What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-03-01 compared with 2022-02-28 · 163 added, 189 removed, 1186 unchanged (23% of the section changed)

15 unchanged sentences

In our opinion, Green Dot Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated February 25, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Green Dot Corporation as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements") and our report dated February 28, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

91 unchanged sentences

Operating lease liabilities 5,247 8,209

Net deferred tax liabilities — 7,192

Line of credit 35,000 —

Total liabilities 4,007,695 3,654,804

6 unchanged sentences

Retained earnings 763,582 699,370

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

Accumulated other comprehensive loss ( 322,728 ) ( 29,807 )

Total stockholders’ equity 781,481 1,070,673

20 unchanged sentences

Interest expense, net 255 150 761

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

Other expense, net ( 10,199 ) ( 2,624 ) ( 1,217 )

Income before income taxes 83,921 63,700 28,095

18 unchanged sentences

Unrealized holding (loss) gain, net of tax ( 292,921 ) ( 33,235 ) 1,388

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

Comprehensive (loss) income $ ( 228,709 ) $ 14,245 $ 24,519

See notes to consolidated financial statements

7 unchanged sentences

Stock-based compensation — — 53,694 — — 53,694

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

Walmart restricted shares 975 1 ( 1 ) — — —

Net income — — — 23,131 — 23,131

Other comprehensive income — — — — 1,388 1,388

Cumulative effect adjustment for adoption of ASU No.

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

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

1 unchanged sentence

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

Walmart restricted shares 975 1 ( 1 ) — — —

Net income — — — 47,480 — 47,480

Other comprehensive income — — — — 1,388 1,388

Cumulative effect adjustment for adoption of ASU No.

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

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

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

1 unchanged sentence

Stock-based compensation — — 34,812 — — 34,812

Repurchases of Class A Common Stock ( 4,064 ) ( 4 ) ( 95,521 ) — — ( 95,525 )

Net income — — — 64,212 — 64,212

15 unchanged sentences

Stock-based compensation 34,812 51,419 53,694

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

Losses (earnings) in equity method investments 15,648 ( 1,579 ) 6,290

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

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

Amortization of (discount) premium on available-for-sale investment securities ( 1,434 ) 2,563 999

Impairment of long-lived assets 4,264 — 21,719

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

Deferred income tax (benefit) expense ( 6,674 ) 2,722 ( 15,003 )

Other ( 4,666 ) 144 169

19 unchanged sentences

Financing activities

Repayments of borrowings from notes payable — — ( 60,000 )

Borrowings on revolving line of credit 100,000 — 100,000

6 unchanged sentences

Repurchase of Class A common stock ( 95,525 ) — —

Deferred financing costs — — ( 719 )

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

Other financing activities ( 4,500 ) ( 4,500 ) —

Net cash provided by financing activities 36,707 1,030,393 1,007,201

Net (decrease) increase in unrestricted cash, cash equivalents and restricted cash ( 505,795 ) ( 171,061 ) 430,547

19 unchanged sentences

We prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States of America, or U.S.

We eliminate all significant intercompany balances and transactions on consolidation.

We include the results of operations of acquired companies from the date of acquisition.

We consolidated our wholly-owned subsidiaries and eliminated all significant intercompany balances and transactions.

Use of Estimates and Assumptions

4 unchanged sentences

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

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

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

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.

Actual results may differ from these estimates due to a variety of factors, including those identified under "Part I, Item 1A.

Risk Factors" in this report.

Unrestricted Cash and Cash Equivalents

21 unchanged sentences

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

Included in this balance are also disbursements of customer funds that have been initiated but not yet settled.

Settlement obligations represent the customer funds received by our subsidiary bank that are due to third-party card issuing banks upon activation.

74 unchanged sentences

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

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

We recorded total impairment charges of $ 4.3 million, $ 0 , and $ 21.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Impairment charges for the year ended December 31, 2022 related to internal-use software that we determined would no longer be utilized.

