Green Dot 2011 Annual Report Download - page 65

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Organization
Green Dot Corporation (“we,” “us” and “our” refer to Green Dot Corporation and its wholly-owned subsidiaries,
Next Estate Communications, Inc., Green Dot Bancorp (formerly Bonneville Bancorp) and Green Dot Bank (formerly
Bonneville Bank) is a leading provider of general purpose reloadable, or GPR, prepaid debit cards and cash loading
and transfer services in the United States. Our products include Green Dot MasterCard and Visa-branded prepaid
debit cards and several co-branded reloadable prepaid card programs, collectively referred to as our GPR cards; Visa-
branded gift cards; and our MoneyPak and swipe reload proprietary products, collectively referred to as our cash
transfer products, which enable cash loading and transfer services through our Green Dot Network. The Green Dot
Network enables consumers to use cash to reload our prepaid debit cards or to transfer cash to any of our Green Dot
Network acceptance members, including competing prepaid card programs and other online accounts.
We market our cards and financial services to banked, underbanked and unbanked consumers in the United States
using distribution channels other than traditional bank branches, such as third-party retailer locations nationwide and
the Internet. Our prepaid debit cards are issued by Green Dot Bank and third-party issuing banks including GE Capital
Retail Bank (formerly GE Money Bank) and Columbus Bank and Trust Company, a division of Synovus Bank. We also
have multi-year distribution arrangements with many large and medium-sized retailers, such as Walmart, Walgreens,
CVS, Rite Aid, 7-Eleven, Kroger, Kmart, Meijer and Radio Shack, and with various industry resellers, such as Blackhawk
Network, Inc. and Incomm. We refer to participating retailers collectively as our “retail distributors.”
Initial Public Offering
On July 27, 2010, we completed an initial public offering of 5,241,758 shares of our Class A common stock at an
initial public offering price of $36.00 per share, all of which were sold by existing stockholders. We did not receive any
proceeds from the sale of shares of our Class A common stock in the offering. Concurrent with the completion of the
initial public offering, certain selling stockholders exercised a warrant to purchase 283,786 shares of Series C-1
preferred stock at an exercise price of $1.41 per share and vested options to purchase 377,840 shares of Class B
common stock with a weighted-average exercise price of $2.63 in order to sell the underlying shares of Class A common
stock in the offering. We received aggregate proceeds of $1.4 million from these exercises. Additionally, all of our
outstanding shares of convertible preferred stock were automatically converted to 24,941,421 shares of our Class B
common stock, and all shares of our Class B common stock sold in the offering were automatically converted into a
like number of Class A common stock.
Bonneville Bank
On February 4, 2010, we entered into a definitive agreement to acquire 100% of the outstanding common shares
and voting interest of Bonneville Bancorp for approximately $15.7 million in cash, subject to approval by various
regulatory authorities. Bonneville Bancorp, a Utah bank holding company, offered a range of business and consumer
banking products in the Provo, Utah area through its bank subsidiary, Bonneville Bank, or the Bank. The Bank also
originates commercial, industrial, residential, real estate and personal loans. We expect to focus the Bank on issuing
our Green Dot-branded debit cards linked to an FDIC-insured transactional account.
On November 23, 2011, the Board of Governors of the Federal Reserve System and Utah Department of Financial
Institutions approved our applications to acquire Bonneville Bancorp and thereby we became a bank holding company
under the Bank Holding Company Act of 1956. On December 8, 2011, we completed our acquisition of Bonneville
Bancorp. The Bank's official name changed to Green Dot Bank, but the Bank will continue to do business and serve
its customer base under the name Bonneville Bank at its current Provo, Utah location. We contributed $14.3 million
in cash to the Bank in December 2011 to provide an initial capital base for its expanded operations.
Note 2—Summary of Significant Accounting Policies
Basis of Presentation
We have prepared the accompanying consolidated financial statements in conformity with U.S. generally accepted
accounting principles, or GAAP. We have eliminated all significant intercompany balances and transactions in
consolidation. Our consolidated financial statements include the results of entities that we control through a 50% or
more ownership interest. Beginning December 8, 2011, our consolidated financial and operating results and cash
flows reflect the operations of Green Dot Bank.
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