What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 163 added, 170 removed, 642 unchanged (34% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Assets (In thousands, except par value)

9 unchanged sentences

Investment securities available-for-sale, at fair value 2,120,803 2,203,142

Loans to bank customers, net of allowance for credit losses of $ 17,360 and $ 11,383 as of June 30, 2024 and December 31, 2023, respectively

Loans to bank customers, net of allowance for credit losses of $ 17,778 and $ 11,383 as of September 30, 2024 and December 31, 2023, respectively

33,380 30,534

21 unchanged sentences

Operating lease liabilities 2,068 2,687

Notes payable 43,675 —

Total liabilities 4,353,042 3,957,772

2 unchanged sentences

Class A common stock, $ 0.001 par value;

100,000 shares authorized as of June 30, 2024 and December 31, 2023;

53,707 and 52,816 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

100,000 shares authorized as of September 30, 2024 and December 31, 2023;

53,751 and 52,816 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 400,769 375,980

6 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

28 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

3 unchanged sentences

Unrealized holding income (loss), net of tax 62,175 ( 47,263 ) 79,910 ( 44,332 )

Comprehensive (loss) income $ ( 10,301 ) $ ( 32,788 ) $ ( 6,230 ) $ 39,521

Comprehensive income (loss) $ 54,335 $ ( 53,528 ) $ 48,105 $ ( 14,007 )

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

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

1 unchanged sentence

(In thousands)

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

Balance at June 30, 2024 53,707 $ 54 $ 392,810 $ 746,339 $ ( 269,252 ) $ 869,951

Common stock issued under stock plans, net of withholdings and related tax effects 44 — ( 228 ) — — ( 228 )

2 unchanged sentences

Other comprehensive income — — — — 62,175 62,175

Balance at June 30, 2024 53,707 $ 54 $ 392,810 $ 746,339 $ ( 269,252 ) $ 869,951

Three Months Ended June 30, 2023

Balance at September 30, 2024 53,751 $ 54 $ 400,769 $ 738,499 $ ( 207,077 ) $ 932,245

Three Months Ended September 30, 2023

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

1 unchanged sentence

(In thousands)

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

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 income — — — 578 — 578

Net loss — — — ( 6,265 ) — ( 6,265 )

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

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

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

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

6 unchanged sentences

Other comprehensive income — — — — 79,910 79,910

Balance at June 30, 2024 53,707 $ 54 $ 392,810 $ 746,339 $ ( 269,252 ) $ 869,951

Six Months Ended June 30, 2023

Balance at September 30, 2024 53,751 $ 54 $ 400,769 $ 738,499 $ ( 207,077 ) $ 932,245

Nine Months Ended September 30, 2023

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

5 unchanged sentences

Net income — — — 30,325 — 30,325

Other comprehensive income — — — — 2,931 2,931

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

Other comprehensive loss — — — — ( 44,332 ) ( 44,332 )

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

See notes to unaudited consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

21 unchanged sentences

Investing activities

Purchases of available-for-sale investment securities ( 11,845 ) —

Proceeds from maturities of available-for-sale securities 154,682 131,559

3 unchanged sentences

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

Proceeds from other investments 55,088 —

Other investing activities ( 846 ) ( 1,273 )

Net cash provided by (used in) investing activities 7,783 ( 9,581 )

Net cash provided by investing activities 85,818 18,420

Financing activities

Borrowings on notes payable 44,551 —

Borrowings on revolving line of credit 238,000 153,000

4 unchanged sentences

Net changes in settlement assets and obligations to customers 46,013 ( 8,776 )

Deferred financing costs ( 894 ) —

Net cash provided by (used in) financing activities 576,878 ( 255,278 )

14 unchanged sentences

Our technology platform enables us to build products and features that address the most pressing financial challenges of consumers and businesses, transforming the way they manage and move money, and making financial empowerment more accessible for all.

We offer a broad set of financial services to consumers and businesses including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements.

Through Green Dot Bank, our wholly-owned subsidiary, we offer a suite of financial products to consumers and businesses including debit, prepaid, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refund processing, cash deposits and disbursements.

We were incorporated in Delaware in 1999 and became a bank holding company under the Bank Holding Company Act and a member bank of the Federal Reserve System in December 2011.

5 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 six months ended June 30, 2024, except as discussed further below.

