the periods presented in these consolidated financial statements.

During the year ended December 31, 2020 we granted stock options subject to market conditions in connection with the recent hiring of certain executive officers.

The stock options had a seven-year term that vest subject to continued service over three years , and upon our company achieving certain stock trading prices within a five-year period.

The grant date fair value is determined through the use of a Monte Carlo simulation and is not subsequently re-measured.

The total intrinsic value of options exercised was $ 2.0 million, $ 10.5 million and $ 2.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.

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Employee stock-based compensation ( 2.6 ) ( 7.7 ) ( 2.2 )

Tax Cuts and Jobs Act remeasurement — — 0.2

Non-deductible executive compensation 17.2 0.1 2.2

IRC 162(m) limitation 8.0 17.2 0.1

Capital loss valuation allowance release — ( 1.1 ) —

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Effective tax rate 25.5 % 17.7 % 17.5 %

The increase in the effective tax rate for the year ended December 31, 2020 as compared to the prior year ended December 31, 2019 is primarily due to an increase of the IRC 162(m) limitation on the deductibility of certain executive compensation.

This increase was partially offset by the impact of general business credits and an increase in excess tax benefits from stock-based compensation.

Income tax expense for the year ended December 31, 2021 increased $ 11.3 million from the prior year comparable period.

The increase in income tax expense was primarily driven by the increase in our operating income.

Our effective tax rate for the year ended December 31, 2021 is higher than our statutory federal income tax rate primarily due to higher taxes from non-deductible executive compensation and expenses related to state taxes, net of federal benefits.

Our effective tax rate for the year ended December 31, 2020 was lower than our statutory federal income tax rate primarily due to tax benefits from general business credits and stock-based compensation, offset by higher taxes from non-deductible executive compensation.

We have made a policy election to account for Global Intangible Low-Taxed Income ("GILTI") in the year the GILTI tax is incurred.

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Tax credit carryforwards 11,409 10,035

Capital loss carryforwards — 341

Gross deferred tax assets 53,615 43,502

Valuation allowance — ( 341 )

Unrealized holding losses 9,730 —

Other 1,995 543

Total deferred tax assets $ 65,595 $ 53,615

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Total deferred tax liabilities 50,547 48,068

Net deferred tax assets (liabilities) $ 5,547 $ ( 8,735 )

Net deferred tax assets $ 15,048 $ 5,547

GREEN DOT CORPORATION

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We establish a valuation allowance when we consider it more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

During the second quarter ended June 30, 2020, we released our valuation allowance against our capital loss carryforwards as we recognized capital gains on the sale of certain investment securities during that period sufficient to offset our entire capital loss carryforward amount.

As of December 31, 2021, we did not have a valuation allowance on any of our deferred tax assets as we believe it is more-likely-than-not that we will realize the benefits of our deferred tax assets.

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We do not expect that this examination will have a material impact on our consolidated financial statements.

As of December 31, 2020, we have federal net operating loss carryforwards of approximately $ 19.2 million and state net operating loss carryforwards of approximately $ 68.8 million which will be available to offset future income.

As of December 31, 2021, we had federal net operating loss carryforwards of approximately $ 17.2 million and state net operating loss carryforwards of approximately $ 89.1 million which will be available to offset future income.

If not used, the federal net operating losses will expire between 2029 and 2034.

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Total 1,714 1,929 813

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16— Fair Value Measurements

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There are three levels of inputs used to measure fair value.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16—Fair Value Measurements (continued)

For more information regarding the fair value hierarchy and how we measure fair value, see Note 2—Summary of Significant Accounting Policies .

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December 31, 2021 (In thousands)

Investment securities:

Corporate bonds $ — $ 9,973 $ — $ 9,973

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Asset-backed securities — 7,421 — 7,421

Loans held for sale — — 5,148 5,148

Total assets $ — $ 2,115,501 $ 5,148 $ 2,120,649

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December 31, 2020

Investment securities:

Corporate bonds $ — $ 10,110 $ — $ 10,110

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Balance, end of period $ 1,347 $ 5,300 $ 9,300

Our portfolio of loans held for sale were re-classified effective as of December 31, 2021 and therefore, a reconciliation of changes in fair value for the periods presented is not considered meaningful.