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

7 unchanged sentences

If it is more likely-than-not goodwill is impaired, a quantitative impairment test compares the estimated fair value of each reporting unit to its carrying amount, including goodwill.

If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired;

however, if the carrying amount of the reporting unit exceeds its estimated fair value, the difference is recorded as an impairment loss directly to goodwill.

If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired, however, if the carrying amount of the reporting unit exceeds its estimated fair value, the difference is recorded as an impairment loss directly to goodwill.

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

62 unchanged sentences

Cash Processing Revenues

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

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

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

26 unchanged sentences

Stock-Based Compensation

We record employee stock-based compensation expense based on the grant-date fair value of the award.

We record stock-based compensation expense based on the grant-date fair value of the award.

For stock options and stock purchases under our employee stock purchase plan, or ESPP, we base compensation expense on fair values estimated at the grant date using the Black-Scholes option-pricing model.

49 unchanged sentences

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.

1 unchanged sentence

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

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

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 .

Note 3— Revenues

29 unchanged sentences

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

Also excludes the effects of intersegment revenues.

Also excludes the effects of inter-segment 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.

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.

Significant Judgments and Estimates

5 unchanged sentences

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

We recognized approximately $ 26.7 million, $ 25.9 million and $ 31.8 million for the years ended December 31, 2021, 2020, and 2019, or substantially all of the amount of contract liabilities included in deferred revenue at the beginning of the respective periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods.

We recognized approximately $ 26.0 million, $ 26.7 million and $ 25.9 million for the years ended December 31, 2022, 2021, and 2020, respectively, or substantially all of the amount of contract liabilities included in deferred revenue at the beginning of the respective periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods.

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.

17 unchanged sentences

Municipal bonds 29,613 — ( 6,640 ) 22,973

Asset-backed securities 7,326 99 ( 4 ) 7,421

Total investment securities $ 2,791,843 $ 8 $ ( 428,164 ) $ 2,363,687

6 unchanged sentences

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

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

As of December 31, 2022 and 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

7 unchanged sentences

Municipal bonds 16,333 ( 3,370 ) 6,641 ( 3,270 ) 22,974 ( 6,640 )

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

Total investment securities $ 917,373 $ ( 71,396 ) $ 1,443,708 $ ( 356,768 ) $ 2,361,081 $ ( 428,164 )

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 )

1 unchanged sentence

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

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

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

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

As such, we have not recorded any significant credit-related impairment losses during the years ended December 31, 2022 or 2021 on our available-for-sale investment securities.

Unrealized losses as of December 31, 2022 and 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 December 31, 2022 and 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 and from general volatility in market conditions.

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.

54 unchanged sentences

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

1 unchanged sentence

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 up to a pre-authorized amount in excess of their available card balance.

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.

1 unchanged sentence

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

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

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

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

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

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

In December 2021, we made the determination to sell a portion of our secured credit card portfolio and reclassified these assets as loans held for sale.

These loans are 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 statements of operations.

As of December 31, 2022 and 2021, the fair value of the loans held for sale amounted to approximately $ 5.3 million and $ 5.1 million, respectively.

Nonperforming Loans

27 unchanged sentences

Total loans $ 27,930 $ 2,569 $ 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 related to extensions of the maturity dates at a stated interest rate lower than the current market rate for new debt with similar risk.

As of December 31, 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 December 31, 2021 and 2020:

December 31, 2021 December 31, 2020

Unpaid Principal Balance Carrying Value Unpaid Principal Balance Carrying Value

(In thousands)

Residential $ 195 $ 146 $ 240 $ 180

Installment 115 86 137 103

Allowance for Credit Losses

8 unchanged sentences

Balance, end of period $ 9,078 $ 5,555 $ 757

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7— Equity Method Investments

7 unchanged sentences

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7—Equity Method Investments (continued)

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

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

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

As of December 31, 2022 and 2021, our net investment in TailFin Labs amounted to approximately $ 82.4 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 $ 14.1 million, $ 2.3 million and $ 7.0 million for the years ended December 31, 2022, 2021 and 2020, 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 December 31, 2022 and 2021, respectively.

