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Item 1. Financial Statements

2024-05-10 compared with 2023-11-09 · 165 added, 249 removed, 579 unchanged (42% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Assets (In thousands, except par value)

8 unchanged sentences

Investment securities available-for-sale, at fair value 2,118,855 2,203,142

Loans to bank customers, net of allowance for loan losses of $ 15,552 and $ 9,078 as of September 30, 2023 and December 31, 2022, respectively

Loans to bank customers, net of allowance for credit losses of $ 10,376 and $ 11,383 as of March 31, 2024 and December 31, 2023, respectively

39,629 30,534

16 unchanged sentences

Deferred revenue 5,628 6,343

Line of credit 45,000 61,000

Income tax payable 8,509 6,262

2 unchanged sentences

Operating lease liabilities 1,821 2,687

Line of credit 27,000 35,000

Total liabilities 4,450,378 3,957,772

2 unchanged sentences

Class A common stock, $ 0.001 par value;

100,000 shares authorized as of September 30, 2023 and December 31, 2022;

52,415 and 51,674 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

100,000 shares authorized as of March 31, 2024 and December 31, 2023;

53,158 and 52,816 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 383,205 375,980

6 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

(In thousands, except per share data)

11 unchanged sentences

Total operating expenses 441,434 365,385

Operating (loss) income ( 6,839 ) 10,765 48,942 86,296

Operating income 10,554 50,995

Interest expense, net 1,457 1,644

Other expense, net ( 1,810 ) ( 3,024 )

(Loss) income before income taxes ( 7,880 ) 6,489 40,771 77,096

Income tax (benefit) expense ( 1,615 ) 1,793 10,446 18,768

Net (loss) income $ ( 6,265 ) $ 4,696 $ 30,325 $ 58,328

Basic (loss) earnings per common share:

Income before income taxes 7,287 46,327

Income tax expense 2,537 10,315

Net income $ 4,750 $ 36,012

Basic earnings per common share:

$ 0.09 $ 0.70

Diluted (loss) earnings per common share $ ( 0.12 ) $ 0.09 $ 0.58 $ 1.07

Diluted earnings per common share $ 0.09 $ 0.69

Basic weighted-average common shares issued and outstanding:

4 unchanged sentences

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(In thousands)

Net (loss) income $ ( 6,265 ) $ 4,696 $ 30,325 $ 58,328

Other comprehensive loss

Unrealized holding loss, net of tax ( 47,263 ) ( 112,269 ) ( 44,332 ) ( 304,848 )

Comprehensive loss $ ( 53,528 ) $ ( 107,573 ) $ ( 14,007 ) $ ( 246,520 )

See notes to unaudited consolidated financial statements

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Three Months Ended September 30, 2023

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

Shares Amount

(In thousands)

Balance at June 30, 2023 52,341 $ 52 $ 360,812 $ 800,172 $ ( 319,797 ) $ 841,239

Common stock issued under stock plans, net of withholdings and related tax effects 74 — ( 524 ) — — ( 524 )

Stock-based compensation — — 7,934 — — 7,934

Net loss — — — ( 6,265 ) — ( 6,265 )

Other comprehensive loss — — — — ( 47,263 ) ( 47,263 )

Balance at September 30, 2023 52,415 $ 52 $ 368,222 $ 793,907 $ ( 367,060 ) $ 795,121

Three Months Ended September 30, 2022

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

Shares Amount

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

(In thousands)

Balance at June 30, 2022 53,740 $ 54 $ 376,902 $ 753,002 $ ( 222,386 ) $ 907,572

Common stock issued under stock plans, net of withholdings and related tax effects 71 — ( 655 ) — — ( 655 )

Stock-based compensation — — 10,806 — — 10,806

Repurchases of Class A Common Stock ( 1,309 ) ( 1 ) ( 30,003 ) — — ( 30,004 )

Net income $ 4,750 $ 36,012

Other comprehensive loss — — — — ( 112,269 ) ( 112,269 )

Balance at September 30, 2022 52,502 $ 53 $ 357,050 $ 757,698 $ ( 334,655 ) $ 780,146

Other comprehensive income and loss

Unrealized holding (loss) income, net of tax ( 679 ) 36,297

Comprehensive income $ 4,071 $ 72,309

See notes to unaudited consolidated financial statements

GREEN DOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

Nine Months Ended September 30, 2023

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Three Months Ended March 31, 2024

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

6 unchanged sentences

Other comprehensive loss — — — — ( 679 ) ( 679 )

Balance at September 30, 2023 52,415 $ 52 $ 368,222 $ 793,907 $ ( 367,060 ) $ 795,121

Nine Months Ended September 30, 2022

Balance at March 31, 2024 53,158 $ 53 $ 383,205 $ 775,054 $ ( 287,666 ) $ 870,646

Three Months Ended March 31, 2023

Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

4 unchanged sentences

Stock-based compensation — — 9,182 — — 9,182

Repurchases of Class A Common Stock ( 2,935 ) ( 3 ) ( 74,047 ) — — ( 74,050 )

Net income — — — 36,012 — 36,012

Other comprehensive loss — — — — ( 304,848 ) ( 304,848 )

Balance at September 30, 2022 52,502 $ 53 $ 357,050 $ 757,698 $ ( 334,655 ) $ 780,146

Other comprehensive income — — — — 36,297 36,297

Balance at March 31, 2023 51,994 $ 52 $ 347,385 $ 799,594 $ ( 286,431 ) $ 860,600

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

21 unchanged sentences

Investing activities

Purchases of available-for-sale investment securities — ( 922,039 )

Proceeds from maturities of available-for-sale securities 45,776 37,070

Proceeds from sales and calls of available-for-sale securities 95 55

Payments for acquisition of property and equipment ( 55,501 ) ( 60,605 )