GREEN DOT CORPORATION

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Under the fair value hierarchy, our investment securities are classified as Level 2.

We determined the fair values of loans by discounting both principal and interest cash flows expected to be collected using a discount rate commensurate with the risk that we believe a market participant would consider in determining fair value.

Under the fair value hierarchy, our loans are classified as Level 3.

We determined the fair values of loans held for investment by discounting both principal and interest cash flows expected to be collected using a discount rate commensurate with the risk that we believe a market participant would consider in determining fair value.

Under the fair value hierarchy, our loans held for investment are classified as Level 3.

Our current portfolio of loans held for sale are recorded at the lower of the amortized cost or fair value.

The fair value was determined based on our judgement and assumptions about the price that a willing market participant would pay, and considers unique attributes about the portfolio, including loan type, servicing of the loans and related collateral.

Under the fair value hierarchy, our loans held for sale are classified as Level 3.

The fair value of demand and interest checking deposits and savings deposits is the amount payable on demand at the reporting date.

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The carrying values and fair values of certain financial instruments that were not carried at fair value, excluding short-term financial instruments for which the carrying value approximates fair value, at December 31, 2021 and 2020 are presented in the table below.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Fair Value of Financial Instruments (continued)

December 31, 2021 December 31, 2020

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Deposits $ 3,286,889 $ 3,286,837 $ 2,735,116 $ 2,735,072

Line of credit $ — $ — $ 35,000 $ 35,000

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 18— Concentrations of Credit Risk

Financial instruments that subject us to concentration of credit risk consist primarily of unrestricted cash and cash equivalents, restricted cash, investment securities, accounts receivable, loans and settlement assets.

We deposit our unrestricted cash and cash equivalents and our restricted cash with regional and national banking institutions that we periodically monitor and evaluate for creditworthiness.

We deposit a portion of our unrestricted cash and cash equivalents and our restricted cash with regional and national banking institutions that we periodically monitor and evaluate for creditworthiness.

Credit risk for our investment securities is mitigated by the types of investment securities in our portfolio, which must comply with strict investment guidelines that we believe appropriately ensures the preservation of invested capital.

Substantially all of our investment portfolio as of December 31, 2021 is directly or indirectly backed by the U.S.

federal government.

Credit risk for our accounts receivable is concentrated with card issuing banks and our customers, and this risk is mitigated by the relatively short collection period and our large customer base.

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We maintain reserves for uncollectible overdrawn accounts and uncollectible trade receivables.

With respect to our loan portfolio (excluding secured credit cards), as of December 31, 2020 approximately 92.3 % of our borrowers reside in the state of Utah and approximately 42.3 % in the city of Provo.

Consequently, this loan portfolio is susceptible to any adverse market or environmental conditions that may impact this specific geographic region.

With respect to our loan portfolio (excluding secured credit cards), we closely monitor and assess the credit quality and credit risk of our loan portfolio on an ongoing basis and maintain adequate allowances.

Credit risk associated with our secured credit card portfolio is mitigated by collateral provided by the borrower in the amount of their credit limit.

Credit risk for our settlement assets is concentrated with our retail distributors and other business partners, which we frequently monitor and is further mitigated by the short collection period.

Credit risk for our settlement assets is concentrated with our retail distributors, well-established third-party payment processors and other business partners, which we frequently monitor and is further mitigated by the short collection period.

Note 19— Defined Contribution Plan

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Our leases have remaining lease terms of less than 1 year to approximately 5 years, many of which generally include renewal options of varying terms.

As of December 31, 2020 and for the foreseeable future, we have committed to a remote workforce strategy for most U.S.

based employees.

As such, during the fourth quarter of 2020, we recorded an impairment charge of approximately $ 7.0 million related to our lease right-of-use assets as we no longer intend to utilize our leased office spaces in the U.S.

We have committed to a remote workforce strategy for most U.S.-based employees.

