What changed in this filing

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Item 1. Financial Statements

2022-05-09 compared with 2021-11-08 · 230 added, 290 removed, 556 unchanged (48% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Assets (In thousands, except par value)

8 unchanged sentences

Investment securities available-for-sale, at fair value 2,168,888 2,115,501

Loans to bank customers, net of allowance for loan losses of $ 7,451 and $ 757 as of September 30, 2021 and December 31, 2020, respectively

Loans to bank customers, net of allowance for loan losses of $ 9,058 and $ 5,555 as of March 31, 2022 and December 31, 2021, respectively

24,663 19,270

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Operating lease liabilities 7,357 8,209

Net deferred tax liabilities 7,192 7,192

Total liabilities 4,044,613 3,654,804

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Class A common stock, $ 0.001 par value;

100,000 shares authorized as of September 30, 2021 and December 31, 2020;

54,671 and 54,034 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

100,000 shares authorized as of March 31, 2022 and December 31, 2021;

54,293 and 54,868 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 388,299 401,055

Retained earnings 737,994 699,370

Accumulated other comprehensive (loss) income ( 14,474 ) 3,428

Accumulated other comprehensive loss ( 142,403 ) ( 29,807 )

Total stockholders’ equity 983,944 1,070,673

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CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In thousands, except per share data)

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Total operating expenses 349,025 359,501

Operating income (loss) 8,830 ( 2,650 ) 74,618 61,589

Operating income 51,592 33,985

Interest expense, net 87 37

Other income (expense), net 849 ( 1,650 ) 1,396 696

Income (loss) before income taxes 9,641 ( 4,339 ) 75,901 61,562

Income tax expense (benefit) 2,306 ( 1,347 ) 17,898 14,415

Net income (loss) $ 7,335 $ ( 2,992 ) $ 58,003 $ 47,147

Basic earnings (loss) per common share:

Other expense, net 770 1,086

Income before income taxes 50,735 32,862

Income tax expense 12,111 7,127

Net income $ 38,624 $ 25,735

Basic earnings per common share:

$ 0.70 $ 0.47

Diluted earnings (loss) per common share:

Diluted earnings per common share:

$ 0.70 $ 0.46

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In thousands)

Net income (loss) $ 7,335 $ ( 2,992 ) $ 58,003 $ 47,147

Other comprehensive income (loss)

Unrealized holding (loss) gain, net of tax ( 4,010 ) 756 ( 17,902 ) 907

Comprehensive income (loss) $ 3,325 $ ( 2,236 ) $ 40,101 $ 48,054

Net income $ 38,624 $ 25,735

Other comprehensive (loss) income

Unrealized holding loss, net of tax ( 112,596 ) ( 22,544 )

Comprehensive (loss) income $ ( 73,972 ) $ 3,191

See notes to unaudited consolidated financial statements

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Three Months Ended September 30, 2021

Three Months Ended March 31, 2022

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

1 unchanged sentence

(In thousands)

Balance at June 30, 2021 54,640 $ 55 $ 375,551 $ 702,558 $ ( 10,464 ) $ 1,067,700

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

Common stock issued under stock plans, net of withholdings and related tax effects 206 — ( 2,615 ) — — ( 2,615 )

Stock-based compensation — — 14,858 — — 14,858

Repurchases of Class A Common Stock ( 781 ) ( 1 ) ( 24,999 ) — — ( 25,000 )

Net income — — — 38,624 — 38,624

Other comprehensive loss — — — — ( 112,596 ) ( 112,596 )

Balance at September 30, 2021 54,671 $ 55 $ 386,465 $ 709,893 $ ( 14,474 ) $ 1,081,939

Three Months Ended September 30, 2020

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Total Stockholders' Equity

Shares Amount

(In thousands)

Balance at June 30, 2020 53,297 $ 53 $ 323,083 $ 678,898 $ 2,191 $ 1,004,225

Common stock issued under stock plans, net of withholdings and related tax effects 162 — ( 4,922 ) — — ( 4,922 )

Stock-based compensation — — 11,806 — — 11,806

Net loss — — — ( 2,992 ) — ( 2,992 )

Other comprehensive income — — — — 756 756

Balance at September 30, 2020 53,459 $ 53 $ 329,967 $ 675,906 $ 2,947 $ 1,008,873

See notes to unaudited consolidated financial statements

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

Nine Months Ended September 30, 2021

Balance at March 31, 2022 54,293 $ 54 $ 388,299 $ 737,994 $ ( 142,403 ) $ 983,944

Three Months Ended March 31, 2021

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

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Other comprehensive loss — — — — ( 22,544 ) ( 22,544 )

Balance at September 30, 2021 54,671 $ 55 $ 386,465 $ 709,893 $ ( 14,474 ) $ 1,081,939

Nine Months Ended September 30, 2020

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Total Stockholders' Equity

Shares Amount

(In thousands)

Balance at December 31, 2019 51,807 $ 52 $ 296,224 $ 629,040 $ 2,040 $ 927,356

Common stock issued under stock plans, net of withholdings and related tax effects 677 — ( 3,049 ) — — ( 3,049 )

Stock-based compensation — — 36,793 — — 36,793

Walmart restricted shares 975 1 ( 1 ) — — —

Net income — — — 47,147 — 47,147

Other comprehensive income — — — — 907 907

Cumulative effect adjustment for adoption of ASU No.