Net changes in loans ( 21,562 ) ( 25,158 )

Payments for property, equipment and internal-use software ( 14,495 ) ( 19,533 )

Net changes in loans and advances ( 39,939 ) ( 15,069 )

Investment in TailFin Labs, LLC ( 35,000 ) ( 35,000 )

Purchases of other investments — ( 31,934 )

Proceeds from other investments 39,118 —

Other investing activities ( 81 ) ( 243 )

Net cash provided by (used in) investing activities 18,420 ( 828,108 )

Net cash used in investing activities ( 4,526 ) ( 32,720 )

Financing activities

5 unchanged sentences

Net changes in settlement assets and obligations to customers ( 86,684 ) ( 19,864 )

Contingent consideration payments — ( 1,647 )

Repurchase of Class A common stock — ( 74,050 )

Net cash (used in) provided by financing activities ( 255,278 ) 69,459

Net decrease in unrestricted cash, cash equivalents and restricted cash ( 104,410 ) ( 506,568 )

Net cash provided by (used in) financing activities 347,877 ( 161,648 )

Net increase (decrease) in unrestricted cash, cash equivalents and restricted cash 432,528 ( 93,836 )

Unrestricted cash, cash equivalents and restricted cash, beginning of period 686,502 819,845

20 unchanged sentences

Reference is made to our Annual Report on Form 10-K for the year ended December 31, 2023 for additional disclosures, including a summary of our significant accounting policies.

There have been no material changes to our significant accounting policies during the nine months ended September 30, 2023.

There have been no material changes to our significant accounting policies during the three months ended March 31, 2024.

In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal and recurring items, necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods presented.

2 unchanged sentences

accordingly, accounting estimates require the exercise of judgment.

These financial statements were prepared using information reasonably available as of September 30, 2023 and through the date of this report.

These financial statements were prepared using information reasonably available as of March 31, 2024 and through the date of this report.

The accounting estimates used in the preparation of our consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes.

1 unchanged sentence

"Risk Factors" in this report.

Recent Accounting Pronouncements

In November 2023, the Financial Standards Accounting Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3— Revenues

2 unchanged sentences

Our products and services are offered to customers within the United States and certain U.S.

The following table disaggregates our revenues earned from external customers by each of our reportable segments:

Three Months Ended September 30, 2023

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

Transferred point in time $ 76,722 $ 35,383 $ 31,196 $ 143,301

Transferred over time 38,363 162,074 893 201,330

Operating revenues (1)

$ 115,085 $ 197,457 $ 32,089 $ 344,631

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3—Revenues (continued)

Three Months Ended September 30, 2022

Consumer Services B2B Services Money Movement Services Total

Timing of recognition (In thousands)

Transferred point in time $ 86,888 $ 42,179 $ 36,890 $ 165,957

Transferred over time 45,154 120,410 781 166,345

Operating revenues (1)

$ 132,042 $ 162,589 $ 37,671 $ 332,302

Nine Months Ended September 30, 2023

The following tables disaggregate our revenues earned from external customers by each of our reportable segments:

Three Months Ended March 31, 2024

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

$ 98,007 $ 234,441 $ 106,829 $ 439,277

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Consumer Services B2B Services Money Movement Services Total

6 unchanged sentences

Also excludes the effects of inter-segment revenues.

Revenues recognized at a point in time are comprised of interchange fees, ATM fees, overdraft protection fees, other similar cardholder transaction-based fees, and substantially all of our cash processing revenues.

Revenues recognized over time consists of new card fees, monthly maintenance fees, revenue earned from gift cards and substantially all BaaS (as defined herein) partner program management fees.

Revenues recognized at a point in time are comprised of interchange fees, ATM fees, overdraft protection fees, other similar accountholder transaction-based fees, and substantially all of our cash processing revenues.

Revenues recognized over time consists of new card fees, monthly maintenance fees, revenue earned from gift cards and substantially all BaaS (as defined herein) partner program management service fees.

As presented on our consolidated balance sheets, we record deferred revenue for any upfront payments received in advance of our performance obligations being satisfied.

These contract liabilities consist principally of unearned new card fees and monthly maintenance fees.

We recognized approximately $ 0.7 million and $ 0.3 million in revenue for the three months ended September 30, 2023 and 2022, respectively, and $ 22.6 million and $ 25.8 million for the nine months ended September 30, 2023 and 2022, respectively, that were included in deferred revenue at the beginning of the periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods.

Substantially all of the deferred revenue balances at the beginning of the periods are recognized in the first half of each year.

We recognized approximately $ 2.9 million and $ 14.4 million in revenue for the three months ended March 31, 2024 and 2023, respectively, that were included in deferred revenue at the beginning of the periods and did not recognize any revenue during these periods from performance obligations satisfied in previous periods.

Substantially all of the deferred revenue balances at the beginning of the respective periods are recognized in the first half of each year.

Changes in the deferred revenue balance are driven primarily by the amount of new card fees recognized during the period, and the degree to which these reductions to the deferred revenue balance are offset by the deferral of new card fees associated with cards sold during the period.

During the three months ended September 30, 2023, we recorded an increase in revenue from our gift card program, a component of “Card revenues and other fees” on our Consolidated Statements of Operations.

The change was the result of an update in our estimated breakage rates to better reflect current customer spending patterns on remaining gift card portfolios.

This change amounted to approximately $ 10 million during the three months ended September 30, 2023.

The impact of this change on our card revenues and other fees is not material to future periods.

