Green Dot 2015 Annual Report Download - page 48

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42
Income Tax Expense
The following table presents a breakdown of our effective tax rate among federal, state and other:
Year Ended December 31,
2014 2013
U.S. federal statutory tax rate 35.0%35.0%
State income taxes, net of federal benefit 1.1 (0.2)
General business credits (1.3) (2.3)
Employee stock-based compensation 0.7 1.4
Transaction costs 1.8 —
Other 0.7 1.2
Effective tax rate 38.0%35.1%
Our income tax expense increased by $7.8 million to $26.2 million in the year ended December 31, 2014 from the
comparable period in 2013 due to an increase in income before income taxes and an increase in our effective tax rate
by 2.9 percentage points from 35.1% to 38.0%. The increase in the effective tax rate for the year ended December
31, 2014 as compared to the year ended December 31, 2013 is primarily attributable to certain non-deductible
transaction costs incurred during the year and fewer general business credits. We recognized a discrete benefit in the
first quarter of 2013 related to the reinstatement of 2012 general business credits.
Capital Management
As of December 31, 2015 and 2014, we were categorized as "well capitalized" under the regulatory framework.
There were no conditions or events since December 31, 2015 which management believes would have changed our
category as "well capitalized." Our capital ratios and related regulatory requirements were as follows:
December 31, 2015
Amount Ratio Regulatory
Minimum (1) "Well-capitalized"
Minimum (1)
(In thousands, except ratios)
Green Dot Corporation:
Tier 1 leverage 347,801 25.9% 4.0% n/a
Common equity Tier 1 capital 347,801 70.7% 4.5% n/a
Tier 1 capital 347,801 70.7% 6.0% 6.0%
Total risk-based capital 349,396 71.1% 8.0% 10.0%
Green Dot Bank:
Tier 1 leverage 152,737 20.4%15.0%15.0%
Common equity Tier 1 capital 152,737 132.2% 4.5% 6.5%
Tier 1 capital 152,737 132.2% 6.0% 8.0%
Total risk-based capital 153,164 132.5% 8.0% 10.0%
December 31, 2014
Amount Ratio Regulatory
Minimum (1) "Well-capitalized"
Minimum (1)
(In thousands, except ratios)
Green Dot Corporation:
Tier 1 leverage 200,917 21.3% 4.0% n/a
Tier 1 capital 200,917 45.4% 5.5% 6.0%
Total risk-based capital 201,368 45.5% 8.0% 10.0%
Green Dot Bank:
Tier 1 leverage 135,786 17.9%15.0%15.0%
Tier 1 capital 135,786 70.6% 5.5% 6.0%
Total risk-based capital 136,237 70.8% 8.0% 10.0%
(1) The tier 1 leverage regulatory minimum and well-capitalized minimum ratios for banks is 4% and 5%, respectively. Our subsidiary bank is
subject to separate tier 1 leverage requirements that we have committed to with the Federal Reserve Board and Utah Department of
Financial Institutions.