GREEN DOT CORP 10-Q

ITEM 1. Financial Statements GREEN DOT CORPORATION CONSOLIDATED BALANCE SHEETS March 31, 2025 December 31, 2024 (unaudited) Assets (In thousands, except par value) Current assets: Unrestricted cash and cash equivalents $ 1,772,845 $ 1,592,391 Restricted cash 43 44 Investment securities available-for-sale, at fair value 102,037 24,152 Settlement assets 680,007 616,172 Accounts receivable, net 128,644 132,007 Prepaid expenses and other assets 62,706 63,424 Total current assets 2,746,282 2,428,190 Investment securities available-for-sale, at fair value 2,002,247 2,008,650 Loans to bank customers, net of allowance for credit losses of $ 22,356 and $ 17,542 as of March 31, 2025 and December 31, 2024, respectively 38,710 31,961 Prepaid expenses and other assets 240,258 242,707 Property, equipment, and internal-use software, net 194,604 188,363 Operating lease right-of-use assets 10,091 10,823 Deferred expenses 985 1,242 Net deferred tax assets 102,639 124,405 Goodwill and intangible assets 392,069 397,941 Total assets $ 5,727,885 $ 5,434,282 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 116,449 $ 103,765 Deposits 4,166,873 4,010,520 Obligations to customers 234,879 236,616 Settlement obligations 77,468 48,482 Amounts due to card issuing banks for overdrawn accounts — 84 Other accrued liabilities 91,200 87,675 Operating lease liabilities 2,260 2,416 Deferred revenue 4,797 6,279 Income tax payable 14,337 6,648 Total current liabilities 4,708,263 4,502,485 Other accrued liabilities 829 1,045 Operating lease liabilities 7,888 8,641 Notes payable 63,242 48,526 Total liabilities 4,780,222 4,560,697 Commitments and contingencies (Note 17) Stockholders’ equity: Class A common stock, $ 0.001 par value; 100,000 shares authorized as of March 31, 2025 and December 31, 2024; 54,873 and 54,227 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively 55 55 Additional paid-in capital 408,602 408,010 Retained earnings 769,375 743,602 Accumulated other comprehensive loss ( 230,369 ) ( 278,082 ) Total stockholders’ equity 947,663 873,585 Total liabilities and stockholders’ equity $ 5,727,885 $ 5,434,282 See notes to unaudited consolidated financial statements 1 Table of Contents GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 2025 2024 (In thousands, except per share data) Operating revenues: Card revenues and other fees $ 375,953 $ 281,503 Cash processing revenues 113,373 106,806 Interchange revenues 47,919 50,968 Interest income, net 21,629 12,711 Total operating revenues 558,874 451,988 Operating expenses: Sales and marketing expenses 59,688 62,375 Compensation and benefits expenses 66,214 66,824 Processing expenses 285,317 195,666 Other general and administrative expenses 86,910 116,569 Total operating expenses 498,129 441,434 Operating income 60,745 10,554 Interest expense, net 1,386 1,457 Other (expense), net ( 25,704 ) ( 1,810 ) Income before income taxes 33,655 7,287 Income tax expense 7,882 2,537 Net income $ 25,773 $ 4,750 Basic earnings per common share: $ 0.47 $ 0.09 Diluted earnings per common share $ 0.47 $ 0.09 Basic weighted-average common shares issued and outstanding: 54,361 52,942 Diluted weighted-average common shares issued and outstanding: 55,282 53,270 See notes to unaudited consolidated financial statements 2 Table of Contents GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended March 31, 2025 2024 (In thousands) Net income $ 25,773 $ 4,750 Other comprehensive income Unrealized holding income (loss), net of tax 29,321 ( 679 ) Reclassification of losses realized in net income, net of tax 18,392 — Comprehensive income $ 73,486 $ 4,071 See notes to unaudited consolidated financial statements 3 Table of Contents GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) Three Months Ended March 31, 2025 Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity Shares Amount (In thousands) Balance at December 31, 2024 54,227 $ 55 $ 408,010 $ 743,602 $ ( 278,082 ) $ 873,585 Common stock issued under stock plans, net of withholdings and related tax effects 646 — ( 2,429 ) — — ( 2,429 ) Stock-based compensation — — 3,021 — — 3,021 Net income — — — 25,773 — 25,773 Other comprehensive income — — — — 47,713 47,713 Balance at March 31, 2025 54,873 $ 55 $ 408,602 $ 769,375 $ ( 230,369 ) $ 947,663 Three Months Ended March 31, 2024 Class A Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity Shares Amount (In thousands) Balance at December 31, 2023 52,816 $ 53 $ 375,980 $ 770,304 $ ( 286,987 ) $ 859,350 Common stock issued under stock plans, net of withholdings and related tax effects 342 — ( 1,400 ) — — ( 1,400 ) Stock-based compensation — — 8,625 — — 