As such, during the fourth quarter of 2020, we recorded an impairment charge of approximately $ 7.0 million related to our lease right-of-use assets as we no longer would utilize our leased office spaces in the U.S.

for the duration of our remaining lease terms.

Our lease agreements have or will be terminated in due course in accordance with our lease provisions, however, we may be contractually obligated to continue making lease payments where no termination option is available.

Most of our lease agreements have terminated or will expire in due course in accordance with our lease provisions, however, we may be contractually obligated to continue making lease payments where no termination option is available.

Our total lease expense amounted to approximately $ 3.9 million, $ 9.2 million, and $ 11.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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Any variable payments for non-lease components and other short term lease expenses are not considered material.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 20—Leases (continued)

Supplemental Information

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Year Ended December 31,

2021 2020 2019

Cash paid for operating lease liabilities (in thousands) $ 10,101 $ 9,910 $ 8,850

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Weighted average discount rate 4.8 % 4.8 % 4.7 %

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 20—Leases (continued)

Maturities of our operating lease liabilities as of December 31, 2021 is as follows:

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On December 18, 2019, an alleged class action entitled Koffsmon v.

Green Dot Corp., et al., No.

Green Dot Corp., et al.

19-cv-10701-DDP-E, was filed in the United States District Court for the Central District of California, against us and two of our former officers.

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On February 18, 2020, a shareholder derivative suit and securities class action entitled Hellman v.

Streit, et al, No.

Streit, et al.

20-cv-01572-SVW-PVC was filed in United States District Court for the Central District of California, against us and certain of our officers and directors.

The suit avers purported breach of fiduciary duty and unjust enrichment claims, as well as claims under Sections 10(b), 14(a) and 20(a) of the Exchange Act, on the basis of the same wrongdoing alleged in the first lawsuit described above.

The suit does not define the purported class allegedly damaged.

These cases have been related.

We have not yet responded to the complaints in these matters.

Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of this matter.

We are unable at this time to determine whether the outcome of the litigation would have a material impact on our results of operations, financial condition or cash flows.

GREEN DOT CORPORATION

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Note 21—Commitments and Contingencies (continued)

the first lawsuit described above.

The suit does not define the purported class allegedly damaged.

These cases have been related.

We have not yet responded to the complaints in these matters.

In May 2021, we announced that we entered into a definitive agreement to purchase the assets and operations of Tax Refund Solutions (“TRS”), a business segment of Republic Bank & Trust Company ("Republic Bank"), subject to customary closing conditions.

Pursuant to the terms of the definitive agreement, we agreed to pay Republic Bank approximately $ 165 million in cash for the TRS assets.

On October 4, 2021, we announced we had been unable to obtain the Federal Reserve’s approval of or non-objection to the transaction, and therefore, the transaction would not be consummated.

The agreement provides for a termination fee payable by us of $ 5 million, which we recorded in the fourth quarter of 2021 and paid in January 2022.

On October 5, 2021, Republic Bank filed a claim against us in the Court of Chancery of the State of Delaware.

The lawsuit claims that we have breached the contract in which we agreed, subject to certain conditions, to purchase the TRS business.

The lawsuit seeks, among other forms of relief, an order of specific performance requiring that we close the transaction or, in the alternative, monetary damages.

We are defending the action.

Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of these matters.

Given the uncertainty of litigation and the preliminary stage of these claims, we are currently unable to estimate the probability of the outcome of these actions or the range of reasonably possible losses, if any, or the impact on our results of operations, financial condition or cash flows.

Other Legal Matters

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For additional information regarding overdrafts on cardholders’ accounts, refer to Note 5—Accounts Receivable .

Note 22— Significant Retailer and Partner Concentrations

Note 22— Significant Concentrations

A credit concentration may exist if customers are involved in similar industries, economic sectors, and geographic regions.

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The loss of a significant retail distributor could have a material adverse effect upon our card sales, profitability, and revenue growth.

Revenue Concentrations

Revenues derived from our products sold at retail distributors constituting greater than 10% of our total operating revenues were as follows:

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Walmart 24 % 27 % 34 %

In addition, approximately 13 % of our total operating revenues for the year ended December 31, 2020 were generated from a single BaaS partner, without a corresponding concentration to our gross profit for the period.