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

We recorded equity in losses from this investment of approximately $ 1.6 million for the year ended December 31, 2022, and equity in earnings of $ 3.9 million and $ 0.7 million for the years ended December 31, 2021 and 2020, respectively.

Note 8— Property and Equipment

13 unchanged sentences

Included in those amounts are depreciation expense related to internal-use software of $ 49.9 million, $ 47.5 million and $ 43.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8—Property and Equipment (continued)

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

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

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

See Note 20—Leases , for additional information.

We recorded an impairment charge to property and equipment of $ 4.3 million, $ 0 , and $ 21.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Impairment charges for the year ended December 31, 2022 related to internal-use software that we determined would no longer be utilized.

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

Note 9— Goodwill and Intangible Assets

4 unchanged sentences

Goodwill and intangible assets $ 445,083 $ 466,943

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 9—Goodwill and Intangible Assets (continued)

There were no changes in the composition of goodwill from the previous year.

13 unchanged sentences

Amortization expense on finite-lived intangibles, a component of other general and administrative expenses, was $ 23.5 million, $ 27.8 million, and $ 28.1 million for the years ended December 31, 2022, 2021, and 2020, respectively.

None of our intangible assets were considered impaired as of December 31, 2021 or 2020.

None of our intangible assets were impaired as of December 31, 2022 or 2021.

The following table shows our estimated amortization expense for intangible assets for each of the next five succeeding years and thereafter:

3 unchanged sentences

Total $ 143,293

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10— Deposits

10 unchanged sentences

Total deposits $ 3,450,105 $ 3,286,889

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Deposits (continued)

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

8 unchanged sentences

Note 11— Debt

2019 Revolving Facility

In October 2019, we entered into a secured credit agreement with Wells Fargo Bank, National Association, and other lenders party thereto.

1 unchanged sentence

We use the proceeds of any borrowings under the 2019 Revolving Facility for working capital and other general corporate purposes, subject to the terms and conditions set forth in the credit agreement.

We classify amounts outstanding as long-term on our consolidated balance sheets;

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

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

At our election, loans made under the credit agreement bear interest at 1) a LIBOR rate (the “LIBOR Rate") or 2) a base rate determined by reference to the highest of (a) the United States federal funds rate plus .50 %, (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.

We classify amounts outstanding as long-term on our consolidated balance sheets, however, we may make voluntary repayments at any time prior to maturity.

As of December 31, 2022, the outstanding balance on the 2019 Revolving Facility was $ 35 million.

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 plus 1.0 % (the “Base Rate"), plus in either case an applicable margin.

The margin is dependent upon on our total leverage ratio and varies from 1.25 % to 2.00 % for LIBOR Rate loans and 0.25 % to 1.00 % for Base Rate loans.

The interest rate on our outstanding balance as of December 31, 2022 was 5.52 %.

We also pay a commitment fee, which varies from 0.20 % to 0.35 % per annum on the actual daily unused portions of the 2019 Revolving Facility.

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 in anticipation of the discontinuation of LIBOR under reference rate reform.

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.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11—Debt (continued)

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

2 unchanged sentences

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.

Senior Credit Facility

In October 2014, we entered into a $ 225.0 million credit agreement with Bank of America, N.A., as an administrative agent, Wells Fargo Bank, National Association, and the other lenders party thereto.

The credit agreement provided for 1) a $ 75.0 million five-year revolving facility (the "Revolving Facility") and 2) a five-year $ 150.0 million term loan facility ("Term Facility" and, together with the Revolving Facility, the "Senior Credit Facility").

In March 2019, we elected to make a voluntary prepayment of $ 60.0 million to retire the Term Facility without penalty or additional premium.