8,625 Net income — — — 4,750 — 4,750 Other comprehensive loss — — — — ( 679 ) ( 679 ) Balance at March 31, 2024 53,158 $ 53 $ 383,205 $ 775,054 $ ( 287,666 ) $ 870,646 See notes to unaudited consolidated financial statements 4 Table of Contents GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 2025 2024 (In thousands) Operating activities Net income $ 25,773 $ 4,750 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property, equipment and internal-use software 15,184 16,432 Amortization of intangible assets 5,200 5,664 Provision for uncollectible overdrawn accounts from purchase transactions 2,864 7,623 Provision for loan losses 11,127 4,788 Stock-based compensation 3,021 8,625 Losses in equity method investments 2,846 2,656 Realized loss on available-for-sale investment securities 24,497 — Amortization of discount on available-for-sale investment securities ( 513 ) ( 563 ) Impairment of long-lived assets 61 2,821 Other ( 1,499 ) ( 808 ) Changes in operating assets and liabilities: Accounts receivable, net 499 13,193 Prepaid expenses and other assets 1,720 17,033 Deferred expenses 257 142 Accounts payable and other accrued liabilities 11,988 5,786 Deferred revenue ( 1,695 ) ( 928 ) Income tax receivable/payable 7,713 2,198 Other, net ( 322 ) ( 235 ) Net cash provided by operating activities 108,721 89,177 Investing activities Purchases of available-for-sale investment securities ( 80,741 ) — Proceeds from maturities of available-for-sale securities 54,520 45,776 Proceeds from sales and calls of available-for-sale securities 287 95 Payments for property, equipment and internal-use software ( 19,418 ) ( 14,495 ) Net changes in loans ( 17,631 ) ( 39,939 ) Investment in TailFin Labs, LLC — ( 35,000 ) Proceeds from other investments — 39,118 Other investing activities ( 474 ) ( 81 ) Net cash used in investing activities ( 63,457 ) ( 4,526 ) Financing activities Borrowings on notes payable 14,860 — Borrowings on revolving line of credit — 64,000 Repayments on revolving line of credit — ( 80,000 ) Taxes paid related to net share settlement of equity awards ( 2,429 ) ( 1,400 ) Net changes in deposits 159,766 451,961 Net changes in settlement assets and obligations to customers ( 36,586 ) ( 86,684 ) Deferred financing costs ( 422 ) — Net cash provided by financing activities 135,189 347,877 Net increase in unrestricted cash, cash equivalents and restricted cash 180,453 432,528 Unrestricted cash, cash equivalents and restricted cash, beginning of period 1,592,435 686,502 Unrestricted cash, cash equivalents and restricted cash, end of period $ 1,772,888 $ 1,119,030 Cash paid for interest $ 2,112 $ 3,320 Cash paid for income taxes $ 3 $ 202 Reconciliation of unrestricted cash, cash equivalents and restricted cash at end of period: Unrestricted cash and cash equivalents $ 1,772,845 $ 1,118,804 Restricted cash 43 226 Total unrestricted cash, cash equivalents and restricted cash, end of period $ 1,772,888 $ 1,119,030 See notes to unaudited consolidated financial statements 5 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1— Organization Green Dot Corporation (“we,” “our,” or “us” refer to Green Dot Corporation and its consolidated subsidiaries) is a financial technology platform and registered bank holding company that builds banking and payment solutions to create value, retain and reward customers, and accelerate growth for businesses of all sizes. For more than two decades, we have delivered financial tools and services that address the most pressing financial needs of consumers and businesses, and that transform the way people and businesses manage and move money. Through Green Dot Bank, our wholly-owned subsidiary, we deliver a broad spectrum of financial products to consumers and businesses through our portfolio of brands, including debit, checking, credit, prepaid, and payroll cards, as well as robust money processing services, such as tax refunds, cash deposits and disbursements. We were incorporated in Delaware in 1999 and became a bank holding company under the Bank Holding Company Act and Green Dot Bank became a member bank of the Federal Reserve System in December 2011. Note 2— Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP. We consolidated our wholly-owned subsidiaries and eliminated all significant intercompany balances and transactions. We have also prepared the accompanying unaudited consolidated financial statements in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X and, consequently, they do not include all of the annual disclosures required by GAAP. Reference is made to our Annual Report on Form 10-K for the year ended December 31, 2024 for additional disclosures, including a summary of our significant accounting policies. There have been no material changes to our previously disclosed significant accounting policies during the three months ended March 31, 2025. 