Settlement Asset Concentrations

Settlement assets derived from our products sold at retail distributors constituting greater than 10% of the settlement assets outstanding on our consolidated balance sheets were as follows:

December 31, 2020 December 31, 2019

Walmart * 13 %

* Constitutes less than 10% for the period presented.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 22—Significant Concentrations (continued)

In addition, approximately 20 % and 13 % of our total operating revenues for the years ended December 31, 2021 and 2020, respectively, were generated from a single BaaS partner, but without a corresponding concentration to our gross profit for the periods.

Note 23— Regulatory Requirements

Our subsidiary bank, Green Dot Bank, is a member bank of the Federal Reserve System and our primary regulator is the Federal Reserve Board.

We and Green Dot Bank are subject to commitments that we have made to the Federal Reserve Board and the Utah Department of Financial Institutions.

In addition, we and Green Dot Bank are subject to various regulatory capital requirements administered by the federal banking agencies.

We and Green Dot Bank are subject to commitments with respect to minimum capital and leverage requirements that we have made to the Federal Reserve Board and the Utah Department of Financial Institutions.

In addition, we and Green Dot Bank are subject to various regulatory capital and leverage requirements administered by the federal banking agencies.

Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on our financial statements.

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Note 24— Segment Information

Our operations are comprised of two reportable segments:

1) Account Services and 2) Processing and Settlement Services.

We identified our reportable segments based on factors such as how we manage our operations and how our chief operating decision maker views results.

Our chief operating decision maker organizes and manages our business primarily on the basis of product and service offerings and uses operating income to assess profitability.

The Account Services segment consists of revenues and expenses derived from our deposit account programs, such as prepaid cards, debit cards, consumer and small business checking accounts, secured credit cards, payroll debit cards and gift cards.

These deposit account programs are marketed under several of our leading consumer brand names and under the brand names of our Banking as a Service, or "BaaS," partners.

The Processing and Settlement Services segment consists of revenues and expenses derived from our products and services that specialize in facilitating the movement of cash on behalf of consumers and businesses, such as consumer cash processing services, wage disbursements and tax refund processing services.

The Corporate and Other segment primarily consists of eliminations of intersegment revenues and expenses, unallocated corporate expenses, depreciation and amortization, and other costs that are not considered when management evaluates segment performance.

Effective beginning with the first quarter of 2021, we have realigned our segment reporting based on how our current Chief Operating Decision Maker (our “CODM”) manages our businesses, including resource allocation and performance assessment.

Our CODM (who is our Chief Executive Officer) organizes and manages our businesses primarily on the basis of the channels in which our product and services are offered and uses net revenue and segment profit to assess profitability.

Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, third-party call center support and transaction losses.

As a result of this realignment, our operations are now aggregated amongst three reportable segments:

1) Consumer Services, 2) Business to Business ("B2B") Services, and 3) Money Movement Services.

Our Consumer Services segment consists of revenues and expenses derived from deposit account programs, such as consumer checking accounts, prepaid cards, secured credit cards, and gift cards that we offer to consumers (i) through distribution arrangements with more than 90,000 retail locations and thousands of neighborhood Financial Service Center locations (the "Retail" channel), and (ii) directly through various marketing channels, such as online search engine optimization, online displays, direct mail campaigns, mobile advertising, and affiliate referral programs (the "Direct" channel).

Our B2B Services segment consists of revenues and expenses derived from (i) our partnerships with some of the United States' most prominent consumer and technology companies that make our banking products and services available to their consumers, partners and workforce through integration with our banking platform (the "Banking-as-a-Service", or "BaaS" channel), and (ii) a comprehensive payroll platform that we offer to corporate enterprises (the "Employer" channel) to facilitate payments for today’s workforce.

Our products and services in this segment include deposit account programs, such as consumer and small business checking accounts and prepaid cards, as well as our Simply Paid Disbursements services utilized by our partners.