GREEN DOT CORPORATION

4 unchanged sentences

(In thousands)

September 30, 2023

March 31, 2024

Corporate bonds $ 10,000 $ — $ ( 333 ) $ 9,667

9 unchanged sentences

Total investment securities $ 2,617,266 $ — $ ( 380,265 ) $ 2,237,001

As of September 30, 2023 and December 31, 2022, the gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows:

As of March 31, 2024 and December 31, 2023, the gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows:

Less than 12 months 12 months or more Total fair value Total unrealized loss

1 unchanged sentence

(In thousands)

September 30, 2023

March 31, 2024

Corporate bonds $ — $ — $ 9,667 $ ( 333 ) $ 9,667 $ ( 333 )

11 unchanged sentences

federal government, as our investment policy restricts our investments to highly liquid, low credit risk assets.

As such, we have not recorded any significant credit-related impairment losses during the three and nine months ended September 30, 2023 or 2022 on our available-for-sale investment securities.

Unrealized losses as of September 30, 2023 and December 31, 2022 are the result of increases in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

Substantially all of the underlying securities within our investment portfolio were in an unrealized loss position as of September 30, 2023 and December 31, 2022 due to the timing of our investment purchases, as a significant portion of our investments were purchased prior to recent increases in interest rates by the Federal Reserve, and general volatility in market conditions.

As such, we have not recorded any credit-related impairment losses during the three months ended March 31, 2024 or 2023 on our available-for-sale investment securities.

Unrealized losses as of March 31, 2024 and December 31, 2023 are the result of increases in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

All of the underlying securities within our investment portfolio were in an unrealized loss position as of March 31, 2024 and December 31, 2023 due to the timing of our investment purchases, as a significant portion of our investments were purchased prior to increases in interest rates by the Federal Reserve, and general volatility in market conditions.

We do not currently intend to sell our investments, and we have determined that it is more likely than not that we will not be required to sell our investments before recovery of their amortized cost bases, which may be at maturity.

2 unchanged sentences

Note 4—Investment Securities (continued)

As of September 30, 2023, the contractual maturities of our available-for-sale investment securities were as follows:

As of March 31, 2024, the contractual maturities of our available-for-sale investment securities were as follows:

Amortized cost Fair value

9 unchanged sentences

Accounts receivable, net consisted of the following:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(In thousands)

2 unchanged sentences

Net trade receivables 36,132 29,677

Overdrawn cardholder balances from purchase transactions 7,621 3,821

Overdrawn accountholder balances from purchase transactions

Reserve for uncollectible overdrawn accounts from purchase transactions ( 4,143 ) ( 5,281 )

Net overdrawn cardholder balances from purchase transactions 5,463 1,591

Cardholder fees 2,307 2,480

Net overdrawn accountholder balances from purchase transactions

Accountholder fees

Receivables due from card issuing banks 1,885 1,768

3 unchanged sentences

Activity in the reserve for uncollectible overdrawn accounts from purchase transactions consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

(In thousands)

9 unchanged sentences

(In thousands)

September 30, 2023

March 31, 2024

Residential $ — $ — $ — $ — $ 5,763 $ 5,763

13 unchanged sentences

Percentage of outstanding 6.8 % 1.9 % 6.1 % 14.8 % 85.2 % 100.0 %

We offer an optional overdraft protection program service on certain demand deposit account programs that allows customers who opt-in and meet certain criteria to spend up to a pre-authorized amount in excess of their available balance.

When overdrawn, the purchase related balances due on these deposit accounts are reclassified as consumer loans.

Fees due from our cardholders for our overdraft service are included as a component of accounts receivable.

Fees due from our accountholders for our overdraft service are included as a component of accounts receivable.

Overdrawn balances are unsecured and considered immediately due from the customer.

2 unchanged sentences

Changes in valuation allowances are recorded as a component of other income and expenses on our consolidated statement of operations.

As of September 30, 2023 and December 31, 2022, the fair value of the loans held for sale amounted to approximately $ 4.9 million and $ 5.3 million, respectively.

As of March 31, 2024 and December 31, 2023, the fair value of the loans held for sale amounted to approximately $ 4.4 million and $ 4.7 million, respectively.

Nonperforming Loans

1 unchanged sentence

See Note 2 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2023 for further information on the criteria for classification as nonperforming.

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(In thousands)

12 unchanged sentences

Secured credit card loans are considered classified if they are greater than 90 days past due.

However, our secured credit card portfolio is collateralized by cash deposits made by each cardholder in an amount equal to the user's available credit limit, which mitigates the risk of any significant credit losses we expect to incur.

However, our secured credit card portfolio is collateralized by cash deposits made by each accountholder in an amount equal to the user's available credit limit, which mitigates the risk of any significant credit losses we expect to incur.

The table below presents the carrying value, gross of the related allowance for credit losses, of our loans within the primary credit quality indicators related to our loan portfolio:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Non-Classified Classified Non-Classified Classified

8 unchanged sentences

Activity in the allowance for credit losses on our loan portfolio consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

(In thousands)

8 unchanged sentences

We hold a 20 % ownership interest in the entity, in exchange for annual capital contributions of $ 35.0 million per year from January 2020 through January 2024.

Our final payment under this commitment was made in January 2024.

We account for our investment in TailFin Labs under the equity method of accounting in accordance with ASC 323 , Investments – Equity Method and Joint Ventures .

7 unchanged sentences

Any future economic benefits derived from products or services developed by TailFin Labs will be negotiated on a case-by-case basis between the parties.

As of September 30, 2023 and December 31, 2022, our net investment in TailFin Labs amounted to approximately $ 109.4 million and $ 82.4 million, respectively, and is included in the long-term portion of prepaid expenses and other assets on our consolidated balance sheets.

We recorded equity in losses from TailFin Labs of $ 0.8 million and $ 3.2 million for the three months ended September 30, 2023 and 2022, respectively, and $ 8.0 million and $ 10.3 million for the nine months ended September 30, 2023 and 2022, respectively.

As of March 31, 2024 and December 31, 2023, our net investment in TailFin Labs amounted to approximately $ 141.3 million and $ 109.5 million, respectively, and is included in the long-term portion of prepaid expenses and other assets on our consolidated balance sheets.