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. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available as of March 31, 2025 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. Actual results may differ from these estimates due to a variety of factors, including those identified under Part II, Item 1A. "Risk Factors" in this report. Recent Accounting Pronouncements Recently adopted accounting pronouncements In December 2023, the Financial Standards Accounting Board ("FASB") issued Accounting Standards Update ("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 annual periods beginning January 1, 2025, with early adoption permitted. We adopted this standard on January 1, 2025, which will expand our disclosures beginning with our annual consolidated financial statements for the year ended December 31, 2025, but will not have an impact on our consolidated financial results. Accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024-03 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, " which requires disclosures about specific types of expenses included in the expense captions presented on the consolidated statement of operations, as well as disclosures about selling expenses. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. We are currently evaluating the potential effect that the updated standard will have on our consolidated financial statement disclosures. 6 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 3— Revenues As discussed in Note 19 — Segment Informatio n, we determine our operating segments based on how our chief operating decision maker manages our operations, makes operating decisions and evaluates operating performance. Within our segments, we believe that the nature, amount, timing and uncertainty of our revenue and cash flows and how they are affected by economic factors can be further illustrated based on the timing in which revenue for each of our products and services is recognized. Our products and services are only offered to customers within the United States and certain U.S. territories. The following tables disaggregate our revenues earned from external customers by each of our reportable segments: Three Months Ended March 31, 2025 Consumer Services B2B Services Money Movement Services Total Timing of recognition (In thousands) Transferred point in time $ 69,258 $ 37,544 $ 112,440 $ 219,242 Transferred over time 23,830 293,367 806 318,003 Operating revenues (1) $ 93,088 $ 330,911 $ 113,246 $ 537,245 Three Months Ended March 31, 2024 Consumer Services B2B Services Money Movement Services Total Timing of recognition (In thousands) Transferred point in time $ 70,864 $ 33,800 $ 106,043 $ 210,707 Transferred over time 27,143 200,641 786 228,570 Operating revenues (1) $ 98,007 $ 234,441 $ 106,829 $ 439,277 (1) Excludes net interest income, a component of total operating revenues, as it is outside the scope of ASC 606, Revenues. 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. 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 $ 2.3 million and $ 2.9 million in revenue for the three months ended March 31, 2025 and 2024, respectively, that were included in deferred revenue at the beginning of the respective 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. 7 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 4— Investment Securities Our available-for-sale investment securities were as follows: Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) March 31, 2025 Corporate bonds $ 10,000 $ — $ ( 30 ) $ 9,970 Agency bond securities 238,184 — ( 30,208 ) 207,976 Agency mortgage-backed securities 2,125,665 12 ( 262,288 ) 1,863,389 Municipal bonds 28,824 — ( 5,875 ) 22,949 Total investment securities $ 2,402,673 $ 12 $ ( 298,401 ) $ 2,104,284 December 31, 2024 Corporate bonds $ 10,000 $ — $ ( 110 ) $ 9,890 Agency bond securities 240,628 — ( 38,132 ) 202,496 Agency mortgage-backed securities 2,121,037 3 ( 323,467 ) 1,797,573 Municipal bonds 29,116 — ( 6,273 ) 22,843 Total investment securities $ 2,400,781 $ 3 $ ( 367,982 ) $ 2,032,802 As of March 31, 2025 and December 31, 2024, 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 Fair value Unrealized loss Fair value Unrealized loss (In thousands) March 31, 2025 Corporate bonds $ — $ — $ 9,970 $ ( 30 ) $ 9,970 $ ( 30 ) Agency bond securities — — 169,018 ( 30,208 ) 169,018 ( 30,208 ) Agency mortgage-backed securities 85,489 ( 292 ) 1,096,475 ( 261,996 ) 1,181,964 ( 