There have been no material changes to our previously disclosed significant accounting policies during the nine months ended September 30, 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 June 30, 2024 and through the date of this report.

These financial statements were prepared using information reasonably available as of September 30, 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.

We have historically performed our annual goodwill impairment assessment as of September 30, the last day of our third fiscal quarter.

During the second quarter of fiscal year 2024, we voluntarily made the decision to change the date of our annual impairment assessment from September 30 to November 30.

The change was made to align the annual goodwill impairment assessment date more closely with the timing of our annual and long-term budgeting cycles.

We determined this change in accounting principle is preferable and will not affect our consolidated financial statements.

This change is not applied retrospectively, as it is impracticable to do so because retrospective application would require application of significant estimates and assumptions with the use of hindsight.

Accordingly, the change will be applied prospectively.

We believe the change in goodwill impairment testing date does not represent a material change to our method of applying an accounting principle in light of our internal controls over financial reporting and requirements to assess goodwill impairment upon certain triggering events, and does not delay, accelerate or avoid any impairment charges.

In addition, we last performed a quantitative assessment as of December 31, 2023 on each of our reporting units as an update to our September 30, 2023 annual test.

As such, no more than 12 months will have elapsed between our previous assessment and our next annual assessment as of November 30, 2024.

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2—Summary of Significant Accounting Policies (continued)

disclosures about significant segment expenses.

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.

4 unchanged sentences

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

3 unchanged sentences

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

$ 95,576 $ 263,264 $ 34,826 $ 393,666

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Consumer Services B2B Services Money Movement Services Total

4 unchanged sentences

$ 287,634 $ 739,436 $ 198,329 $ 1,225,399

Six Months Ended June 30, 2023

Nine Months Ended September 30, 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 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.

GREEN DOT CORPORATION

1 unchanged sentence

Note 3—Revenues (continued)

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 $ 7.6 million in revenue for the three months ended June 30, 2024 and 2023, respectively, and $ 3.6 and $ 22.0 for the six months ended June 30, 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.

We recognized approximately $ 0.2 million and $ 0.7 million in revenue for the three months ended September 30, 2024 and 2023, respectively, and $ 3.7 million and $ 22.6 million for the nine months ended September 30, 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.

4 unchanged sentences

(In thousands)

June 30, 2024

September 30, 2024

Corporate bonds $ 10,000 $ — $ ( 157 ) $ 9,843

9 unchanged sentences

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4—Investment Securities (continued)

As of June 30, 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:

As of September 30, 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)

June 30, 2024

September 30, 2024

Corporate bonds $ — $ — $ 9,843 $ ( 157 ) $ 9,843 $ ( 157 )

9 unchanged sentences

Total investment securities $ — $ — $ 2,234,762 $ ( 380,265 ) $ 2,234,762 $ ( 380,265 )

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4—Investment Securities (continued)

Our investments generally consist of highly rated securities, substantially all of which are directly or indirectly backed by the U.S.

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

As such, we have not recorded any meaningful credit-related impairment losses during the three and six months ended June 30, 2024 or 2023 on our available-for-sale investment securities.

Unrealized losses as of June 30, 2024 and December 31, 2023 are the result of increases in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

Almost all of the underlying securities within our investment portfolio were in an unrealized loss position as of June 30, 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.

As such, we have not recorded any meaningful credit-related impairment losses during the three and nine months ended September 30, 2024 or 2023 on our available-for-sale investment securities.

Unrealized losses as of September 30, 2024 and December 31, 2023 are the result of increases in interest rates as our investment portfolio is comprised predominantly of fixed rate securities.

Almost all of the underlying securities within our investment portfolio were in an unrealized loss position as of September 30, 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.

As of June 30, 2024, the contractual maturities of our available-for-sale investment securities were as follows:

As of September 30, 2024, the contractual maturities of our available-for-sale investment securities were as follows:

Amortized cost Fair value

7 unchanged sentences

The expected payments on mortgage-backed and asset-backed securities may not coincide with their contractual maturities because the issuers have the right to call or prepay certain obligations.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5— Accounts Receivable

Accounts receivable, net consisted of the following:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands)

10 unchanged sentences

Accounts receivable, net $ 84,635 $ 110,141

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5—Accounts Receivable (continued)

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

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

4 unchanged sentences

Balance, end of period $ 2,489 $ 2,158 $ 2,489 $ 2,158

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6— Loans to Bank Customers

2 unchanged sentences

(In thousands)

June 30, 2024

September 30, 2024

Residential $ — $ — $ — $ — $ 6,419 $ 6,419

22 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, the fair value of the loans held for sale amounted to approximately $ 4.3 million and $ 4.7 million, respectively.