2016-13 (CECL) — — — ( 281 ) — ( 281 )

Balance at September 30, 2020 53,459 $ 53 $ 329,967 $ 675,906 $ 2,947 $ 1,008,873

Balance at March 31, 2021 54,389 $ 54 $ 364,926 $ 677,625 $ ( 19,116 ) $ 1,023,489

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

7 unchanged sentences

Stock-based compensation 14,858 17,237

(Earnings) losses in equity method investments ( 1,314 ) 4,313

Realized gain on sale of available-for-sale investment securities — ( 5,062 )

Amortization of premium on available-for-sale investment securities 2,330 618

Amortization of deferred financing costs 127 127

Losses in equity method investments 1,708 875

Amortization of (discount) premium on available-for-sale investment securities ( 290 ) 659

Impairment of long-lived assets 2,263 —

Other ( 583 ) 42

Changes in operating assets and liabilities:

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

Purchase of bank-owned life insurance policies ( 55,000 ) —

Other ( 688 ) ( 916 )

Purchases of other investments ( 31,934 ) —

Other investing activities — ( 529 )

Net cash used in investing activities ( 300,614 ) ( 108,261 )

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Contingent consideration payments — ( 1,000 )

Repurchase of Class A common stock ( 25,000 ) —

Net cash provided by financing activities 185,974 1,247,579

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Cash paid for interest $ 180 $ 84

Cash paid for income taxes $ 19,394 $ 5,497

Cash refund from income taxes $ ( 11 ) $ ( 20 )

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

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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 committed to delivering trusted, best-in-class money management and payment solutions to customers and partners, seamlessly connecting people to their money.

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.

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Reference is made to our Annual Report on Form 10-K for the year ended December 31, 2021 for additional disclosures, including a summary of our significant accounting policies.

There have been no material changes to our significant accounting policies during the nine months ended September 30, 2021, other than the adoption of the accounting pronouncements discussed herein.

There have been no material changes to our significant accounting policies during the three months ended March 31, 2022, other than the adoption of the accounting pronouncements discussed herein.

In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal and recurring items, necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods presented.

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accordingly, accounting estimates require the exercise of judgment.

These financial statements were prepared using information reasonably available as of September 30, 2021 and through the date of this report.

These financial statements were prepared using information reasonably available as of March 31, 2022 and through the date of this report.

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

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Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (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 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.

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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.

We adopted the provisions of ASU 2020-06 on January 1, 2022, the results of which did not have a material impact on our consolidated financial statements.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

In March 2020, the FASB issued ASU No.

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 do not expect any material impact on our consolidated financial statements as our existing revolving line of credit is based on variable rates available that we elect at the time of borrowing.

See Note 9 — Debt, to these consolidated financial statements for additional information.

Note 3— Revenues

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The following table disaggregates our revenues earned from external customers by each of our reportable segments:

Three Months Ended September 30, 2021

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

Transferred point in time $ 102,089 $ 42,118 $ 44,636 $ 188,843

Transferred over time 60,040 86,043 960 147,043

Operating revenues (1)

$ 162,129 $ 128,161 $ 45,596 $ 335,886

Three Months Ended September 30, 2020

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

Transferred point in time $ 92,138 $ 35,995 $ 55,367 $ 183,500

Transferred over time 52,237 52,144 1,169 105,550

Operating revenues (1)

$ 144,375 $ 88,139 $ 56,536 $ 289,050

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Consumer Services B2B Services Money Movement Services Total

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$ 154,419 $ 139,977 $ 97,316 $ 391,712

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Consumer Services B2B Services Money Movement Services Total

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Also excludes the effects of intersegment revenues.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3—Revenues (continued)

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

As disclosed on our Consolidated Balance Sheets, we record deferred revenue for any upfront payments received in advance of our performance obligations being satisfied.

As presented on our consolidated balance sheets, we record deferred revenue for any upfront payments received in advance of our performance obligations being satisfied.

These contract liabilities consist principally of unearned new card fees and monthly maintenance fees.

We recognized approximately $ 26.6 million and $ 25.9 million for the nine months ended September 30, 2021 and 2020, respectively, that were included in deferred revenue at the beginning of the periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods.

We recognized approximately $ 16.5 million and $ 17.6 million for the three months ended March 31, 2022 and 2021, respectively, that were included in deferred revenue at the beginning of the periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods.

Substantially all of the deferred revenue balances at the beginning of the periods are recognized in the first half of each year.