We recorded equity in losses from TailFin Labs of $ 3.1 million and $ 4.1 million for the three months ended March 31, 2024 and 2023, respectively.

These amounts are recorded as a component of other income and expense on our consolidated statements of operations.

Our equity method investments also include an investment held by our bank, which amounted to $ 3.5 million and $ 4.8 million at September 30, 2023 and December 31, 2022, respectively.

Equity in earnings from this investment for the three and nine months ended September 30, 2023 and 2022 were de minimis.

Our equity method investments also include an investment held by our bank, which amounted to $ 3.3 million and $ 3.5 million at March 31, 2024 and December 31, 2023, respectively.

Equity in earnings from this investment for the three months ended March 31, 2024 and 2023 were not significant.

Note 8— Deposits

Deposits are categorized as non-interest bearing or interest-bearing deposit accounts as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(In thousands)

9 unchanged sentences

The scheduled contractual maturities for total time deposits are presented in the table below:

September 30, 2023

March 31, 2024

(In thousands)

11 unchanged sentences

We use the proceeds of any borrowings under the 2019 Revolving Facility for working capital and other general corporate purposes, subject to the terms and conditions set forth in the credit agreement.

We classify amounts outstanding as long-term on our consolidated balance sheets;

however, we may make voluntary repayments at any time prior to maturity.

As of September 30, 2023, the outstanding balance on the 2019 Revolving Facility was $ 27 million.

We classify amounts outstanding on our consolidated balance sheets based on the remaining duration of the credit facility, however, we may make voluntary repayments at any time prior to maturity.

As of March 31, 2024, the outstanding balance on the 2019 Revolving Facility was $ 45 million, with $ 55 million available for use.

In March 2023, we amended the terms of our agreement to replace LIBOR with the Secured Overnight Financing Rate ("SOFR").

1 unchanged sentence

The applicable margin for borrowings depends on our total leverage ratio and varies from 1.25 % to 2.00 % for SOFR Rate loans and 0.25 % to 1.00 % for Base Rate loans.

The interest rate on our outstanding balance as of September 30, 2023 was approximately 6.67 %.

The interest rate on our outstanding balance as of March 31, 2024 was approximately 6.93 %.

We also pay a commitment fee, which varies from 0.20 % to 0.35 % per annum on the actual daily unused portions of the 2019 Revolving Facility.

2 unchanged sentences

We must also maintain a minimum fixed charge coverage ratio and a maximum consolidated leverage ratio at the end of each fiscal quarter, as set forth in the credit agreement.

At September 30, 2023, we were in compliance with all such covenants.

At March 31, 2024, we were in compliance with all such covenants.

If an event of default shall occur and be continuing under the facility, the commitments may be terminated and the principal amounts outstanding under the 2019 Revolving Facility, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.

We incurred total cash interest expense during the three and nine months ended September 30, 2023 of approximately $ 0.2 million and $ 2.0 million, respectively.

We did not incur any interest expense during the three and nine months ended September 30, 2022.

We incurred total cash interest expense during the three months ended March 31, 2024 and 2023 of approximately $ 1.4 million and $ 1.6 million, respectively.

Note 10— Income Taxes

Income tax expense for the nine months ended September 30, 2023 and 2022 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

Income tax expense for the three months ended March 31, 2024 and 2023 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

The sources and tax effects of the differences are as follows:

Nine Months Ended September 30,

Three Months Ended March 31,

federal statutory tax rate 21.0 % 21.0 %

State income taxes, net of federal tax benefit ( 1.4 ) 0.8

Foreign tax rate differential ( 1.5 ) ( 0.5 )

General business credits ( 11.5 ) ( 3.4 )

Stock-based compensation 7.1 2.4

IRC 162(m) limitation ( 3.6 ) 1.6

Bank owned life insurance ( 1.5 ) ( 0.8 )

Stock-based compensation 22.7 3.7

Bank owned life insurance income ( 2.9 ) ( 1.6 )

Bank owned life insurance surrender 9.3 —

Nondeductible expenses 2.6 0.8

4 unchanged sentences

Note 10—Income Taxes (continued)

The effective tax rate for the nine months ended September 30, 2023 and 2022 differs from the statutory federal income tax rate of 21%, primarily due to state income taxes, net of federal tax benefits, general business credits, stock-based compensation, cash value growth in bank owned life insurance policies, and the Internal Revenue Code (the "IRC") 162(m) limitation on the deductibility of executive compensation.

The net increase in the effective tax rate for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 is primarily due to the impact of an increase of $ 0.3 million in state income taxes, net of federal benefits, and the impact of a $ 1.0 million increase in tax expense associated with shortfalls from stock-based compensation.

We recognized a discrete tax expense related to tax shortfalls from stock-based compensation of $ 2.9 million for the nine months ended September 30, 2023, compared to a $ 1.9 million discrete tax expense for the prior year comparable period.

These increases were partially offset by a decrease of $ 1.1 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation and the impact of general business credits.

The Inflation Reduction Act of 2022 (the "IRA") levies a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases.

To date, these tax law revisions have had no immediate effect and we do not expect that they will have a material impact on our results of operations in the future.

The effective tax rate for the three months ended March 31, 2024 and 2023 differs from the statutory federal income tax rate of 21%, primarily due to state income taxes, net of federal tax benefits, general business credits, stock-based compensation, cash surrender value growth in bank owned life insurance policies, and the Internal Revenue Code (the "IRC") 162(m) limitation on the deductibility of executive compensation.

The net increase in the effective tax rate for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 is primarily due to the impact of a $ 0.2 million increase in tax expense associated with shortfalls from stock-based compensation and the initiated surrender of a portion of our existing bank owned life insurance policies which resulted in a tax charge of $ 0.5 million and a surrender penalty of $ 0.2 million.