As of September 30, 2024 and December 31, 2023, the fair value of the loans held for sale amounted to approximately $ 4.0 million and $ 4.7 million, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6—Loans to Bank Customers (continued)

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.

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands)

3 unchanged sentences

Total loans $ 2,592 $ 2,703

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6—Loans to Bank Customers (continued)

Credit Quality Indicators

6 unchanged sentences

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:

June 30, 2024 December 31, 2023

September 30, 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

5 unchanged sentences

Balance, end of period $ 17,778 $ 15,552 $ 17,778 $ 15,552

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7— Equity Method Investments

8 unchanged sentences

Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7—Equity Method Investments (continued)

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 June 30, 2024 and December 31, 2023, our net investment in TailFin Labs amounted to approximately $ 136.6 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 $ 4.8 million and $ 3.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 7.9 million and $ 7.2 million for the six months ended June 30, 2024 and 2023, respectively.

As of September 30, 2024 and December 31, 2023, our net investment in TailFin Labs amounted to approximately $ 132.1 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 $ 4.4 million and $ 0.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 12.3 million and $ 8.0 million for the nine months ended September 30, 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 $ 3.3 million and $ 3.5 million at June 30, 2024 and December 31, 2023, respectively.

Equity in earnings from this investment for the three and six months ended June 30, 2024 and 2023 were not significant.

Our equity method investments also include an investment held by our bank, which amounted to $ 3.3 million and $ 3.5 million at September 30, 2024 and December 31, 2023, respectively.

Equity in earnings from this investment for the three and nine months ended September 30, 2024 and 2023 were not significant.

Note 8— Deposits

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands)

8 unchanged sentences

Total deposits $ 3,837,906 $ 3,293,603

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8—Deposits (continued)

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

June 30, 2024

September 30, 2024

(In thousands)

6 unchanged sentences

Total time deposits $ 6,001

Senior Unsecured Notes

In September 2024, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $ 45 million.

The Notes have a five-year term, maturing September 15, 2029.

The principal amounts bear interest at a fixed rate of 8.75 % per annum, payable semi-annually in arrears.

Prior to March 15, 2029, we may redeem at our option, the Notes in whole or in part at any time at a redemption price equal to 100% of the outstanding principal amount to be redeemed, together with accrued but unpaid interest thereon, plus a make-whole amount.

On and after March 15, 2029, we may redeem the Notes at 100% of the principal amount, plus accrued and unpaid interest thereon.

The Notes are unsecured, senior obligations and are not guaranteed by any of our subsidiaries.

The Notes are junior in right of payment to existing and future secured indebtedness.

As of September 30, 2024, we were in compliance with all affirmative and negative non-financial covenants thereunder.

The net proceeds of the offering were used to repay outstanding indebtedness under our revolving credit facility discussed below, and for general corporate purposes.

The following table provides the outstanding long-term debt balance, at amortized cost:

September 30, 2024

(In thousands)

Senior unsecured notes $ 45,000

Unamortized discount and issuance costs ( 1,325 )

Notes payable, net of unamortized discount and issuance costs $ 43,675

In October 2024, we issued and sold additional Notes in an aggregate principal amount of $ 5 million.

2019 Revolving Facility

In October 2019, we entered into a secured credit agreement with Wells Fargo Bank, National Association, and other lenders party thereto.

The credit agreement provided for a $ 100.0 million five-year revolving line of credit (the "2019 Revolving Facility"), which matured in October 2024.

As of September 30, 2024, the then-outstanding balance on the 2019 Revolving Facility was repaid in full, and the 2019 Revolving Facility terminated at its maturity date.

We incurred total cash interest expense on our debt during the three months ended September 30, 2024 and 2023 of approximately $ 1.5 million and $ 0.2 million, respectively and during the nine months ended September 30, 2024 and 2023 of $ 4.2 million and $ 2.0 million, respectively.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

In October 2019, we entered into a secured credit agreement with Wells Fargo Bank, National Association, and other lenders party thereto.