262,288 ) Municipal bonds — — 22,949 ( 5,875 ) 22,949 ( 5,875 ) Total investment securities $ 85,489 $ ( 292 ) $ 1,298,412 $ ( 298,109 ) $ 1,383,901 $ ( 298,401 ) December 31, 2024 Corporate bonds $ — $ — $ 9,890 $ ( 110 ) $ 9,890 $ ( 110 ) Agency bond securities — — 202,496 ( 38,132 ) 202,496 ( 38,132 ) Agency mortgage-backed securities 15,311 ( 937 ) 1,781,301 ( 322,530 ) 1,796,612 ( 323,467 ) Municipal bonds — — 22,843 ( 6,273 ) 22,843 ( 6,273 ) Total investment securities $ 15,311 $ ( 937 ) $ 2,016,530 $ ( 367,045 ) $ 2,031,841 $ ( 367,982 ) 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 credit-related impairment loss during the three months ended March 31, 2025 or 2024 on our available-for-sale investment securities. Unrealized losses as of March 31, 2025 and December 31, 2024 are the result of increases in interest rates relative to when they were purchased 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 March 31, 2025 and December 31, 2024 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. Except as disclosed below, we do not currently intend to sell our remaining 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. 8 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 4—Investment Securities (continued) In April 2025, we sold certain available-for-sales securities in order to reposition the proceeds into higher yielding assets. As a result, we recorded a realized loss of $ 24.5 million for the three months ended March 31, 2025 because we no longer had the intent to hold the securities until recovery of their amortized cost bases. The losses were recorded as a reduction of the amortized cost basis for each security and are reflected as a component of other expense, net on our consolidated statements of operations. As of March 31, 2025, the contractual maturities of our available-for-sale investment securities were as follows: Amortized cost Fair value (In thousands) Due in one year or less $ 102,067 $ 102,037 Due after one year through five years 86,247 80,042 Due after five years through ten years 117,226 99,530 Due after ten years 53,824 41,642 Mortgage and asset-backed securities 2,043,309 1,781,033 Total investment securities $ 2,402,673 $ 2,104,284 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. Note 5— Accounts Receivable Accounts receivable, net consisted of the following: March 31, 2025 December 31, 2024 (In thousands) Trade receivables $ 43,591 $ 35,426 Reserve for uncollectible trade receivables ( 34 ) — Net trade receivables 43,557 35,426 Overdrawn accountholder balances from purchase transactions 6,257 5,827 Reserve for uncollectible overdrawn accounts from purchase transactions ( 1,835 ) ( 1,741 ) Net overdrawn accountholder balances from purchase transactions 4,422 4,086 Accountholder fees 2,255 2,413 Receivables due from card issuing banks 1,628 1,757 Fee advances, net 4,507 46,588 Other receivables 72,275 41,737 Accounts receivable, net $ 128,644 $ 132,007 Activity in the reserve for uncollectible overdrawn accounts from purchase transactions consisted of the following: Three Months Ended March 31, 2025 2024 (In thousands) Balance, beginning of period $ 1,741 $ 5,281 Provision for uncollectible overdrawn accounts from purchase transactions 2,864 7,623 Charge-offs ( 2,770 ) ( 8,761 ) Balance, end of period $ 1,835 $ 4,143 9 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 6— Loans to Bank Customers The following table presents total outstanding loans, gross of the related allowance for credit losses, and a summary of the related payment status: 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Total Current or Less Than 30 Days Past Due Total Outstanding (In thousands) March 31, 2025 Residential $ — $ — $ — $ — $ 7,400 $ 7,400 Commercial — — — — 2,571 2,571 Installment — — — — 6,247 6,247 Consumer 1,339 — — 1,339 35,438 36,777 Secured credit card 485 597 2,022 3,104 4,967 8,071 Total loans $ 1,824 $ 597 $ 2,022 $ 4,443 $ 56,623 $ 61,066 Percentage of outstanding 3.0 % 1.0 % 3.3 % 7.3 % 92.7 % 100.0 % December 31, 2024 Residential $ 1 $ — $ — $ 1 $ 6,874 $ 6,875 Commercial — — — — 2,585 2,585 Installment — 933 — 933 4,506 5,439 Consumer 1,668 — — 1,668 23,868 25,536 Secured credit card 700 700 2,536 3,936 5,132 9,068 Total loans $ 2,369 $ 1,633 $ 2,536 $ 6,538 $ 42,965 $ 49,503 Percentage of outstanding 4.8 % 3.3 % 5.1 % 13.2 % 86.8 % 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 account balance. When overdrawn, the purchase related balances due on these deposit accounts are reclassified as consumer loans. 