We recognized a discrete tax expense related to tax shortfalls from stock-based compensation of $ 1.5 million for the three months ended March 31, 2024, compared to a $ 1.3 million discrete tax expense for the prior year comparable period.

These increases were partially offset by a decrease of $ 1.0 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a decrease of $ 0.5 million in state income taxes, net of federal benefits, and the impact of general business credits.

We have made a policy election to account for Global Intangible Low-Taxed Income ("GILTI") in the year the GILTI tax is incurred.

For the nine months ended September 30, 2023 and 2022, the provision for GILTI tax expense was not material to our financial statements.

For the three months ended March 31, 2024 and 2023, the provision for GILTI tax expense was not material to our financial statements.

We establish a valuation allowance when we consider it more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

As of September 30, 2023 and 2022, we did no t have a valuation allowance on any of our deferred tax assets as we believe it is more-likely-than-not that we will realize the benefits of our deferred tax assets.

As of March 31, 2024 and 2023, we did no t have a valuation allowance on any of our deferred tax assets as we believe it is more-likely-than-not that we will realize the benefits of our deferred tax assets.

We are subject to examination by the Internal Revenue Service, or IRS, and various state tax authorities.

We remain subject to examination of our federal income tax return for the years ended December 31, 2017 through 2022.

We remain subject to examination of our federal income tax returns for the years ended December 31, 2017 through 2023.

We generally remain subject to examination of our various state income tax returns for a period of four to five years from the respective dates that the returns were filed.

The IRS initiated an examination of our 2017 U.S.

federal tax return during the second quarter ended June 30, 2020, and the examination remains ongoing as of September 30, 2023.

We do not expect the outcome of these examinations will have any material impact on our consolidated financial statements.

As of September 30, 2023, we have federal net operating loss carryforwards of approximately $ 15.2 million and state net operating loss carryforwards of approximately $ 102.3 million, which will be available to offset future income.

federal tax return during the second quarter ended June 30, 2020, and the examination remains ongoing as of March 31, 2024.

We do not expect that this examination will have a material impact on our consolidated financial statements.

As of March 31, 2024, we had federal net operating loss carryforwards of approximately $ 13.1 million and state net operating loss carryforwards of approximately $ 108.1 million, which will be available to offset future income.

If not used, the federal net operating losses will expire between 2029 and 2035.

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In addition, we have state business tax credits of approximately $ 21.2 million that can be carried forward indefinitely and other state business tax credits of approximately $ 0.6 million that will start to expire on December 31, 2024 and continue to expire through December 31, 2027.

As of September 30, 2023 and December 31, 2022, we had a liability of $ 12.6 million and $ 11.2 million, respectively, for unrecognized tax benefits related to various federal and state income tax matters excluding interest, penalties and related tax benefits.

As of March 31, 2024 and December 31, 2023, we had a liability of $ 13.5 million and $ 12.1 million, respectively, for unrecognized tax benefits related to various federal and state income tax matters excluding interest, penalties and related tax benefits.

The reconciliation of the beginning unrecognized tax benefits balance to the ending balance is as follows:

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Income Taxes (continued)

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

Beginning balance $ 12,109 $ 11,178

Increases related to positions taken during the current year 1,500 1,434

Increases related to positions taken during prior years 1,380 1,260

Decreases related to positions settled with tax authorities — ( 90 )

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The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate $ 12,980 $ 11,917

As of September 30, 2023 and 2022, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.3 million and $ 1.1 million, respectively.

As of March 31, 2024 and 2023, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.4 million and $ 1.0 million, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11— Stockholders' Equity

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In February 2022, our Board of Directors authorized a $ 100 million increase to our stock repurchase program.

As of September 30, 2023, we had an authorized $ 4.5 million remaining under our stock repurchase program for additional repurchases.

Accelerated Share Repurchases

In March 2022, we entered into an accelerated share repurchase arrangement ("ASR") with a financial institution for an up-front payment of $ 25 million.

Final settlement of the ASR was completed in April 2022.

The final number of shares received upon settlement for the ASR was determined based on the volume-weighted average price of our common stock over the term of the agreement less an agreed upon discount and subject to adjustments pursuant to the terms and conditions of the ASR.

Total shares repurchased under the ASR amounted to 914,037 shares at a volume-weighted average price of $ 27.35 .

Other Repurchases

In March 2022, we also entered into a repurchase plan under Rule 10b5-1 of the Exchange Act for $ 75 million that went into effect at the conclusion of the ASR.

The agreement allowed for $ 10 million of monthly share repurchases through December 31, 2022 until the contract amount was reached, unless otherwise terminated.

In December 2022, we early terminated the agreement just prior to completing the entire $ 75 million of repurchases.

We repurchased 3,150,181 shares at a volume-weighted average price of $ 22.39 under the 10b5-1 plan.

Walmart Restricted Shares

On January 2, 2020, we issued Walmart, in a private placement, 975,000 restricted shares of our Class A Common Stock.

The shares vested in equal monthly increments through December 1, 2022;

however, Walmart was entitled to voting rights and to participate in any dividends paid from the issuance date on the unvested balance.

As such, the total amount of restricted shares issued were included in our total Class A shares outstanding.

All shares issued to Walmart were fully vested as of December 31, 2022.

The estimated grant-date fair value of the restricted shares is recorded as a component of stock-based compensation expense over the related period we expect to benefit under the term of our relationship with Walmart.

As of March 31, 2024, we had an authorized $ 4.5 million remaining under our stock repurchase program for additional repurchases.

There were no repurchases during the three months ended March 31, 2024.

Note 12— Stock-Based Compensation

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We have reserved shares of our Class A common stock for issuance under these plans.