Changes in the deferred revenue balance are driven primarily by the amount of new card fees recognized during the period, and the degree to which these reductions to the deferred revenue balance are offset by the deferral of new card fees associated with cards sold during the period.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4— Investment Securities

2 unchanged sentences

(In thousands)

September 30, 2021

March 31, 2022

Corporate bonds $ 10,000 $ — $ ( 264 ) $ 9,736

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Total investment securities $ 2,156,095 $ 1,193 $ ( 41,787 ) $ 2,115,501

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4—Investment Securities (continued)

As of September 30, 2021 and December 31, 2020, the gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows:

As of March 31, 2022 and December 31, 2021, the gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows:

Less than 12 months 12 months or more Total fair value Total unrealized loss

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(In thousands)

September 30, 2021

March 31, 2022

Corporate bonds $ 9,736 $ ( 264 ) $ — $ — $ 9,736 $ ( 264 )

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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 )

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

federal government.

Our investment policy restricts our investments to highly liquid, low credit risk assets.

As such, we have no t recorded any significant credit-related impairment losses during the three and nine months ended September 30, 2021 or 2020 on our available-for-sale investment securities.

Unrealized losses as of September 30, 2021 are the result of recent fluctuations in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

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

As such, we have no t recorded any significant credit-related impairment losses during the three months ended March 31, 2022 or 2021 on our available-for-sale investment securities.

Unrealized losses as of March 31, 2022 and 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.

As of September 30, 2021, the contractual maturities of our available-for-sale investment securities were as follows:

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4—Investment Securities (continued)

As of March 31, 2022, the contractual maturities of our available-for-sale investment securities were as follows:

Amortized cost Fair value

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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

Accounts receivable, net consisted of the following:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In thousands)

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Net overdrawn cardholder balances from purchase transactions 1,583 2,001

Overdrawn cardholder balances from maintenance fees 3,131 3,165

Total net overdrawn account balances due from cardholders 5,018 4,741

Cardholder fees 4,097 4,054

Receivables due from card issuing banks 4,408 4,645

Fee advances 3,627 21,424

Fee advances, net 3,113 20,643

Other receivables 28,716 15,219

Accounts receivable, net $ 68,600 $ 80,401

Our net overdrawn account balances due from cardholders are a result of purchase transactions that we may honor or maintenance fee assessments, in each case, in excess of the funds in the cardholder’s account.

While we decline authorization attempts for amounts that exceed the available balance in a cardholder’s account, the application of card association rules, and the timing of the settlement of transactions, among other things, can result in overdrawn accounts.

Overdrawn cardholder balances from maintenance fee assessments are presented net of the consideration we expect to receive and are recorded as contra-revenue within card revenues and other fees.

Activity in the reserve for uncollectible overdrawn accounts from purchase transactions consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In thousands)

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(In thousands)

September 30, 2021

March 31, 2022

Residential $ — $ — $ — $ — $ 4,401 $ 4,401

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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 9.2 % 0.4 % 3.5 % 13.1 % 86.9 % 100.0 %

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 a pre-determined amount in excess of their available card balance.

When overdrawn, these deposit accounts are reclassified as consumer loans.

We offer 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 was reclassified as loans held for sale, and is included in the long-term portion of prepaid and other assets on our consolidated balance sheets.

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.

Changes in valuation allowances are recorded as a component of other income and expenses on our consolidated statement of operations.

As of March 31, 2022 and December 31, 2021, the fair value of the loans held for sale amounted to approximately $ 4.5 million and $ 5.1 million, respectively.

Nonperforming Loans

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See Note 2 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2021 for further information on the criteria for classification as nonperforming.

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In thousands)

3 unchanged sentences

Total loans $ 2,324 $ 1,163

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 are generally internally categorized as substandard, doubtful or loss, consistent with regulatory guidelines.

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.

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

Secured credit card loans are considered classified if they are greater than 90 days past due.

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 credit losses, of our loans within the primary credit quality indicators related to our loan portfolio:

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6—Loans to Bank Customers (continued)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Non-Classified Classified Non-Classified Classified

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Total loans $ 31,335 $ 2,386 $ 23,616 $ 1,209

Impaired Loans and Troubled Debt Restructurings

When, for economic or legal reasons related to a borrower’s financial difficulties, we grant a concession for other than an insignificant period of time to a borrower that we would not otherwise consider, the related loan is classified as a Troubled Debt Restructuring, or TDR.

Our TDR modifications involve an extension of the maturity date at a stated interest rate lower than the current market rate for new debt with similar risk.

As of September 30, 2021, none of our TDR modifications have been made in response to the COVID-19 pandemic.