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

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

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

We did no t incur any meaningful cash interest expense related to our debt during the years ended December 31, 2022 and 2021.

Cash interest expense related to our debt was $ 0.6 million for the year ended December 31 , 2020.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12— Stockholders’ Equity

9 unchanged sentences

Comprehensive Income

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

The tax impact on unrealized losses and gains on investment securities available-for-sale for the years ended December 31, 2022 , 2021 and 2020 was approximately $( 94.6 ) million, $( 11.5 ) million and $ 0.3 million, respectively.

Stock Repurchase Program

In February 2022, our Board of Directors authorized an increase to our stock repurchase program to $ 100 million for any future repurchases.

As of December 31, 2022, we have an authorized $ 4.5 million remaining under our current stock repurchase program for additional repurchases.

Accelerated Share Repurchases

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 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:

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 were recorded as a reduction to common stock with the remainder recorded as a reduction to additional paid-in capital.

The ASR met all of the applicable criteria for equity classification, and therefore was not accounted for as a derivative instrument.

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 were retired upon repurchase, but remain authorized for registration and issuance in the future.

GREEN DOT CORPORATION

1 unchanged sentence

Note 12—Stockholders’ Equity (continued)

Stock Repurchase Program

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

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

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

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

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

Other Repurchases

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

The agreement allowed for $ 10 million of monthly share repurchases through December 31, 2022 until the contract amount was reached, unless otherwise terminated.

In December 2022, we early terminated the agreement just prior to completing the entire $ 75 million of repurchases.

As of December 31, 2022, we repurchased 3,150,181 shares at a volume-weighted average price of $ 22.39 under our 10b5-1 plan.

Walmart Restricted Shares

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

The shares vest in equal monthly increments through December 1, 2022, however, Walmart is entitled to voting rights and 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 December 31, 2021, there were 325,000 unvested shares outstanding.

The shares vested in equal monthly increments through December 1, 2022, however, Walmart was 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 were included in our total Class A shares outstanding at the end of each period.

As of December 31, 2022, there were no unvested shares remaining.

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

Note 13— Employee Stock-Based Compensation

Note 13— Stock-Based Compensation

In June 2010, our board of directors adopted, and in July 2010 our stockholders approved, the 2010 Equity Incentive Plan, which replaced our 2001 Stock Plan, and the 2010 Employee Stock Purchase Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13—Employee Stock-Based Compensation (continued)

Note 13—Stock-Based Compensation (continued)

Restricted stock unit activity for the year ended December 31, 2022 was as follows:

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Outstanding at December 31, 2021

1,377 $ 35.96

Performance restricted stock units granted (at target) 88 27.74

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Outstanding at December 31, 2022

1,377 $ 35.96

The total fair value of all performance-based restricted stock vested for the years ended December 31, 2022, 2021 and 2020 was $ 4.2 million, $ 17.6 million and $ 12.4 million, respectively, based on the price of our Class A common stock on the vesting date.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13—Employee Stock-Based Compensation (continued)

Note 13—Stock-Based Compensation (continued)

Stock Options

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1,171 26.97 3.66 $ —

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

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

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

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

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

We have not issued any stock option awards from our 2010 Equity Incentive Plan during the year ended December 31, 2022.

The total intrinsic value of options exercised was $ 0.1 million, $ 2.0 million and $ 10.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.

As of December 31, 2022, the aggregate intrinsic value of our option awards outstanding was zero, as the fair value per Class A common share exceeded each option's exercise price.

As of December 31, 2022, there was $ 41.6 million of aggregate unrecognized compensation cost related to unvested restricted stock units (including performance-based awards) expected to be recognized in compensation expense in future periods, with a weighted-average period of 1.76 years.

As of December 31, 2021, there was $ 1.1 million remaining of unrecognized compensation cost related to stock options, with a weighted-average period of 0.81 years.

As of December 31, 2022, there was no remaining unrecognized compensation cost related to stock options .

Note 14— Income Taxes

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Income tax expense $ 19,709 $ 16,220 $ 4,964

Income tax expense 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:

GREEN DOT CORPORATION

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Note 14—Income Taxes (continued)

Income tax expense 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:

Year Ended December 31,

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General business credits ( 3.2 ) ( 2.2 ) ( 10.9 )

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

Stock-based compensation 3.2 ( 2.6 ) ( 7.7 )

IRC 162(m) limitation 0.8 8.0 17.2

Capital loss valuation allowance release — — ( 1.1 )

Non-deductible penalties — 1.1 —

Nondeductible penalties — — 1.1

Other ( 0.5 ) 0.1 0.1

Effective tax rate 23.5 % 25.5 % 17.7 %

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

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

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

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

The effective tax rate for the year ended December 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, stock-based compensation, and the Internal Revenue Code (the "IRC") 162(m) limitation on the deductibility of executive compensation.

The decrease in the effective tax rate for the year ended December 31, 2022 as compared to the prior year ended December 31, 2021 is primarily due to a decrease of the IRC 162(m) limitation on the deductibility of certain executive compensation and an increase of general business credits.

This decrease was partially offset by tax shortfalls from stock-based compensation and an expenses related to state taxes, net of federal benefits.

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.

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Tax credit carryforwards 11,770 11,409

Unrealized holding losses 9,730 —

Unrealized loss on available-for-sale securities 105,393 9,730

Other 5,284 1,995

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Intangible assets 15,020 12,482

Gift card revenue — 1,389

Lease right-of-use assets 1,366 1,684

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

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

As of December 31, 2022 and 2021, we did not have a valuation allowance on any of our deferred tax assets as we believe it is more-likely-than-not that we will realize the benefits of our deferred tax assets.

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

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

In regards to the state net operating loss carryforwards, approximately $ 57.3 million will expire between 2026 and 2041, while the remaining balance of approximately $ 31.8 million, does not expire and carries forward indefinitely.

In regard to the state net operating loss carryforwards, approximately $ 59.0 million will expire between 2026 and 2042, while the remaining balance of approximately $ 43.3 million, does not expire and carries forward indefinitely.

The net operating losses are subject to an annual IRC Section 382 limitation which restricts their utilization against taxable income in future periods.

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Note 15— Earnings per Common Share

The calculation of basic and diluted EPS was as follows:

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

Year Ended December 31,

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Diluted earnings per Class A common share $ 1.19 $ 0.85 $ 0.42

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.

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 and performance-based stock options 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.

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:

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Total 2,047 1,714 1,929

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16— Fair Value Measurements

Under applicable accounting guidance, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

We determine the fair values of our financial instruments based on the fair value hierarchy established under applicable accounting guidance, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16—Fair Value Measurements (continued)

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

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Municipal bonds — 22,973 — 22,973

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

Loans held for sale — — 5,324 5,324

Total assets $ — $ 2,363,687 $ 5,324 $ 2,369,011

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

December 31, 2021

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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 December 31, 2021 and 2020 on quoted prices in active markets for similar assets.

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

We had no transfers between Level 1, Level 2 or Level 3 assets or liabilities during the years ended December 31, 2022 and 2021.

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

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

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

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

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

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

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

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

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

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

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

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Contingent Consideration

The fair value of contingent consideration obligations are estimated through valuation models designed to estimate the probability of such contingent payments based on various assumptions.

Estimated payments are discounted using present value techniques to arrive at an estimated fair value.

Our contingent consideration payable is classified as Level 3 because we use unobservable inputs to estimate fair value, including the probability of achieving certain earnings thresholds and appropriate discount rates.

Our contingent consideration payable is included as a component of other accrued liabilities on our consolidated balance sheets and changes in fair value are recorded through operating expenses.

The fair value of our debt is based on borrowing rates currently required of loans with similar terms, maturity and credit risk.

The carrying amount of our debt approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk.

The fair value of our debt is classified as a Level 2 liability in the fair value hierarchy.

The fair value of contingent consideration obligations, such as the earn-out associated with our acquisition of UniRush LLC ("UniRush") in 2017, was estimated through valuation models designed to estimate the probability of such contingent payments based on various assumptions.

Estimated payments were discounted using present value techniques to arrive at an estimated fair value.

Our contingent consideration payable was classified as Level 3 because we used unobservable inputs to estimate fair value, including the probability of achieving certain earnings thresholds and appropriate discount rates.

Changes in fair value of contingent consideration were recorded through operating expenses.

The fair value of our revolving line of credit is based on borrowing rates currently available to a market participant for loans with similar terms or maturity.

The carrying amount of our revolving line of credit approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk.

The fair value of our revolving line of credit is classified as a Level 2 liability in the fair value hierarchy.

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Fair Value of Financial Instruments (continued)

December 31, 2022 December 31, 2021

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Deposits $ 3,450,105 $ 3,450,017 $ 3,286,889 $ 3,286,837

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 18— Concentrations of Credit Risk

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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.

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

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

for the duration of our remaining lease terms.

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

Our 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 $ 4.4 million, $ 3.9 million, and $ 9.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 20—Leases (continued)

Supplemental Information

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

Additional Information

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

Year Ended December 31,

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Weighted average discount rate 4.9 % 4.8 % 4.8 %

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 20—Leases (continued)

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

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(In thousands)

Thereafter 1,386

imputed interest ( 1,648 )

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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 from January 2020 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 December 31, 2021, the estimated fair value of our remaining earn-out payments amounted to $ 1.3 million.

In addition, through the normal course of business, we may enter into various agreements with our vendors and retail distributors that may subject us to minimum annual requirements.

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.

Litigation and Claims

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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.

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.

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

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

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

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 21—Commitments and Contingencies (continued)

the first lawsuit described above.

The suit does not define the purported class allegedly damaged.

These cases have been related.

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.

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

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

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

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

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

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

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

We are defending the action.

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

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 21—Commitments and Contingencies (continued)

Other Legal Matters

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

Note 22— Significant Concentrations

Note 22— Significant Retailer and Partner Concentration

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

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Walmart 21 % 24 % 27 %

In addition, approximately 30 %, 20 %, and 13 % of our total operating revenues for the years ended December 31, 2022, 2021 and 2020, respectively, were generated from a single BaaS partner, but without a corresponding concentration to our gross profit for the respective periods.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 22—Significant Concentrations (continued)

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

Note 23— Regulatory Requirements

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Total risk-based capital $ 336,461 41.6 % 8.0 % 10.0 %

In addition, Green Dot Bank is subject to regulatory restrictions that limit its ability to issue capital distributions, such as cash dividends, as it is required to maintain minimum levels of capital adequacy.

As of December 31, 2022, the aggregate amount of net assets we determined were restricted at our bank was approximately $ 116.7 million.

GREEN DOT CORPORATION

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Note 24— Segment Information

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

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

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.

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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 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 inter-segment revenues and expenses, and unallocated corporate expenses, which include our fixed expenses such as salaries, wages and related benefits for our employees, professional services 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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We do not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.

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

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

GREEN DOT CORPORATION

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Note 24—Segment Information (continued)

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

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

Year Ended December 31,

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Total segment revenues 1,423,609 1,387,875 1,200,520

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

BaaS commissions and processing expenses 28,831 45,322 53,240

Other income ( 2,874 ) — —

Total operating revenues $ 1,449,566 $ 1,433,197 $ 1,253,760

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.

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.

Year Ended December 31,

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Impairment charges 4,264 — 21,719

Legal settlement expenses 16,021 1,108 —

Other expense 8,070 12,956 11,906

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Interest expense, net 255 150 761

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

Other expense, net ( 10,199 ) ( 2,624 ) ( 1,217 )

Income before income taxes $ 83,921 $ 63,700 $ 28,095

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data