The credit agreement provides for a $ 100.0 million five-year revolving line of credit (the "2019 Revolving Facility"), maturing in October 2024.

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 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 June 30, 2024, the outstanding balance on the 2019 Revolving Facility was $ 62 million, with $ 38 million available for use.

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

At our election, loans made under the credit agreement bear interest at 1) an adjusted SOFR rate (the “SOFR Rate") or 2) a base rate determined by reference to the highest of (a) the United States federal funds rate plus 0.50 %, (b) the Wells Fargo prime rate, and (c) an adjusted SOFR rate plus 1.0 % (the “Base Rate"), plus in either case, an applicable margin.

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 June 30, 2024 was approximately 7.08 %.

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.

Letter of credit fees are payable in respect of outstanding letters of credit at a rate per annum equal to the applicable margin for SOFR Rate loans.

The 2019 Revolving Facility contains certain affirmative and negative covenants including negative covenants that limit or restrict, among other things, liens, indebtedness, investments and acquisitions, mergers and fundamental changes, asset sales, restricted payments, changes in the nature of the business, transactions with affiliates and other matters customarily restricted in such agreements.

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 June 30, 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 months ended June 30, 2024 and 2023 of approximately $ 1.2 million and $ 0.2 million, respectively and during the six months ended June 30, 2024 and 2023 of $ 2.7 million and $ 1.8 million, respectively.

Note 10— Income Taxes

Income tax expense for the six months ended June 30, 2024 and 2023 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes.

Income tax expense for the nine months ended September 30, 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:

Six Months Ended June 30,

Nine Months Ended September 30,

federal statutory tax rate 21.0 % 21.0 %

10 unchanged sentences

Effective tax rate ( 4.6 ) % 25.6 %

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Income Taxes (continued)

The effective tax rate for the six months ended June 30, 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, nondeductible expenses and penalties, 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 decrease in the effective tax rate for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 is primarily due to the impact of a decrease of $ 2.5 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 $ 3.3 million in state income taxes, net of federal benefits, and the impact of general business credits.

These decreases were partially offset by a $ 0.5 million increase in tax expense associated with shortfalls from stock-based compensation, an increase in tax expense due to nondeductible expenses and penalties, 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 during the six months ended June 30, 2024.

We recognized a discrete tax expense related to tax shortfalls from stock-based compensation of $ 2.8 million for the six months ended June 30, 2024, compared to a $ 2.3 million discrete tax expense for the prior year comparable period.

The increase in nondeductible expenses and penalties for the six months ended June 30, 2024 is primarily related to the tax effect associated with the civil money penalty accrual for our consent order received from the Federal Reserve Board discussed in Note 17 - Commitments and Contingencies.

The effective tax rate for the nine months ended September 30, 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, nondeductible expenses and penalties, 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 decrease in the effective tax rate for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 is primarily due to the impact of a decrease of $ 1.6 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 $ 2.5 million in state income taxes, net of federal benefits, and the impact of general business credits.

These decreases were partially offset by a $ 0.2 million increase in tax expense associated with shortfalls from stock-based compensation, an increase in tax expense due to nondeductible expenses and penalties, and the surrender of our existing bank owned life insurance policies which resulted in a tax charge of $ 1.5 million and surrender penalties of $ 0.7 million during the nine months ended September 30, 2024.

We recognized a discrete tax expense related to tax shortfalls from stock-based compensation of $ 3.0 million for the nine months ended September 30, 2024, compared to a $ 2.8 million discrete tax expense for the prior year comparable period.

The increase in nondeductible expenses and penalties for the nine months ended September 30, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order (defined below) discussed in Note 17 - Commitments and Contingencies.

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 six months ended June 30, 2024 and 2023, the provision for GILTI tax expense was not material to our financial statements.

For the nine months ended September 30, 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 June 30, 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.

As of September 30, 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 (the "IRS"), and various state tax authorities.

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

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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 June 30, 2024.

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

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

As of June 30, 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.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10—Income Taxes (continued)

As of September 30, 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 June 30, 2024 and December 31, 2023, we had a liability of $ 13.4 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.

As of September 30, 2024 and December 31, 2023, we had a liability of $ 13.4 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)

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

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The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate $ 12,884 $ 12,129

As of June 30, 2024 and 2023, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.6 million and $ 1.2 million, respectively.

As of September 30, 2024 and 2023, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.8 million and $ 1.3 million, respectively.

