Green Dot 2013 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 of the 2013 Green Dot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
81
Note 13—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.
As of December 31, 2013 and December 31, 2012, our assets carried at fair value on a recurring basis were as
follows:
Level 1 Level 2 Level 3 Total Fair Value
December 31, 2013 (In thousands)
Corporate bonds $—$70,997 $—$70,997
Commercial paper — 49,321 — 49,321
Negotiable certificate of deposit — 4,403 — 4,403
U.S. Treasury notes — 14,278 — 14,278
Agency securities — 14,959 — 14,959
Mortgage-backed securities — 4,001 — 4,001
Municipal bonds — 19,031 — 19,031
Asset-backed securities — 21,754 — 21,754
Total $—$ 198,744 $ —$198,744
December 31, 2012
Corporate bonds $ —$37,357 $—$37,357
Commercial paper — 55,748 — 55,748
Negotiable certificate of deposit — 4,414 — 4,414
U.S. treasury notes — 22,267 — 22,267
Agency securities — 25,867 — 25,867
Municipal bonds — 11,568 — 11,568
Asset-backed securities — 26,566 — 26,566
Total $ —$ 183,787 $ —$183,787
We based the fair value of our fixed income securities held as of December 31, 2013 and December 31, 2012 on
quoted prices in active markets for similar assets. We had no transfers between Level 1, Level 2 or Level 3 assets
during the years ended December 31, 2013 or 2012.
Note 14—Fair Value of Financial Instruments
The following describes the valuation technique for determining the fair value of financial instruments, whether or
not such instruments are carried at fair value on our consolidated balance sheets.
Short-term Financial Instruments
Our short-term financial instruments consist principally of unrestricted and restricted cash and cash equivalents,
federal funds sold, settlement assets and obligations, and obligations to customers. These financial instruments are
short-term in nature, and, accordingly, we believe their carrying amounts approximate their fair values. Under the fair
value hierarchy, these instruments are classified as Level 1.
Investment Securities
The fair values of investment securities have been derived using methodologies referenced in Note 2–Summary
of Significant Accounting Policies. Under the fair value hierarchy, our investment securities are classified as Level 2.
Loans
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.