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Item 1. Financial Statements

2022-11-09 compared with 2022-08-08 · 110 added, 117 removed, 720 unchanged (24% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Assets (In thousands, except par value)

8 unchanged sentences

Investment securities available-for-sale, at fair value 2,393,796 2,115,501

Loans to bank customers, net of allowance for loan losses of $ 10,204 and $ 5,555 as of June 30, 2022 and December 31, 2021, respectively

Loans to bank customers, net of allowance for loan losses of $ 9,413 and $ 5,555 as of September 30, 2022 and December 31, 2021, respectively

20,600 19,270

24 unchanged sentences

Class A common stock, $ 0.001 par value;

100,000 shares authorized as of June 30, 2022 and December 31, 2021;

53,740 and 54,868 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

100,000 shares authorized as of September 30, 2022 and December 31, 2021;

52,502 and 54,868 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 357,050 401,055

6 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

28 unchanged sentences

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, Six Months Ended June 30,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS

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

2022 2021 2022 2021

2 unchanged sentences

Other comprehensive (loss) income

Unrealized holding (loss) gains, net of tax ( 79,983 ) 8,652 ( 192,579 ) ( 13,892 )

Unrealized holding loss, net of tax ( 112,269 ) ( 4,010 ) ( 304,848 ) ( 17,902 )

Comprehensive (loss) income $ ( 107,573 ) $ 3,325 $ ( 246,520 ) $ 40,101

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Three Months Ended June 30, 2022

Three Months Ended September 30, 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 March 31, 2022 54,293 $ 54 $ 388,299 $ 737,994 $ ( 142,403 ) $ 983,944

Balance at June 30, 2022 53,740 $ 54 $ 376,902 $ 753,002 $ ( 222,386 ) $ 907,572

Common stock issued under stock plans, net of withholdings and related tax effects 71 — ( 655 ) — — ( 655 )

3 unchanged sentences

Other comprehensive loss — — — — ( 112,269 ) ( 112,269 )

Balance at June 30, 2022 53,740 $ 54 $ 376,902 $ 753,002 $ ( 222,386 ) $ 907,572

Three Months Ended June 30, 2021

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

Balance at September 30, 2022 52,502 $ 53 $ 357,050 $ 757,698 $ ( 334,655 ) $ 780,146

Three Months Ended September 30, 2021

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

Shares Amount

(In thousands)

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

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

Common stock issued under stock plans, net of withholdings and related tax effects 31 — ( 594 ) — — ( 594 )

1 unchanged sentence

Net income — — — 7,335 — 7,335

Other comprehensive income — — — — 8,652 8,652

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

Other comprehensive loss — — — — ( 4,010 ) ( 4,010 )

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

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

7 unchanged sentences

Other comprehensive loss — — — — ( 304,848 ) ( 304,848 )

Balance at June 30, 2022 53,740 $ 54 $ 376,902 $ 753,002 $ ( 222,386 ) $ 907,572

Six Months Ended June 30, 2021

Balance at September 30, 2022 52,502 $ 53 $ 357,050 $ 757,698 $ ( 334,655 ) $ 780,146

Nine Months Ended September 30, 2021

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

6 unchanged sentences

Other comprehensive loss — — — — ( 17,902 ) ( 17,902 )

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

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

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

39 unchanged sentences

Repurchase of Class A common stock ( 74,050 ) —

Net cash (used in) provided by financing activities ( 81,117 ) 544,849

Net cash provided by financing activities 69,459 564,696

Net (decrease) increase in unrestricted cash, cash equivalents and restricted cash ( 506,568 ) 312,275

21 unchanged sentences

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 six months ended June 30, 2022, other than the adoption of the accounting pronouncements discussed herein.

There have been no material changes to our significant accounting policies during the nine months ended September 30, 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 June 30, 2022 and through the date of this report.

These financial statements were prepared using information reasonably available as of September 30, 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.

15 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

$ 132,042 $ 162,589 $ 37,671 $ 332,302

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

$ 432,862 $ 454,101 $ 189,130 $ 1,076,093

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Consumer Services B2B Services Money Movement Services Total

7 unchanged sentences

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.

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

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 $ 9.0 million and $ 9.1 million in revenue for the three months ended June 30, 2022 and 2021, respectively, and $ 25.5 million and $ 26.6 million for the six months ended June 30, 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.

We recognized approximately $ 25.8 million and $ 26.6 million for the nine months ended September 30, 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.

