Green Dot Starts to Realize the Fruits of Its New CEO’s Insistence on Keeping Its Bank

Green Dot Corp. may be starting to show the fruits of new chief executive Dan Henry’s insistence on holding on tightly to the company’s bank and making it a linchpin of his strategy. The Provo, Utah-based institution, which Green Dot acquired in 2010, is key to three major card and banking programs launched in recent weeks with fintechs Intuit Inc., Kabbage Inc., and Wealthfront Corp. And long-time client Walmart Inc. is talking to the company “about what we can do beyond the card,” Henry told equity analysts Tuesday afternoon, referring to the Walmart MoneyCard, launched in 2006 and issued by Green Dot Bank.

The new initiatives build on and expand a banking-as-a-service (BaaS) strategy Green Dot launched formally five years ago and that also includes major clients like Apple Inc. “With BaaS partnerships, we are uniquely positioned as we own the bank,” Henry said, underscoring his firm rebuff in the last quarterly earnings call in May of suggestions that Green Dot sell its bank.

But Henry, who took over in March after a year that saw Green Dot’s stock plummet from $83 to the low $20s, has also been busy engineering what he called Tuesday a “complete rebuild of leadership” at the Pasadena, Calif.-based company. His new lieutenants include former H&R Block and GE Capital executive Greg Quarles, who arrived in May to run Green Dot Bank after a two-year stint as chief executive of American State Bancshares, and Brandon Thompson, a former NetSpend and Euronet executive who came to Green Dot in June as an executive vice president. Henry, who worked at Euronet for 12 years, overlapped with Thompson for four years at Netspend while he, Henry, was CEO at the prepaid card specialist. NetSpend is now part of Global Payments Inc.

These hires came after the addition in May of Daniel Eckert, who left Walmart in March after running the retail giant’s digital services for 10 years. The re-energized BaaS business will be a key responsibility for Eckert, Henry made clear earlier.

So far, Wall Street likes what Henry is doing. Green Dot’s shares closed Tuesday at $53.70, up $1.62 on the day, and very near the one-year high.

For the June quarter, Green Dot posted $15.1 billion in gross dollar volume, up 50% year-over-year, partly on the strength of federal stimulus programs that used processors like Green Dot to help distribute aid to people and businesses impacted by Covid-19. Active accounts at quarter end were 6.25 million, up 10%. Purchase volume totaled $8.48 billion, up 31%.

Revenue totaled $316.2 million, up 14% from the same period last year.