The total stock-based compensation expense recognized was $ 7.9 million and $ 10.8 million for the three months ended September 30, 2023 and 2022, respectively, and $ 27.7 million and $ 31.3 million for the nine months ended September 30, 2023 and 2022, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12—Stock-Based Compensation (continued)

The total stock-based compensation expense recognized was $ 8.6 million and $ 9.2 million for the three months ended March 31, 2024 and 2023, respectively.

Restricted Stock Units

Restricted stock unit activity for awards subject to only service conditions was as follows for the nine months ended September 30, 2023:

Restricted stock unit activity for awards subject to only service conditions was as follows for the three months ended March 31, 2024:

Shares Weighted-Average Grant-Date Fair Value

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Restricted stock units canceled ( 97 ) 25.93

Outstanding at September 30, 2023

Outstanding at March 31, 2024

3,379 $ 13.98

Performance-Based Restricted Stock Units

Performance-based restricted stock unit activity for the nine months ended September 30, 2023 was as follows:

Performance-based restricted stock unit activity for the three months ended March 31, 2024 was as follows:

Shares Weighted-Average Grant-Date Fair Value

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Performance restricted stock units granted 981 8.98

Performance restricted stock units vested ( 99 ) 35.82

Performance restricted stock units canceled ( 62 ) 28.52

Adjustment for completed performance periods 15 46.82

Outstanding at September 30, 2023

Outstanding at March 31, 2024

1,907 $ 15.55

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Stock Options

Total stock option activity for the nine months ended September 30, 2023 was as follows:

Total stock option activity for the three months ended March 31, 2024 was as follows:

Options Weighted-Average Exercise Price

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1,010 $ 23.78

Options exercised ( 8 ) 16.34

Options canceled ( 1 ) 24.25

Outstanding at September 30, 2023

Outstanding at March 31, 2024

1,009 $ 23.78

Exercisable at September 30, 2023

Exercisable at March 31, 2024

1,009 $ 23.78

We did not issue any stock option awards from our 2010 Equity Incentive Plan for the periods presented in these consolidated financial statements.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13— Earnings and Loss per Common Share

The calculation of basic and diluted (loss) earnings per share (EPS) was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Note 13— Earnings per Common Share

The calculation of basic and diluted earnings per share ("EPS") was as follows:

Three Months Ended March 31,

(In thousands, except per share data)

Basic earnings per Class A common share

Net (loss) income $ ( 6,265 ) $ 4,696 $ 30,325 $ 58,328

Amount attributable to unvested Walmart restricted shares — ( 10 ) — ( 204 )

Net (loss) income allocated to Class A common stockholders $ ( 6,265 ) $ 4,686 $ 30,325 $ 58,124

$ 4,750 $ 36,012

Weighted-average Class A shares issued and outstanding 52,942 51,813

Basic (loss) earnings per Class A common share $ ( 0.12 ) $ 0.09 $ 0.58 $ 1.08

Basic earnings per Class A common share $ 0.09 $ 0.70

Diluted earnings per Class A common share

Net (loss) income allocated to Class A common stockholders $ ( 6,265 ) $ 4,686 $ 30,325 $ 58,124

Re-allocated earnings — — — 2

Diluted net (loss) income allocated to Class A common stockholders $ ( 6,265 ) $ 4,686 $ 30,325 $ 58,126

Net income allocated to Class A common stockholders $ 4,750 $ 36,012

Weighted-average Class A shares issued and outstanding 52,942 51,813

Dilutive potential common shares:

Stock options — 16 — 108

Service-based restricted stock units 259 109

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Diluted weighted-average Class A shares issued and outstanding 53,270 52,021

Diluted (loss) earnings per Class A common share $ ( 0.12 ) $ 0.09 $ 0.58 $ 1.07

The restricted shares issued to Walmart contained non-forfeitable rights to dividends and were considered participating securities for purposes of computing EPS pursuant to the two-class method.

The computation above excludes income attributable to the unvested restricted shares from the numerator and excludes the dilutive impact of those underlying shares from the denominator.

Diluted earnings per Class A common share $ 0.09 $ 0.69

For the periods presented, we excluded certain restricted stock units and stock options outstanding, which could potentially dilute basic EPS in the future, from the computation of diluted EPS as their effect was anti-dilutive.

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The following table shows the weighted-average number of anti-dilutive shares excluded from the diluted EPS calculation:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

(In thousands)

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Performance-based restricted stock units 141 359

Unvested Walmart restricted shares — 109 — 189

Total 2,428 2,770

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For more information regarding the fair value hierarchy and how we measure fair value, see Note 2–Summary of Significant Accounting Policies to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2023.

As of September 30, 2023 and December 31, 2022, our assets carried at fair value on a recurring basis were as follows:

As of March 31, 2024 and December 31, 2023, our assets carried at fair value on a recurring basis were as follows:

Level 1 Level 2 Level 3 Total Fair Value

September 30, 2023 (In thousands)

March 31, 2024 (In thousands)

Investment securities:

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Total assets $ — $ 2,237,001 $ 4,735 $ 2,241,736

We based the fair value of our fixed income securities held as of September 30, 2023 and December 31, 2022 on quoted prices in active markets for similar assets.

We had no transfers between Level 1, Level 2 or Level 3 assets or liabilities during the three and nine months ended September 30, 2023 or 2022.

We based the fair value of our fixed income securities held as of March 31, 2024 and December 31, 2023 on quoted prices in active markets for similar assets.

We had no transfers between Level 1, Level 2 or Level 3 assets or liabilities during the three months ended March 31, 2024 or 2023.

A reconciliation of changes in fair value for Level 3 assets or liabilities are not considered material to these consolidated financial statements and therefore are not presented for any of the periods presented.