The following table presents our impaired loans and loans that we modified as TDRs as of September 30, 2021 and December 31, 2020:

September 30, 2021 December 31, 2020

Unpaid Principal Balance Carrying Value Unpaid Principal Balance Carrying Value

(In thousands)

Residential $ 208 $ 156 $ 240 $ 180

Installment 121 90 137 103

Allowance for Credit Losses

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In thousands)

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Balance, end of period $ 9,058 $ 1,531

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

Note 7— Equity Method Investment

Activity within our allowance for credit losses increased during the comparable periods principally due to the introduction of our optional overdraft protection program services on certain demand deposit accounts and other consumer advances related to our tax processing services.

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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Under the equity method of accounting, the initial investment is recorded at cost and the investment is subsequently adjusted for, among other things, its proportionate share of earnings or losses.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7—Equity Method Investment (continued)

and priorities, as defined by the agreement, differ from our underlying ownership interest.

However, given the capital structure of the TailFin Labs arrangement, we apply the Hypothetical Liquidation Book Value ("HLBV") method to determine the allocation of profits and losses since our liquidation rights and priorities, as defined by the agreement, differ from our underlying ownership interest.

The HLBV method calculates the proceeds that would be attributable to each partner in an investment based on the liquidation provisions of the agreement if the partnership was to be liquidated at book value as of the balance sheet date.

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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 September 30, 2021, our net investment in TailFin Labs amounted to approximately $ 61.5 million and is included in the long term portion of prepaid expenses and other assets on our consolidated balance sheet.

Equity in earnings and losses from TailFin Labs was an inconsequential amount for the three months ended September 30, 2021.

We recorded equity in losses from TailFin Labs of $ 1.6 million for the three months ended September 30, 2020, and $ 2.3 million and $ 4.5 million for the nine months ended September 30, 2021 and 2020, respectively, which are recorded as a component of other income and expense on our consolidated statement of operations.

Our total equity in earnings and losses also includes other investments held by our bank that are not material to these consolidated financial statements.

As of March 31, 2022 and December 31, 2021, our net investment in TailFin Labs amounted to approximately $ 94.4 million and $ 61.5 million, respectively, and is included in the long term portion of prepaid expenses and other assets on our consolidated balance sheets.

We recorded equity in losses from TailFin Labs of $ 2.1 million and $ 1.6 million for the three months ended March 31, 2022 and 2021, respectively, which are recorded as a component of other income and expense on our consolidated statement of operations.

Our equity method investments also include an investment held by our bank, which amounted to $ 6.8 million and $ 6.4 million at March 31, 2022 and December 31, 2021, respectively.

We recorded equity in earnings from this investment of approximately $ 0.4 million and $ 0.7 million for the three months ended March 31, 2022 and 2021, respectively.

Note 8— Deposits

Deposits are categorized as non-interest or interest-bearing deposits as follows:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In thousands)

3 unchanged sentences

Savings 7,531 7,398

GPR deposits 10,776 12,955

Secured card deposits 8,960 9,673

Time deposits, denominations greater than or equal to $250 2,505 2,497

2 unchanged sentences

Total deposits $ 3,605,722 $ 3,286,889

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8—Deposits (continued)

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

September 30, 2021

March 31, 2022

(In thousands)

4 unchanged sentences

Due in 2026 699

Thereafter 678

Total time deposits $ 5,243

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however, we may make voluntary repayments at any time prior to maturity.

As of September 30, 2021, we had no borrowings outstanding on the 2019 Revolving Facility and had the full amount available for use.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9—Debt (continued)

As of March 31, 2022, 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 %, (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.

2 unchanged sentences

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 terms of our existing agreement also provide for a method to determine an alternative benchmark interest rate, which will apply when the LIBOR rates cease to be available in June 2023.

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.

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.

At September 30, 2021, we were in compliance with all such covenants.

At March 31, 2022, we were in compliance with all such covenants.

If an event of default shall occur and be continuing under the facility, the commitments may be terminated and the principal amounts outstanding under the 2019 Revolving Facility, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.

We did no t incur any cash interest expense related to our debt during the three and nine months ended September 30, 2021, or during the three months ended September 30, 2020.

Cash interest expense amounted to $ 0.6 million for the nine months ended September 30, 2020.

We did no t incur any meaningful cash interest expense related to our debt during the three months ended March 31, 2022 or 2021.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10— Income Taxes

Income tax expense for the nine months ended September 30, 2021 and 2020 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

Income tax expense for the three months ended March 31, 2022 and 2021 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

The sources and tax effects of the differences are as follows:

Nine Months Ended September 30,

Three Months Ended March 31,

federal statutory tax rate 21.0 % 21.0 %

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Effective tax rate 23.9 % 21.7 %

The effective tax rate for the nine months ended September 30, 2021 and 2020 differs from the statutory federal income tax rate of 21%, primarily due to state income taxes, net of federal tax benefits, general business credits, employee stock-based compensation, and the Internal Revenue Code (IRC) 162(m) limitation on the deductibility of executive compensation.

The overall increase in the effective tax rate for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 is primarily due to an increase of $ 2.0 million on the IRC 162(m) limitation on the deductibility of executive compensation, partially offset by an increase of $ 1.5 million in excess tax benefits from stock-based compensation.

We recognized an excess tax benefit on stock-based compensation of $ 1.9 million for the nine months ended September 30, 2021, compared to a $ 0.5 million excess tax benefit for the prior year comparable period.

The effective tax rate for the three months ended March 31, 2022 and 2021 differs from the statutory federal income tax rate of 21%, primarily due to state income taxes, net of federal tax benefits, general business credits, employee stock-based compensation, and the Internal Revenue Code (IRC) 162(m) limitation on the deductibility of executive compensation.

The overall increase in the effective tax rate for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 is primarily due to an increase of $ 0.4 million in state income taxes and a $ 2.6 million decline in excess tax benefits from stock-based compensation.

We recognized a discrete tax expense related to tax shortfalls from stock based-compensation of $ 0.6 million for the three months ended March 31, 2022, compared to a $ 2.0 million excess tax benefit for the prior year comparable period.

These increases were partially offset by the impact of general business credits and a decrease of $ 1.5 million subject to the IRC 162(m) limitation on the deductibility of 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.

For the nine months ended September 30, 2021, the provision for GILTI tax expense was not material to our financial statements.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Income Taxes (continued)

For the three months ended March 31, 2022 and 2021, the provision for GILTI tax expense was not material to our financial statements.

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.

As of September 30, 2021 and 2020, we did no t 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.

During the second quarter of 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 capital loss carryforward amount.

As of March 31, 2022 and 2021, we did no t 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.

We are subject to examination by the Internal Revenue Service, or IRS, and various state tax authorities.

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The IRS initiated an examination of our 2017 U.S.

federal tax return during the second quarter ended June 30, 2020, and the examination remains ongoing as of September 30, 2021.

We do not expect the outcome of this examination will have any material impact on our consolidated financial statements.

As of September 30, 2021, 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.

federal tax return during the second quarter ended June 30, 2020, and the examination remains ongoing as of March 31, 2022.

The IRS also initiated an examination of our 2018 U.S.

federal tax return during the first quarter ended March 31, 2022.

We do not expect the outcome of these examinations will have any material impact on our consolidated financial statements.

As of March 31, 2022, we have 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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In addition, we have state business tax credits of approximately $ 20.7 million that can be carried forward indefinitely and other state business tax credits of approximately $ 1.1 million that will expire between 2023 and 2027.

As of September 30, 2021 and December 31, 2020, we had a liability of $ 11.0 million and $ 9.5 million, respectively, for unrecognized tax benefits related to various federal and state income tax matters excluding interest, penalties and related tax benefits.

As of March 31, 2022 and December 31, 2021, we had a liability of $ 12.4 million and $ 11.0 million, respectively, for unrecognized tax benefits related to various federal and state income tax matters excluding interest, penalties and related tax benefits.

The reconciliation of the beginning unrecognized tax benefits balance to the ending balance is as follows:

Nine Months Ended September 30,

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Income Taxes (continued)

Three Months Ended March 31,

(In thousands)

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The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate $ 12,060 $ 10,805

As of September 30, 2021 and 2020, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 0.7 million and $ 0.8 million, respectively.

As of March 31, 2022 and 2021, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 0.9 million and $ 0.5 million, respectively.

Note 11— Stockholders' Equity

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.

As of September 30, 2021, we have an authorized $ 50 million remaining under our current stock repurchase program for any additional repurchases.

In May 2017, our Board of Directors authorized, subject to regulatory approval, $ 150 million for our stock repurchase program under which we repurchased $ 100 million of shares in 2019.

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

Accelerated Share Repurchases

In March 2022, we entered into an accelerated share repurchase arrangement ("ASR") with a financial institution.

Pursuant to the terms of the ASR agreement and in exchange for an up-front payment of $ 25 million, we received a total of 781,555 shares of our Class A Common Stock.

Upon settlement, we either receive additional shares from the financial institution or we may be required to deliver additional shares or cash to the financial institution, at our election.

The final number of shares received upon settlement for the ASR is determined based on the volume-weighted average price of our common stock over the term of the agreement less an agreed upon discount and subject to adjustments pursuant to the terms and conditions of the ASR.

Final settlement of the ASR was completed at the end of April 2022, at which point we received an additional 132,482 shares from the financial institution.

Total shares repurchased under the ASR amounted to 914,037 shares at an average price of $ 27.35 .

The up-front payments are accounted for as a reduction to shareholders’ equity on our consolidated balance sheets in the period the payments are made.

The ASR is accounted for in two separate transactions:

1) a treasury stock repurchase for the initial shares received and 2) a forward stock purchase contract indexed to our own stock for the unsettled portion of the ASR.

The par value of the shares received are recorded as a reduction to common stock with the remainder recorded as a reduction to additional paid-in capital.

The ASR meets all of the applicable criteria for equity classification, and therefore are not accounted for as derivative instruments.

The initial repurchase of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share.

The shares are retired upon repurchase, but remain authorized for registration and issuance in the future.

In March 2022, we also entered into a repurchase plan under Rule 10b5-1 of the Exchange Act for $ 75 million that would go into effect at the conclusion of the ASR.

The agreement allows for $ 10 million of monthly share repurchases through the remainder of 2022 until the contract amount is reached.

The timing and amount of purchases depend on a variety of factors, including market conditions and the volume limit defined by Rule 10b-18.

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.

Walmart is entitled to voting rights and participate in any dividends paid from the issuance date on the unvested balance, and therefore, the total amount of restricted shares issued are included in our total Class A shares outstanding.

As of September 30, 2021, there were 406,253 unvested shares outstanding.

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.

As of March 31, 2022, there were 243,751 unvested shares outstanding.

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 the term of our relationship with Walmart.

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We have reserved shares of our Class A common stock for issuance under these plans.

The total stock-based compensation expense recognized was $ 11.5 million and $ 11.8 million for the three months ended September 30, 2021 and 2020, respectively, and $ 37.1 million and $ 36.8 million for the nine months ended September 30, 2021 and 2020, respectively.

The total stock-based compensation expense recognized was $ 14.9 million and $ 17.2 million for the three months ended March 31, 2022 and 2021, respectively.

Restricted Stock Units

Restricted stock unit activity for awards subject to only service conditions was as follows for the nine months ended September 30, 2021:

Restricted stock unit activity for awards subject to only service conditions was as follows for the three months ended March 31, 2022:

Shares Weighted-Average Grant-Date Fair Value

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Restricted stock units canceled ( 30 ) 41.67

Outstanding at September 30, 2021

Outstanding at March 31, 2022

1,939 $ 39.80

Performance-Based Restricted Stock Units

Performance-based restricted stock unit activity for the nine months ended September 30, 2021 was as follows:

Performance-based restricted stock unit activity for the three months ended March 31, 2022 was as follows:

Shares Weighted-Average Grant-Date Fair Value

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Outstanding at December 31, 2021

Performance restricted stock units granted (at target) 401 46.93

1,377 $ 35.36

Performance restricted stock units granted 114 32.75

Performance restricted stock units vested ( 53 ) 49.78

Performance restricted stock units canceled ( 1 ) 48.65

Adjustment for completed performance periods 113 34.04

Outstanding at September 30, 2021

Outstanding at March 31, 2022

1,437 $ 34.61

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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 applicable vesting periods.

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.

Stock Options

Total stock option activity for the nine months ended September 30, 2021 was as follows:

Total stock option activity for the three months ended March 31, 2022 was as follows:

Options Weighted-Average Exercise Price

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Options exercised ( 4 ) 22.06

Options canceled ( 363 ) 50.80

Outstanding at September 30, 2021

Outstanding at March 31, 2022

1,201 $ 26.63

Exercisable at September 30, 2021

Exercisable at March 31, 2022

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13— Earnings (Loss) per Common Share

The calculation of basic and diluted earnings (loss) per share (EPS) was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Note 13— Earnings per Common Share

The calculation of basic and diluted earnings per share (EPS) was as follows:

Three Months Ended March 31,

(In thousands, except per share data)

Basic earnings (loss) per Class A common share

Net income (loss) $ 7,335 $ ( 2,992 ) $ 58,003 $ 47,147

Basic earnings per Class A common share

Net income $ 38,624 $ 25,735

Amount attributable to unvested Walmart restricted shares ( 191 ) ( 283 )

Net income (loss) allocated to Class A common stockholders $ 7,277 $ ( 2,949 ) $ 57,456 $ 46,405

Net income allocated to Class A common stockholders $ 38,433 $ 25,452

Weighted-average Class A shares issued and outstanding 54,556 53,651

Basic earnings (loss) per Class A common share $ 0.13 $ ( 0.06 ) $ 1.06 $ 0.89

Diluted earnings (loss) per Class A common share

Net income (loss) allocated to Class A common stockholders $ 7,277 $ ( 2,949 ) $ 57,456 $ 46,405

Basic earnings per Class A common share $ 0.70 $ 0.47

Diluted earnings per Class A common share

Net income allocated to Class A common stockholders $ 38,433 $ 25,452

Re-allocated earnings 2 7

Diluted net income (loss) allocated to Class A common stockholders $ 7,278 $ ( 2,949 ) $ 57,468 $ 46,421

Diluted net income allocated to Class A common stockholders $ 38,435 $ 25,459

Weighted-average Class A shares issued and outstanding 54,556 53,651

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Diluted weighted-average Class A shares issued and outstanding 55,230 55,068

Diluted earnings (loss) per Class A common share $ 0.13 $ ( 0.06 ) $ 1.04 $ 0.87

Diluted earnings per Class A common share $ 0.70 $ 0.46

The restricted shares issued to Walmart contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing EPS pursuant to the two-class method.

The computation above excludes income attributable to the unvested restricted shares from the numerator and excludes the dilutive impact of those underlying shares from the denominator.

The number of weighted average shares issued and outstanding in periods of net loss are the same for basic and diluted EPS, as the effects of including potentially dilutive common shares is anti-dilutive.

For the periods presented, we excluded certain restricted stock units and stock options outstanding (as applicable), which could potentially dilute basic EPS in the future, from the computation of diluted EPS as their effect was anti-dilutive.

Additionally, we have excluded any performance-based restricted stock units where the performance contingency has not been met as of the end of the period.

The following table shows the weighted-average number of shares excluded from the diluted EPS calculation as their effects were anti-dilutive:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

For the periods presented, we excluded certain restricted stock units and stock options outstanding, which could potentially dilute basic EPS in the future, from the computation of diluted EPS as their effect was anti-dilutive.

Additionally, we have excluded any performance-based restricted stock units where the performance contingency has not been met as of the end of the period, or whereby the result of including such awards was anti-dilutive.

The following table shows the weighted-average number of anti-dilutive shares excluded from the diluted EPS calculation:

Three Months Ended March 31,

(In thousands)

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For more information regarding the fair value hierarchy and how we measure fair value, see Note 2–Summary of Significant Accounting Policies to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2021.

As of September 30, 2021 and December 31, 2020, our assets and liabilities carried at fair value on a recurring basis were as follows:

As of March 31, 2022 and December 31, 2021, our assets and liabilities carried at fair value on a recurring basis were as follows:

Level 1 Level 2 Level 3 Total Fair Value

September 30, 2021 (In thousands)

March 31, 2022 (In thousands)

Investment securities:

Corporate bonds $ — $ 9,736 $ — $ 9,736

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Asset-backed securities — 6,543 — 6,543

Loans held for sale — — 4,501 4,501

Total assets $ — $ 2,168,888 $ 4,501 $ 2,173,389

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December 31, 2021

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

Contingent consideration $ — $ — $ 1,347 $ 1,347

We based the fair value of our fixed income securities held as of September 30, 2021 and December 31, 2020 on quoted prices in active markets for similar assets.

We had no transfers between Level 1, Level 2 or Level 3 assets or liabilities during the three and nine months ended September 30, 2021 or 2020.

The following table presents changes in our contingent consideration payable for the three and nine months ended September 30, 2021 and 2020, which is categorized in Level 3 of the fair value hierarchy:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

(In thousands)

Balance, beginning of period $ 3,300 $ 7,300 $ 5,300 $ 9,300

Payments of contingent consideration ( 1,000 ) ( 1,000 ) ( 3,000 ) ( 3,000 )

Balance, end of period $ 2,300 $ 6,300 $ 2,300 $ 6,300

We based the fair value of our fixed income securities held as of March 31, 2022 and December 31, 2021 on quoted prices in active markets for similar assets.

We had no transfers between Level 1, Level 2 or Level 3 assets or liabilities during the three months ended March 31, 2022 or 2021.

A reconciliation of changes in fair value for Level 3 assets or liabilities are not considered material to these consolidated financial statements and therefore are not presented for any of the periods presented.

GREEN DOT CORPORATION

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Fair Value of Financial Instruments

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 September 30, 2021 and December 31, 2020 are presented in the table below.

September 30, 2021 December 31, 2020

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 March 31, 2022 and December 31, 2021 are presented in the table below.

March 31, 2022 December 31, 2021

Carrying Value Fair Value Carrying Value Fair Value

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Currently, we do not enter into any financing lease agreements.

Our leases have remaining lease terms between approximately 1 year to 4 years, some of which include renewal options.

As of December 31, 2020, we committed to a remote workforce strategy for most U.S.

based employees and recorded a substantial impairment charge to our lease right-of-use assets as we no longer intend to 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.

Our total lease expense amounted to approximately $ 1.0 million and $ 2.3 million for the three months ended September 30, 2021 and 2020, respectively, and $ 2.8 million and $ 6.9 million for the nine months ended September 30, 2021 and 2020, respectively.

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.

Our total lease expense amounted to approximately $ 1.1 million and $ 1.3 million for the three months ended March 31, 2022 and 2021, respectively.

Our lease expense is generally based on fixed payments stated within the agreements.

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

Supplemental Information

Supplemental information related to our ROU assets and related lease liabilities is as follows:

September 30, 2021

Additional Information

Additional information related to our ROU assets and related lease liabilities is as follows:

March 31, 2022

Cash paid for operating lease liabilities (in thousands) $ 2,134

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Weighted average discount rate 4.8 %

Maturities of our operating lease liabilities as of September 30, 2021 is as follows:

Maturities of our operating lease liabilities as of March 31, 2022 is as follows:

Operating Leases

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Financial Commitments

As discussed in Note 7 — Equity Method Investment , we are committed to make annual capital contributions in TailFin Labs, LLC of $ 35.0 million per year through January 2024.

Our definitive agreement to acquire all of the equity interests of UniRush provides for a minimum $ 4 million annual earn-out payment for five years following the closing, ending in February 2022.

As of September 30, 2021, the estimated fair value of our remaining earn-out payments amounted to $ 2.3 million, and is recorded in the current portion of other accrued liabilities on our consolidated balance sheets.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

As discussed in Note 7 — Equity Method Investments , we are committed to make annual capital contributions in TailFin Labs, LLC of $ 35.0 million per year from January 2020 through January 2024.

Our definitive agreement to acquire all of the equity interests of UniRush provided for a minimum $ 4 million annual earn-out payment for five years following the closing, and ended in February 2022.

The final earn-out payment of $ 1.6 million was outstanding as of March 31, 2022, and is recorded in the current portion of other accrued liabilities on our consolidated balance sheets.

The final earn-out payment was made in April 2022.

Litigation and Claims

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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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Plaintiff alleges that defendants made statements that were misleading because they allegedly failed to disclose details regarding our customer acquisition strategy and its impact on our financial performance.

The suit is purportedly brought on behalf of purchasers of our securities between May 9, 2018 and November 7, 2019, and seeks compensatory damages, fees and costs.

The suit is purportedly brought on behalf of purchasers of our securities

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

between May 9, 2018 and November 7, 2019, and seeks compensatory damages, fees and costs.

On October 6, 2021, the Court Appointed the New York Hotel Trades Council & Hotel Association of New York City, Inc.

Pension Fund as lead plaintiff, and on April 1, 2022, plaintiff filed its First Amended Complaint.

Pursuant to a stipulated agreement between the parties, defendants’ response to the First Amended Complaint must be filed by May 31, 2022.

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.

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The suit does not define the purported class allegedly damaged.

These cases have been related.

These cases have been related and, pursuant to a stipulated agreement between the parties, the Hellman suit is stayed pending resolution of any motions to dismiss in the Koffsman case reference above, after which time the parties will meet and confer on a case schedule, including the schedule for defendants to respond to the complaint.

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.

Refer to Note 20 — Subsequent Event for additional information regarding litigation and claims.

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Walmart 20 % 24 %

In addition, approximately 23 % and 19 % of our total operating revenues for the three and nine months ended September 30, 2021, respectively, were generated from a single BaaS partner, without a corresponding concentration to our gross profit for the period.

In addition, approximately 23 % and 16 % of our total operating revenues for the three months ended March 31, 2022 and 2021, respectively, were generated from a single BaaS partner, without a corresponding concentration to our gross profit for the periods.

Note 19— Segment Information

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

Our CODM organizes and manages the business primarily on the basis of the channels in which our product and services are offered and uses net revenues and segment profit to assess profitability.

Our Chief Operating Decision Maker (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:

Our operations are 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 America's 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 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 are marketed to third-party banks, program managers, and other companies seeking cash deposit and disbursement capabilities for their customers.

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.

The Corporate and Other segment primarily consists of net interest income earned by our bank, eliminations of intersegment revenues and expenses, unallocated corporate expenses, and other fixed costs that are not considered when our CODM evaluates segment performance, such as salaries, wages and related benefits for our employees, professional service fees, software licenses, telephone and communication costs, rent and utilities, and insurance.

Revenues within Corporate and Other are comprised of net interest income and certain other investment 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.

2 unchanged sentences

Note 19—Segment Information (continued)

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.

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Segment Revenue (In thousands)

4 unchanged sentences

Total segment revenues 394,678 379,805

Net revenue adjustment 10,575 11,626 35,691 43,475

BaaS commissions and processing expenses 6,512 13,681

Other income ( 573 ) —

Total operating revenues $ 400,617 $ 393,486

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.

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Segment 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, as well as certain other investment income earned by our bank, which is included in Corporate and Other.

Three Months Ended March 31,

Segment Profit (In thousands)

4 unchanged sentences

Total segment profit 90,326 73,360

Reconciliation to income (loss) before income taxes

Reconciliation to income before income taxes

Depreciation and amortization of property, equipment and internal-use software 13,804 13,200

3 unchanged sentences

Other expense 981 2,049

Operating income (loss) 8,830 ( 2,650 ) 74,618 61,589

Operating income 51,592 33,985

Interest expense, net 87 37

Other income (expense), net 849 ( 1,650 ) 1,396 696

Income (loss) before income taxes $ 9,641 $ ( 4,339 ) $ 75,901 $ 61,562

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 20— Subsequent Event

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.

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.

Given the uncertainty of litigation and the preliminary stage of this claim, we are currently unable to estimate the probability of the outcome of this action or the range of reasonably possible loss, if any.

Other expense, net 770 1,086

Income before income taxes $ 50,735 $ 32,862

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-Q

Item 1. Financial Statements