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 June 30, 2024, we had an authorized $ 4.5 million remaining under our stock repurchase program for additional repurchases.

There were no repurchases during the six months ended June 30, 2024.

As of September 30, 2024, we had an authorized $ 4.5 million remaining under our stock repurchase program for additional repurchases.

There were no repurchases during the nine months ended September 30, 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 $ 7.2 million and $ 10.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 15.9 million and $ 19.8 million for the six months ended June 30, 2024 and 2023, respectively.

The total stock-based compensation expense recognized was $ 8.2 million and $ 7.9 million for the three months ended September 30, 2024 and 2023, respectively, and $ 24.1 million and $ 27.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Restricted Stock Units

Restricted stock unit activity for awards subject to only service conditions was as follows for the six months ended June 30, 2024:

Restricted stock unit activity for awards subject to only service conditions was as follows for the nine months ended September 30, 2024:

Shares Weighted-Average Grant-Date Fair Value

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Restricted stock units canceled ( 182 ) 20.93

Outstanding at June 30, 2024

Outstanding at September 30, 2024

3,331 $ 12.28

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12—Stock-Based Compensation (continued)

Performance-Based Restricted Stock Units

Performance-based restricted stock unit activity for the six months ended June 30, 2024 was as follows:

Performance-based restricted stock unit activity for the nine months ended September 30, 2024 was as follows:

Shares Weighted-Average Grant-Date Fair Value

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Performance restricted stock units canceled ( 88 ) 24.59

Outstanding at June 30, 2024

Outstanding at September 30, 2024

1,894 $ 15.47

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12—Stock-Based Compensation (continued)

We grant performance-based restricted stock units to certain employees that are subject to the attainment of pre-established internal performance conditions, market conditions, or a combination thereof (collectively referred to herein as "performance-based restricted stock units").

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Stock Options

Total stock option activity for the six months ended June 30, 2024 was as follows:

Total stock option activity for the nine months ended September 30, 2024 was as follows:

Options Weighted-Average Exercise Price

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Options canceled ( 10 ) 18.80

Outstanding at June 30, 2024

Outstanding at September 30, 2024

1,000 $ 23.83

Exercisable at June 30, 2024

Exercisable at September 30, 2024

1,000 $ 23.83

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13— Earnings (Loss) per Common Share

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

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

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Additionally, we have excluded any performance-based restricted stock units where the performance contingency has not been met as of the end of the period, or whereby the result of including such awards was anti-dilutive.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13—Earnings (Loss) per Common Share (continued)

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

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

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Total 1,829 2,083 2,066 2,196

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14— Fair Value Measurements

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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 June 30, 2024 and December 31, 2023, our assets carried at fair value on a recurring basis were as follows:

As of September 30, 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

June 30, 2024 (In thousands)

September 30, 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 June 30, 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 and six months ended June 30, 2024 or 2023.

We based the fair value of our fixed income securities held as of September 30, 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 and nine months ended September 30, 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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Under the fair value hierarchy, our deposits are classified as Level 2.

The fair value of our revolving line of credit is based on borrowing rates currently available to a market participant for loans with similar terms or maturity.

The carrying amount of our outstanding revolving line of credit approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk.

The fair value of the revolving line of credit is classified as a Level 2 liability in the fair value hierarchy.

The fair value of the Notes is based on borrowing rates currently available to a market participant for loans with similar terms, maturity and credit risk.

The carrying amount of our outstanding Notes at September 30, 2024 approximates fair value because the interest rate charged is commensurate with current market rates for issuers of similar risk.

The fair value of the Notes are classified as a Level 2 liability in the fair value hierarchy.

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 June 30, 2024 and December 31, 2023 are presented in the table below.

June 30, 2024 December 31, 2023

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, 2024 and December 31, 2023 are presented in the table below.

September 30, 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 8 years, most of which generally include renewal options of varying terms.

Our total lease expense amounted to approximately $ 0.9 million for each of the three months ended June 30, 2024 and 2023 and $ 1.8 million and $ 1.9 million for the six months ended June 30, 2024 and 2023, respectively.

Our total lease expense amounted to approximately $ 1.0 million and $ 0.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 2.8 million for each of the nine months ended September 30, 2024 and 2023.