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Fair Value of Financial Instruments

The carrying values and fair values of certain financial instruments that were not carried at fair value, excluding short-term financial instruments for which the carrying value approximates fair value, at September 30, 2023 and December 31, 2022 are presented in the table below.

September 30, 2023 December 31, 2022

The carrying values and fair values of certain financial instruments that were not carried at fair value, excluding short-term financial instruments for which the carrying value approximates fair value, at March 31, 2024 and December 31, 2023 are presented in the table below.

March 31, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value Fair Value

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Our leases have remaining lease terms of less than 1 year to approximately 9 years, most of which generally include renewal options of varying terms.

Our total lease expense amounted to approximately $ 0.8 million and $ 1.0 million for the three months ended September 30, 2023 and 2022, respectively, and $ 2.8 million and $ 3.3 million for the nine months ended September 30, 2023 and 2022, respectively.

Our total lease expense amounted to approximately $ 0.9 million and $ 1.0 million for the three months ended March 31, 2024 and 2023, respectively.

Our lease expense is generally based on fixed payments stated within the agreements.

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Additional information related to our right of use assets and related lease liabilities is as follows:

September 30, 2023

March 31, 2024

Cash paid for operating lease liabilities (in thousands) $ 917

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Weighted average discount rate 5.1 %

Maturities of our operating lease liabilities as of September 30, 2023 are as follows:

Maturities of our operating lease liabilities as of March 31, 2024 are as follows:

Operating Leases

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Note 17— Commitments and Contingencies

Financial Commitments

As discussed in Note 7 — Equity Method Investments , we are committed to making annual capital contributions in TailFin Labs of $ 35.0 million per year from January 2020 through January 2024.

Litigation and Claims

In the ordinary course of business, we are a party to various legal proceedings, including, from time to time, regulatory, supervisory, and governmental matters as well as actions which are asserted to be maintainable as class action suits, employment claims, and or enforcement actions.

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Nonetheless, given the inherent unpredictability of these matters, an adverse outcome could, from time to time, have a material adverse impact on our financial condition or results of operations.

We and our subsidiary bank received a proposed consent order from the Federal Reserve Board relating principally to various aspects of compliance risk management, including consumer compliance and compliance with anti-money laundering regulations.

Included in the proposed consent order are proposals for civil money penalties related to these issues.

While we are still in discussions with the Federal Reserve Board regarding these proposals, we accrued an estimated liability of $ 20 million related to the proposed consent order during the three months ended December 31, 2023.

GREEN DOT CORPORATION

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Note 17—Commitments and Contingencies (continued)

On October 20, 2023, an alleged class action captioned Lyons v.

et al ., was filed in the U.S.

District Court for the Middle District of Alabama, alleging that Walmart, Green Dot Corporation, and Green Dot Bank breached implied warranties of merchantability and fitness for a particular purpose, and were otherwise negligent in the packaging of gift cards at Walmart stores, resulting in the unauthorized tampering with, and loss of stored values, on four gift cards sold in advance of the 2022 Christmas holiday season but that were later used at another location in January 2023.

The suit seeks to represent a nationwide class of persons who purchased a Visa Prepaid card issued by us and subjected to unauthorized use by a third party after purchase but prior to the first authorized use, at a Walmart retail store located in a state that has adopted Article 2 of the Uniform Commercial Code (thereby excluding Louisiana).

On October 24, 2023 the court on its own initiative ordered plaintiff to re-plead the action based on insufficient jurisdictional allegations, and an amended complaint was filed October 30, 2023.

On October 25, 2023, a putative class action, Brockingon v.

Green Dot Corporation, was filed in the Circuit Court of the 7th Judicial District for Volusia County, Florida, alleging the company violated Florida debt collection law by emailing, monthly, several email communications that her “Green Dot Account statement is ready” that were received between 5:58 a.m.

and 6:02 a.m., outside the permitted communication times of 8:01 a.m.

Plaintiff alleges that these communications are debt collection communications covered by the Florida Consumer Collection Practices Act, and seeks to represent a class of persons with Florida addresses who received communications between the hours of 9 p.m and 8 a.m.

in connection with the collection of a consumer debt.

On October 27, 2023, an alleged class action, Hester v.

Green Dot Corporation , was filed in District Court for Travis County, Texas, alleging he was unable to access funds in his account for an extended period, and that we have similarly blocked access for other customers.

The complaint purports to allege three causes of action for breach of contract, breach of fiduciary duty, and deceptive trade practices in violation of the Texas Deceptive Trade Practices Act.

The proposed class is all Texas residents and GO2bank customers or account holders who “had their accounts or funds blocked, closed, or otherwise restricted” for more than 72 hours at any time during the four years (or the length of the longest applicable statute of limitations for any asserted claim) immediately preceding the filing of this action continuing through the date of judgment.

There may be an exposure to loss in excess of the amount accrued.

We believe the estimate of the aggregate range of reasonably possible losses (meaning the likelihood of losses is more than remote but less than likely), is up to $ 50 million as of March 31, 2024.

This estimated range of reasonably possible losses is based on currently available information for those proceedings in which we are involved and considers our best estimate of such losses for those matters for which an estimate can be made.

However, there can be no assurance that our accrual is sufficient or that losses from the proposed consent order will not exceed the estimated range.

Other Litigation and Claims

On October 27, 2023, a putative class action, Hester v.

Green Dot Corporation , was filed in District Court for Travis County, Texas, alleging plaintiff was unable to access funds in his account for an extended period, and that other customers were similarly blocked access.

The complaint purported to assert three causes of action (for breach of contract, breach of fiduciary duty, and a statutory claim for deceptive trade practices).

The proposed class comprised all Texas residents and GO2bank customers or accountholders who “had their accounts or funds blocked, closed, or otherwise restricted” for more than 72 hours at any time during the four years (or the length of the longest applicable statute of limitations for any asserted claim) immediately preceding the filing of this action continuing through the date of judgment.