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. Also included in consumer loans are advances made to taxpayers under our tax advance program. These loan balances generally fluctuate over the first half of each year due to the seasonal nature of these advances. A portion of our secured credit card portfolio is classified as loans held for sale. These loans are included in the long-term portion of prepaid and other assets on our consolidated balance sheets. Changes in valuation allowances are recorded as a component of other income and expenses on our consolidated statement of operations. As of March 31, 2025 and December 31, 2024, the fair value of the loans held for sale amounted to approximately $ 3.6 million and $ 3.8 million, respectively. Nonperforming Loans The following table presents the carrying value, gross of the related allowance for credit losses, of our nonperforming loans. 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, 2024 for further information on the criteria for classification as nonperforming. March 31, 2025 December 31, 2024 (In thousands) Residential $ 31 $ 34 Secured credit card 2,022 2,536 Total loans $ 2,053 $ 2,570 10 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 6—Loans to Bank Customers (continued) Credit Quality Indicators We closely monitor and assess the credit quality and credit risk of our loan portfolio on an ongoing basis. We continuously review and update loan risk classifications. We evaluate our loans using non-classified or classified as the primary credit quality indicator. Classified loans include those designated as substandard, doubtful, or loss, consistent with regulatory guidelines. 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 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: March 31, 2025 December 31, 2024 Non-Classified Classified Non-Classified Classified (In thousands) Residential $ 7,369 $ 31 $ 6,841 $ 34 Commercial 2,571 — 2,585 — Installment 6,247 — 5,439 — Consumer 36,777 — 25,536 — Secured credit card 6,049 2,022 6,532 2,536 Total loans $ 59,013 $ 2,053 $ 46,933 $ 2,570 Allowance for Credit Losses Activity in the allowance for credit losses on our loan portfolio consisted of the following: Three Months Ended March 31, 2025 2024 (In thousands) Balance, beginning of period $ 17,542 $ 11,383 Provision for loans 11,127 4,788 Loans charged off ( 6,347 ) ( 5,859 ) Recoveries of loans previously charged off 34 64 Balance, end of period $ 22,356 $ 10,376 Note 7— Equity Method Investments On January 2, 2020, we effectuated our agreement with Walmart to jointly establish a new fintech accelerator under the name TailFin Labs, LLC (“TailFin”), with a mission to develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services. The entity is majority-owned by Walmart and was formed with a focus on developing tech-enabled solutions to integrate omni-channel retail shopping and financial services. 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 under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures. Under the equity method of accounting, the initial investment is recorded at cost and the investment is subsequently adjusted for, among other things, its proportionate share of earnings or losses. However, given the capital structure of the TailFin arrangement, we apply the Hypothetical Liquidation Book Value ("HLBV") method to determine the allocation of profits and losses since our liquidation rights and priorities, as defined by the agreement, differ from our underlying ownership interest. The HLBV method calculates the proceeds that would be attributable to each partner in an investment based on the liquidation provisions of the agreement if the partnership was to be liquidated at book value as of the balance sheet date. 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. Based on the terms of the agreement and under the HLBV method, we are entitled to 20 % of any net profits, but assume 100 % of any net losses. 11 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 7—Equity Method Investments (continued) Since inception, TailFin has incurred operating expenses but has not generated any operating revenues to date. Use of capital has been primarily allocated to marketing of Walmart's deposit account program and for employee salaries and other professional services focused on developing TailFin's project initiatives. While TailFin's overall objectives have remained unchanged, it is uncertain whether any new products or services will be successfully introduced through the venture. Any future economic benefits derived from products or services developed by TailFin will be negotiated on a case-by-case basis between the parties. As of March 31, 2025 and December 31, 2024, our net investment in TailFin