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Table of Contents
NetSpend Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2008, 2009 and 2010
NOTE 7: INVESTMENTS
During the year ended December 31, 2010, the Company purchased 150,000 shares of the common stock of Meta Financial Group, the
holding Company of MetaBank, one of the Company's issuing banks, for the purchase price of $3.2 million. The investment in Meta is an
available-for-sale security and is included in the Consolidated Balance Sheets as a long-term investment. As of December 31, 2010, the
Company's long-term investment is stated at fair value using its quoted price on the NASDAQ stock market. As of December 31, 2010, the fair
value of the Company's investment in Meta was $2.1 million, which is $1.1 million, or 35.6%, below the initial purchase price. The fair value
of the investment declined significantly below its initial purchase price in October 2010 when Meta publicly disclosed a supervisory directive
issued by the Office of Thrift Supervision ("OTS"), which required MetaBank to discontinue offering certain of its products, including its
iAdvance product and requiring MetaBank to obtain prior written approval to, among other things, enter into any new third party agreements
concerning any credit or deposit (including prepaid access), or materially amend any such existing agreements or publicly announce any new
third party relationship agreements or material amendments to existing agreements.
The OTS has not issued its final report or orders to MetaBank and the Meta stock price continues to improve from a low price point after
the supervisory directive. As the full extent of the impact of the OTS final report on Metabank's earnings and subsequent market response is
currently unknown, the Company has not assessed that the decline in MetaBank's share price is other-than-temporary. The Company has
recorded the related unrealized losses in accumulated other comprehensive losses in the Consolidated Balance Sheets and will continue to
assess the investment's impairment on a quarterly basis to determine whether any changes in facts or circumstances indicate that the
impairment is other-than-
temporary in nature. If the Company determines that the impairment is no longer temporary, the Company will realize
the current unrealized losses in its Consolidated Statement of Operations.
NOTE 8: ACCRUED EXPENSES
Accrued expenses at December 31, 2009 and 2010 consisted of the following:
81
December 31,
2009 2010
(in thousands of dollars)
Commissions payable to distributors
$
4,972
$
4,986
Accrued wages and related personnel
expenses
5,819
8,541
Other accrued liabilities
10,740
11,540
$
21,531
$
25,067