On November 21, 2023, we filed a motion to compel arbitration and stay all proceedings based on the express language of the deposit agreement.

On March 29, 2024, the court granted the motion, thereby directing the matter into arbitration, and likewise concluded that the “the contract’s prohibition on class and other non-individual claims is valid and enforceable."

On December 18, 2019, an alleged class action entitled Koffsmon v.

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Pension Fund as lead plaintiff, and on April 1, 2022, plaintiff filed its First Amended Complaint.

Defendants filed a motion to dismiss the First Amended Complaint on May 31, 2022, and the motion was heard on December 12, 2022.

On February 18, 2020, a shareholder derivative suit and securities class action entitled Hellman v.

Defendants filed a motion to dismiss the First Amended Complaint on May 31, 2022, and the motion was denied on March 29, 2024.

On February 18, 2020, a putative shareholder derivative action entitled Hellman v.

Streit, et al., No.

20-cv-01572-SVW-PVC was filed in United States District Court for the Central District of California, against us and certain of our officers and directors.

The suit avers purported breach of fiduciary duty and unjust enrichment claims, as well as claims under Sections 10(b), 14(a) and 20(a) of the Exchange Act, on the basis of the same wrongdoing alleged in the first lawsuit described above.

The suit does not define the purported class allegedly damaged.

These cases have been related and, pursuant to a stipulated agreement between the parties, the Hellman suit is stayed pending resolution of any motions to dismiss in the Koffsmon case reference above, after which time the parties will meet and confer on a case schedule, including the schedule for defendants to respond to the complaint.

We have not yet responded to the complaints in these matters.

20-cv-01572-SVW-PVC was filed, purportedly on behalf of the company, in United States District Court for the Central District of California, against certain of our current and former officers and directors.

The suit asserts claims for breach of fiduciary duty and unjust enrichment, as well as claims under Sections 10(b), 14(a) and 20(a) of the Exchange Act, based largely on the allegations made in the Koffsmon action.

The Hellman action seeks to recover, among other things, unspecified compensatory damages on behalf of the company.

Pursuant to a stipulated agreement, the parties to the Hellman action have requested that the court enter an order staying the action through the close of discovery in the Koffsmon action.

Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of these matters.

Given the uncertainty of litigation and the preliminary stage of these claims, we are currently unable to estimate the probability of the outcome of these actions or the range of reasonably possible losses, if any, or the impact on our results of operations, financial condition or cash flows, except as disclosed.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

Other Legal Matters

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If we were found to be in violation of any laws and regulations governing banking, money transmitters, electronic fund transfers, or money laundering in the United States or abroad, we could be subject to penalties or could be forced to change our business practices.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

From time to time, we enter into contracts containing provisions that contingently require us to indemnify various parties against claims from third parties.

These contracts primarily relate to:

(i) contracts with our card issuing banks, under which we are responsible to them for any unrecovered overdrafts on cardholders’ accounts;

(i) contracts with our card issuing banks, under which we are responsible to them for any unrecovered overdrafts on accountholders’ balances;

(ii) certain real estate leases, under which we may be required to indemnify property owners for environmental and other liabilities, and other claims arising from our use of the premises;

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Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated.

With the exception of overdrafts on cardholders’ accounts, historically, we have not been required to make payments under these and similar contingent obligations, and no liabilities have been recorded for these obligations in our consolidated balance sheets.

For additional information regarding overdrafts on cardholders’ accounts, refer to Note 5 — Accounts Receivable.

With the exception of overdrafts on accountholders’ balances, historically, we have not been required to make payments under these and similar contingent obligations, and no liabilities have been recorded for these obligations in our consolidated balance sheets.

For additional information regarding overdrafts on accountholders’ balances, refer to Note 5 — Accounts Receivable.

Note 18— Significant Retailer and Partner Concentration

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Revenues derived from our products sold at retail distributors constituting greater than 10% of our total operating revenues were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Walmart 10 % 17 %

In addition, approximately 47 % and 35 % of our total operating revenues for the three months ended September 30, 2023 and 2022, respectively, and 39 % and 29 % for the nine months ended September 30, 2023 and 2022, respectively, were generated from a single BaaS partner, but without a corresponding concentration to gross profit for the periods.

In addition, approximately 46 % and 32 % of our total operating revenues for the three months ended March 31, 2024 and 2023, respectively, were generated from a single BaaS partner, but without a corresponding concentration to our gross profit for the respective periods.

Note 19— Segment Information

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Our money processing services, such as cash deposit and disbursements, are marketed to third-party banks, program managers, and other companies seeking cash deposit and disbursement capabilities for their customers.

Those customers, including our own cardholders, can access our cash deposit and disbursement services at any of the locations within our network of retail distributors and neighborhood Financial Service Centers.

Those customers, including our own accountholders, can access our cash deposit and disbursement services at any of the locations within our network of retail distributors and neighborhood Financial Service Centers.

We market our tax-related financial services through a network of tax preparation franchises, independent tax professionals and online tax preparation providers.

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The following tables present financial information for each of our reportable segments for the periods then ended:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Segment Revenue (In thousands)

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Note 19—Segment Information (continued)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Segment Profit (In thousands)

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Total segment profit 59,232 82,543

Reconciliation to (loss) income before income taxes

Reconciliation to income before income taxes

Depreciation and amortization of property, equipment and internal-use software 16,432 13,701

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Other expense 5,591 2,534

Operating (loss) income ( 6,839 ) 10,765 48,942 86,296

Operating income 10,554 50,995

Interest expense, net 1,457 1,644

Other expense, net ( 1,810 ) ( 3,024 )

(Loss) income before income taxes $ ( 7,880 ) $ 6,489 $ 40,771 $ 77,096

Income before income taxes $ 7,287 $ 46,327

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements