February 23, 2017
By John Stewart
Green Dot Corp.’s chief executive on Wednesday hailed the company’s pending acquisition of UniRush LLC and hinted the Pasadena, Calif.-based prepaid card specialist may be on the prowl for more such transactions. “We continue to keep our eyes open for new acquisition opportunities that meet our requirements,” said Steve Streit during a conference call to discuss Green Dot’s fourth-quarter and full-year 2016 results, according to a Seeking Alpha transcript.
Announced at the end of January, the deal will propel Green Dot into a major role in the payroll card business thanks to UniRush’s Rapid! Paycard product, used by more than 2,500 companies. Green Dot agreed to pay $147 million upfront for Cincinnati-based UniRush, with yearly earn-out payments of $4 million for five years.
“With the [UniRush] acquisition, Green Dot will now rank among the nation's largest mobile, online, and direct- mail providers of bank accounts, debit cards and related financial services, with RapidPay helping us to become the largest providers of pay cards and wage-disbursement solutions in the country,” Streit told stock analysts in summing up the company’s new position, according to the transcript.
Streit and chief financial officer Mark Shifke also addressed a few lingering questions about the deal, which is expected to close at the end of March. While the Consumer Financial Protection Bureau on Feb. 1 ordered UniRush and Mastercard Inc. to pay $10 million in restitution to cardholders and a $3 million civil fine in connection with an October 2015 processing glitch, Green Dot will not bear liability for UniRush’s share of the penalty, Shifke stressed. “We do not expect to be responsible for any financial obligations in respect of regulatory findings such as a recently announced CFPB settlement,” he said, according to the transcript.
Also, while UniRush has maintained its deposits at prepaid specialist MetaBank, a unit of Meta Financial Group Inc., Streit said those deposits won’t likely be shifted to Green Dot’s own financial institution, Green Dot Bank, any time soon. “MetaBank is a good partner, we know the folks well, we all sort of know each other in the industry, and if they have a reason why they want to keep the deposits and it makes sense for us to do that…we're not against that,” he told the analysts, according to the transcript. “Ultimately, in theory, everything would be on the Green Dot stack, but not in the first year for the bank. We'll probably keep that for a little later.”
Green Dot finished the fourth quarter with 4.13 million active cards, up from 4.09 million in the third quarter but down from 4.5 million in the year-earlier period. Its gross dollar volume was $5.68 billion for the quarter, up 4% from $5.44 billion in the same quarter of 2015.
The company finished 2016 with $718.8 million in total operating revenue, up 3.5% over its 2015 revenue total. Net income for the year came in at $41.6 million, up 8% from $38.4 million in 2015.
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