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:

June 30, 2024

September 30, 2024

Cash paid for operating lease liabilities (in thousands) $ 2,689

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Weighted average discount rate 5.1 %

Maturities of our operating lease liabilities as of June 30, 2024 are as follows:

Maturities of our operating lease liabilities as of September 30, 2024 are as follows:

Operating Leases

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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.

As previously disclosed, on July 19, 2024, we and our subsidiary bank received a 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.

As previously disclosed, on July 19, 2024, we and our subsidiary bank received a consent order (the "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 Consent Order was a civil money penalty related to these issues in the amount of $ 44 million which was subsequently paid in July 2024.

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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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

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 March 29, 2024, the court granted our motion to compel arbitration and stay all proceedings based on the express language of the contract, which motion had been filed in November 2023.

The court further concluded that the “the contract’s prohibition on class and other non-individual claims is valid and enforceable." On May 28, 2024, the court thereafter entered an order formally confirming the earlier ruling and staying the case.

On August 6, 2024, the parties jointly requested the court to dismiss the suit with prejudice.

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

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The suit asserts purported claims under Sections 10(b) and 20(a) of the Exchange Act for allegedly misleading statements regarding our business strategy.

Plaintiff alleges that defendants made statements that were misleading because they allegedly failed to disclose details regarding our customer acquisition strategy and its impact on our financial performance.

Plaintiff alleges that defendants made statements that were

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

misleading because they allegedly failed to disclose details regarding our customer acquisition strategy and its impact on our financial performance.

The suit is purportedly brought on behalf of purchasers of our securities between May 9, 2018 and November 7, 2019, and seeks compensatory damages, fees and costs.

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Streit, et al.

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.

20-cv-01572-SVW-PVC was filed, purportedly on behalf of the company, in the 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.

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24-cv-05924 was filed, purportedly on behalf of the company, in the 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, abuse of control, and unjust enrichment, as well as claims under Section 14(a) of the Exchange Act, based on the allegations made in Koffsmon action, and on the proposed consent order from the Federal Reserve Board.

A first amended complaint was filed on September 27, 2024.

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

Pursuant to a stipulated agreement between the parties, the DiBlasio action is stayed 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.

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and (iv) contracts under which we may be required to indemnify our retail distributors, suppliers, vendors and other parties with whom we have contracts against claims arising from certain of our actions, omissions, violations of law and/or infringement of patents, trademarks, copyrights and/or other intellectual property rights.

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17—Commitments and Contingencies (continued)

Generally, a maximum obligation under these contracts is not explicitly stated.

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

GREEN DOT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 18— Significant Retailer and Partner Concentration

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

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

Walmart 10 % 17 % 10 % 17 %

In addition, approximately 54 % and 41 % of our total operating revenues for the three months ended June 30, 2024 and 2023, respectively, and 50 % and 36 % for the six months ended June 30, 2024 and 2023, respectively, were generated from a single BaaS partner, but without a corresponding concentration to our gross profit for the respective periods.

In addition, approximately 59 % and 47 % of our total operating revenues for the three months ended September 30, 2024 and 2023, respectively, and 53 % and 39 % for the nine months ended September 30, 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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We market our tax-related financial services through a network of tax preparation franchises, independent tax professionals and online tax preparation providers.

Our Corporate and Other segment primarily consists of net interest income, certain other investment income earned by our bank, interest profit sharing arrangements with certain BaaS partners (a reduction of revenue), eliminations of inter-segment revenues and expenses, and unallocated corporate expenses, which include our fixed expenses such as salaries, wages and related benefits for our employees, professional services fees, software licenses, telephone and communication costs, rent, utilities, and insurance.

These costs are not considered when our CODM evaluates the performance of our three reportable segments since they are not directly attributable to any reporting segment.

Non-cash expenses such as stock-based compensation, depreciation and amortization of long-lived assets, impairment charges, and other non-recurring expenses that are not considered by our CODM when evaluating our overall consolidated financial results are excluded from our unallocated corporate expenses

GREEN DOT CORPORATION

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Note 19—Segment Information (continued)

These costs are not considered when our CODM evaluates the performance of our three reportable segments since they are not directly attributable to any reporting segment.

We do not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented.

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

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

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Segment revenue adjustments represent commissions and certain processing-related costs associated with our BaaS products and services, which are netted against our B2B Services revenues when evaluating segment performance, as well as certain other investment income earned by our bank, which is included in Corporate and Other.

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

17 unchanged sentences

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