6 unchanged sentences

(In thousands)

June 30, 2022

September 30, 2022

Corporate bonds $ 10,000 $ — $ ( 742 ) $ 9,258

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

As of June 30, 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:

As of September 30, 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

1 unchanged sentence

(In thousands)

June 30, 2022

September 30, 2022

Corporate bonds $ 9,258 $ ( 742 ) $ — $ — $ 9,258 $ ( 742 )

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

As such, we have not recorded any significant credit-related impairment losses during the three and six months ended June 30, 2022 or 2021 on our available-for-sale investment securities.

Unrealized losses as of June 30, 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.

Substantially all of the underlying securities within our investment portfolio were in an unrealized loss position as of June 30, 2022 and December 31, 2021 due to the timing of our investment purchases, as a significant portion of our investments were purchased prior to recent increases in interest rates by the Federal Reserve.

As such, we have not recorded any significant credit-related impairment losses during the three and nine months ended September 30, 2022 or 2021 on our available-for-sale investment securities.

Unrealized losses as of September 30, 2022 and December 31, 2021 are the result of continued increases in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

Substantially all of the underlying securities within our investment portfolio were in an unrealized loss position as of September 30, 2022 and December 31, 2021 due to the timing of our investment purchases, as a significant portion of our investments were purchased prior to recent increases in interest rates by the Federal Reserve.

GREEN DOT CORPORATION

2 unchanged sentences

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 June 30, 2022, the contractual maturities of our available-for-sale investment securities were as follows:

As of September 30, 2022, the contractual maturities of our available-for-sale investment securities were as follows:

Amortized cost Fair value

8 unchanged sentences

Accounts receivable, net consisted of the following:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(In thousands)

11 unchanged sentences

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

10 unchanged sentences

(In thousands)

June 30, 2022

September 30, 2022

Residential $ — $ — $ — $ — $ 4,376 $ 4,376

21 unchanged sentences

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

As of June 30, 2022 and December 31, 2021, the fair value of the loans held for sale amounted to approximately $ 4.3 million and $ 5.1 million, respectively.

As of September 30, 2022 and December 31, 2021, the fair value of the loans held for sale amounted to approximately $ 4.1 million and $ 5.1 million, respectively.

Nonperforming Loans

1 unchanged sentence

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.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(In thousands)

14 unchanged sentences

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:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Non-Classified Classified Non-Classified Classified

8 unchanged sentences

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

5 unchanged sentences

Balance, end of period $ 9,413 $ 7,451 $ 9,413 $ 7,451

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.

Note 7— Equity Method Investments

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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.

Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally

Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions.

GREEN DOT CORPORATION

1 unchanged sentence

Note 7—Equity Method Investments (continued)

able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions.

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 June 30, 2022 and December 31, 2021, our net investment in TailFin Labs amounted to approximately $ 89.4 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 approximately $ 5.0 million and $ 0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $ 7.1 million and $ 2.3 million for the six months ended June 30, 2022 and 2021, respectively, which are recorded as a component of other income and expense on our consolidated statements 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 June 30, 2022 and December 31, 2021, respectively.

Equity in earnings from this investment were de minimis for the three months ended June 30, 2022 and approximately $ 2.1 million for the three months ended June 30, 2021.

We recorded equity in earnings of approximately $ 0.4 million and $ 2.9 million for the six months ended June 30, 2022 and 2021, respectively.

As of September 30, 2022 and December 31, 2021, our net investment in TailFin Labs amounted to approximately $ 86.2 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 approximately $ 3.2 million for the three months ended September 30, 2022 and minimal equity in losses for the three months ended September 30, 2021, and $ 10.3 million and $ 2.3 million for the nine months ended September 30, 2022 and 2021, respectively.

These amounts are recorded as a component of other income and expense on our consolidated statements of operations.

Our equity method investments also include an investment held by our bank, which amounted to $ 4.8 million and $ 6.4 million at September 30, 2022 and December 31, 2021, respectively.

We recorded equity in losses from this investment of $ 2.0 million and $ 1.6 million for the three and nine months ended September 30, 2022, respectively, and equity in earnings of $ 0.7 million and $ 3.6 million for the three and nine months ended September 30, 2021, respectively.

Note 8— Deposits

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(In thousands)

9 unchanged sentences

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

June 30, 2022

September 30, 2022

(In thousands)

14 unchanged sentences

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

As of June 30, 2022, we had no borrowings outstanding on the 2019 Revolving Facility and had the full amount available for use.

As of September 30, 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 0.50 %, (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.

6 unchanged sentences

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 June 30, 2022, we were in compliance with all such covenants.

At September 30, 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 meaningful cash interest expense related to our debt during the three and six months ended June 30, 2022 and 2021.

We did no t incur any meaningful cash interest expense related to our debt during the three and nine months ended September 30, 2022 and 2021.

Note 10— Income Taxes

Income tax expense for the six months ended June 30, 2022 and 2021 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

Income tax expense for the nine months ended September 30, 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:

Six Months Ended June 30,

Nine Months Ended September 30,

federal statutory tax rate 21.0 % 21.0 %

6 unchanged sentences

Effective tax rate 24.3 % 23.6 %

The effective tax rate for the nine months ended September 30, 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 (the "IRC") 162(m) limitation on the

GREEN DOT CORPORATION

1 unchanged sentence

Note 10—Income Taxes (continued)

The effective tax rate for the six months ended June 30, 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 net increase in the effective tax rate for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 is primarily due to a $ 3.1 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 $ 1.2 million for the six months ended June 30, 2022, compared to a $ 1.9 million excess tax benefit for the prior year comparable period.

deductibility of executive compensation.

The net increase in the effective tax rate for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 is primarily due to a $ 3.8 million decline in excess tax benefits from stock-based compensation and an increase of $ 0.4 million in state income taxes, net of federal benefits.

We recognized a discrete tax expense related to tax shortfalls from stock based-compensation of $ 1.9 million for the nine months ended September 30, 2022, compared to a $ 1.9 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 $ 3.4 million subject to the IRC 162(m) limitation on the deductibility of executive compensation.

On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law.

The IRA contains a number of revisions to the IRC, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022.

These tax law revisions have no immediate effect and we do not expect that they will have a material impact on our results of operations in the future.

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 six months ended June 30, 2022 and 2021, the provision for GILTI tax expense was not material to our financial statements.

For the nine months ended September 30, 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 June 30, 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.

As of September 30, 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 June 30, 2022.

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

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

As of June 30, 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.

As of September 30, 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.

2 unchanged sentences

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 June 30, 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.

As of September 30, 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:

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

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The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate $ 12,074 $ 10,798

As of June 30, 2022 and 2021, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.0 million and $ 0.6 million, respectively.

As of September 30, 2022 and 2021, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.1 million and $ 0.7 million, respectively.

GREEN DOT CORPORATION

5 unchanged sentences

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 an initial 781,555 shares of our Class A Common Stock.

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

In March 2022, we entered into an accelerated share repurchase arrangement ("ASR") with a financial institution for an up-front payment of $ 25 million.

Final settlement of the ASR was completed in April 2022.

The final number of shares received upon settlement for the ASR was 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.

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

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

Total shares repurchased under the ASR amounted to 914,037 shares at a volume-weighted average price of $ 27.35 .

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

The ASR was accounted for in two separate transactions:

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

As of June 30, 2022, we have repurchased 712,057 shares at an average price of $ 26.75 under our 10b5-1 plan, with approximately $ 56 million available for additional purchases.

As of September 30, 2022, we have repurchased 2,020,952 shares at a volume-weighted average price of $ 24.27 under our 10b5-1 plan, with approximately $ 26 million available for additional purchases.

Walmart Restricted Shares

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

As of June 30, 2022, there were 162,502 unvested shares outstanding.

As of September 30, 2022, there were 81,253 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 $ 5.6 million and $ 8.4 million for the three months ended June 30, 2022 and 2021, respectively, and $ 20.5 million and $ 25.6 million for the six months ended June 30, 2022 and 2021, respectively.

The total stock-based compensation expense recognized was $ 10.8 million and $ 11.5 million for the three months ended September 30, 2022 and 2021, respectively, and $ 31.3 million and $ 37.1 million for the nine months ended September 30, 2022 and 2021, respectively.

GREEN DOT CORPORATION

2 unchanged sentences

Restricted Stock Units

Restricted stock unit activity for awards subject to only service conditions was as follows for the six months ended June 30, 2022:

Restricted stock unit activity for awards subject to only service conditions was as follows for the nine months ended September 30, 2022:

Shares Weighted-Average Grant-Date Fair Value

5 unchanged sentences

Restricted stock units canceled ( 226 ) 42.13

Outstanding at June 30, 2022

Outstanding at September 30, 2022

1,630 $ 36.80

Performance-Based Restricted Stock Units

Performance-based restricted stock unit activity for the six months ended June 30, 2022 was as follows:

Performance-based restricted stock unit activity for the nine months ended September 30, 2022 was as follows:

Shares Weighted-Average Grant-Date Fair Value

5 unchanged sentences

Performance restricted stock units canceled ( 511 ) 34.32

Outstanding at June 30, 2022

1,193 $ 34.72

Outstanding at September 30, 2022

We grant performance-based restricted stock units to certain employees that are subject to the attainment of pre-established internal performance conditions, market conditions, or a combination thereof (collectively referred to herein as "performance-based restricted stock units").

3 unchanged sentences

Stock Options

Total stock option activity for the six months ended June 30, 2022 was as follows:

Total stock option activity for the nine months ended September 30, 2022 was as follows:

Options Weighted-Average Exercise Price

3 unchanged sentences

Options exercised ( 7 ) 18.19

Outstanding at June 30, 2022

Outstanding at September 30, 2022

1,197 $ 26.67

Exercisable at June 30, 2022

Exercisable at September 30, 2022

1,031 $ 27.12

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

3 unchanged sentences

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

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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 June 30, 2022 and December 31, 2021, our assets and liabilities carried at fair value on a recurring basis were as follows:

As of September 30, 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

June 30, 2022 (In thousands)

September 30, 2022 (In thousands)

Investment securities:

16 unchanged sentences

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

We based the fair value of our fixed income securities held as of June 30, 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 and six months ended June 30, 2022 or 2021.

We based the fair value of our fixed income securities held as of September 30, 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 and nine months ended September 30, 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.

24 unchanged sentences

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 June 30, 2022 and December 31, 2021 are presented in the table below.

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

Carrying Value Fair Value Carrying Value Fair Value

9 unchanged sentences

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

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 $ 1.2 million and $ 0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $ 2.3 million and $ 1.8 million for the six months ended June 30, 2022 and 2021, respectively.

Our leases have remaining lease terms of less than 1 year to approximately 10 years, most of which generally include renewal options of varying terms.

Our total lease expense amounted to approximately $ 1.0 million for the three months ended September 30, 2022 and 2021, and $ 3.3 million and $ 2.8 million for the nine months ended September 30, 2022 and 2021, respectively.

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

1 unchanged sentence

Additional Information

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

June 30, 2022

Additional information related to our right of use assets and related lease liabilities is as follows:

September 30, 2022

Cash paid for operating lease liabilities (in thousands) $ 6,490

1 unchanged sentence

Weighted average discount rate 4.9 %

Maturities of our operating lease liabilities as of June 30, 2022 is as follows:

Maturities of our operating lease liabilities as of September 30, 2022 is as follows:

Operating Leases

1 unchanged sentence

Remainder of 2022 $ 333

Thereafter 1,634

imputed interest ( 2,354 )

3 unchanged sentences

As discussed in Note 7 — Equity Method Investments , we are committed to making 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 $ 4.0 million annual earn-out payment for five years following the closing, and ended in February 2022.

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

Litigation and Claims

13 unchanged sentences

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

Defendants filed a motion to dismiss the First Amended Complaint on May 31, 2022, and the motion is scheduled to be heard on November 7, 2022.

Defendants filed a motion to dismiss the First Amended Complaint on May 31, 2022, and the motion is scheduled to be heard on December 12, 2022.

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

Streit, et al.

Streit, et al., No.

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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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, except as disclosed.

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 $ 165.0 million in cash for the TRS assets.

On October 4, 2021, we announced that 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 $ 5.0 million, which we recorded in the fourth quarter of 2021 and paid in January 2022 (the "Termination Fee").

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

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

On June 3, 2022, Republic Bank agreed to settle its claims in exchange for a $ 13.0 million payment (which amount was in addition to the Termination Fee) by us to Republic Bank, which we recorded during three months ended June 30, 2022 and is included as a component of other general and administrative expenses on our consolidated statements of operations.

Other Legal Matters

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 18— Significant Retailer and Partner Concentration

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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 June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

Walmart 19 % 23 % 20 % 23 %

In addition, approximately 29 % and 20 % of our total operating revenues for the three months ended June 30, 2022 and 2021, respectively, and 26 % and 18 % for the six months ended June 30, 2022 and 2021, respectively, were generated from a single BaaS partner, without a corresponding concentration to gross profit for the periods.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 18—Significant Retailer and Partner Concentration (continued)

In addition, approximately 35 % and 23 % of our total operating revenues for the three months ended September 30, 2022 and 2021, respectively, and 29 % and 19 % for the nine months ended September 30, 2022 and 2021, respectively, were generated from a single BaaS partner, but without a corresponding concentration to gross profit for the periods.

Note 19— Segment Information

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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 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.

Our Corporate and Other segment primarily consists of net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of intersegment revenues and expenses, and unallocated corporate expenses, which include our fixed expenses such as salaries, wages and related benefits for our employees, professional service fees, software licenses, telephone and communication costs, rent, utilities, and insurance.

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.

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

9 unchanged sentences

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 June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

17 unchanged sentences

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