Our Money Movement Services segment consists of revenues and expenses generated on a per transaction basis from our services that specialize in facilitating the movement of cash on behalf of consumers and businesses, such as money processing services and tax refund processing services.

Our money processing services, such as cash deposit and disbursements, are marketed to third-party banks, program managers, and other companies seeking cash deposit and disbursement capabilities for their customers.

Those customers, including our own cardholders, can access our cash deposit and disbursement services at any of the locations within our network of retail distributors and neighborhood Financial Service Centers.

We market our tax-related financial services through a network of tax preparation franchises, independent tax professionals and online tax preparation providers.

Revenues within Corporate and Other are comprised of net interest income earned by our bank and inter-segment eliminations.

Unallocated corporate expenses include our fixed expenses such as salaries, wages and related benefits for our employees, professional service fees, software licenses, telephone and communication costs, rent and utilities, insurance and inter-segment eliminations.

These costs are not considered when our CODM evaluates the performance of our three reportable segments since they are not directly attributable to any reporting segment.

Non-cash expenses such as stock-based compensation, depreciation and amortization of long-lived assets, impairment charges, and other non-recurring expenses that are not considered by our CODM when evaluating our overall consolidated financial results are excluded from our unallocated corporate expenses above.

We do not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.

We have restated segment information for the historical periods presented herein to conform to our current presentation.

The change in segment presentation does not affect the financial results of our consolidated statements of operations, balance sheets or statements of cash flows as previously presented.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 24—Segment Information (continued)

The following tables present certain financial information for each of our reportable segments for the periods then ended:

Year Ended December 31,

Account Services Processing and Settlement Services Corporate and Other Total

(In thousands)

Operating revenues $ 980,314 $ 298,423 $ ( 24,977 ) $ 1,253,760

Operating expenses 857,025 215,900 150,762 1,223,687

Operating income $ 123,289 $ 82,523 $ ( 175,739 ) $ 30,073

Year Ended December 31, 2019

Account Services Processing and Settlement Services Corporate and Other Total

(In thousands)

Operating revenues $ 842,967 $ 296,721 $ ( 31,093 ) $ 1,108,595

Operating expenses 696,409 202,713 86,555 985,677

Operating income $ 146,558 $ 94,008 $ ( 117,648 ) $ 122,918

2021 2020 2019

Segment Revenue (In thousands)

Consumer Services $ 694,725 $ 620,414 $ 654,133

B2B Services 458,584 304,651 146,545

Money Movement Services 239,735 288,009 257,065

Corporate and Other ( 5,169 ) ( 12,554 ) 581

Total segment revenues 1,387,875 1,200,520 1,058,324

Net revenue adjustment 45,322 53,240 50,271

Total operating revenues $ 1,433,197 $ 1,253,760 $ 1,108,595

Net revenue adjustments represent commissions and certain processing-related costs associated with our BaaS products and services, which are netted against our B2B Services revenues when evaluating segment performance.

Year Ended December 31,

Account Services Processing and Settlement Services Corporate and Other Total

(In thousands)

Operating revenues $ 843,905 $ 253,360 $ ( 31,690 ) $ 1,065,575

Operating expenses 643,714 179,037 112,409 935,160

2021 2020 2019

Segment Profit (In thousands)

Consumer Services $ 223,604 $ 212,170 $ 256,918

B2B Services 73,156 65,892 36,853

Money Movement Services 115,965 123,881 114,291

Corporate and Other ( 195,761 ) ( 196,131 ) ( 167,496 )

Total segment profit 216,964 205,812 240,566

Reconciliation to income before income taxes

Depreciation and amortization of property, equipment and internal-use software 57,024 58,005 49,489

Stock based compensation and related employer taxes 51,627 55,989 30,987

Amortization of acquired intangible assets 27,775 28,119 32,616

Impairment charges — 21,719 —

Other expense 14,064 11,907 4,556

Operating income 66,474 30,073 122,918

Interest expense, net 150 761 1,864

Other (expense) income , net ( 2,624 ) ( 1,217 ) 27

Income before income taxes $ 63,700 $ 28,095 $ 121,081

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data