amounted to approximately $ 125.6 million and $ 128.4 million, respectively, and is included in the long-term portion of prepaid expenses and other assets on our consolidated balance sheets. Based on the terms of the agreement, we recorded equity in losses attributable to TailFin of approximately $ 2.8 million and $ 3.1 million for the three months ended March 31, 2025 and 2024, respectively. These amounts are recorded as a component of other expense, net on our consolidated statements of operations. The following table presents summarized financial information of TailFin's statements of operations. March 31, 2025 2024 (In thousands) Interest income $ 1,269 $ 1,468 Sales and marketing expenses ( 2,229 ) ( 3,303 ) Compensation and professional services ( 1,798 ) ( 1,295 ) Net loss $ ( 2,758 ) $ ( 3,130 ) Refer to Note 20 - Subsequent Event for additional disclosure regarding our relationship with Walmart and our investment in Tailfin. Other equity method investments Our equity method investments also include an investment held by our bank, which amounted to $ 3.2 million as of March 31, 2025 and December 31, 2024. Equity in earnings from this investment for the three months ended March 31, 2025 and 2024 were not significant. Note 8— Deposits Deposits are categorized as non-interest bearing or interest-bearing deposit accounts as follows: March 31, 2025 December 31, 2024 (In thousands) Non-interest bearing deposit accounts $ 4,015,312 $ 3,905,603 Interest-bearing deposit accounts Checking accounts 135,172 89,256 Savings 7,179 6,270 Secured card deposits 3,517 3,659 Time deposits, denominations greater than or equal to $250 3,151 2,132 Time deposits, denominations less than $250 2,542 3,600 Total interest-bearing deposit accounts 151,561 104,917 Total deposits $ 4,166,873 $ 4,010,520 12 Table of Contents 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: March 31, 2025 (In thousands) Due in 2025 $ 2,313 Due in 2026 843 Due in 2027 1,144 Due in 2028 707 Due in 2029 686 Total time deposits $ 5,693 Note 9— Debt Senior Unsecured Notes In 2024 and 2025, we issued and sold senior unsecured notes (the "Notes") in an aggregate principal amount of $ 65 million, including $ 15 million during the three months ended March 31, 2025. 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 March 31, 2025, 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: March 31, 2025 December 31, 2024 (In thousands) Senior unsecured notes $ 65,000 $ 50,000 Less: Unamortized discount and issuance costs ( 1,758 ) ( 1,474 ) Notes payable, net of unamortized discount and issuance costs $ 63,242 $ 48,526 2025 Revolving Facility In February 2025, we entered into a new revolving line of credit agreement with a financial institution up to a maximum principal amount of $ 20 million, subject to borrowing base limitations defined under the terms of the agreement. The line of credit matures in August 2026 and will bear interest at variable market rates, but subject to a minimum rate of 6.0 % per annum. Interest payments are due monthly, and accrue based on the then-outstanding principal balance. We had no outstanding balance as of March 31, 2025. 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. In September 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 March 31, 2025 and 2024 of approximately $ 1.2 million and $ 1.4 million, respectively. 13 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 10— Income Taxes For the three months ended March 31, 2025, we utilized the discrete effective tax rate method, treating the year-to-date period as if it was the annual period to calculate our interim income tax provision, as allowed by ASC 740-270-30-18, " Income Taxes – Interim Reporting ." We determined we could not use the estimated annual effective tax rate method as we could not calculate a reliable estimate of the annual effective tax rate due to it being highly sensitive to minor changes in our forecasted amounts, thus generating significant variability in the estimated annual effective tax rate and distorting the customary relationship between income tax expense and pre-tax income in interim periods. Income tax expense for the three months ended March 31, 2025 and 2024 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: Three Months Ended March 31, 2025 2024 U.S. federal statutory tax rate 21.0 % 21.0 % State income taxes, net of federal tax benefit 3.4 ( 1.4 ) Foreign tax rate differential ( 0.2 ) ( 1.5 ) General business credits ( 1.1 ) ( 11.5 ) IRC 162(m) limitation ( 2.9 ) ( 3.6 ) Stock-based compensation 3.8 22.7 Bank owned life insurance income ( 1.0 ) ( 2.9 ) Bank owned life insurance surrender — 9.3 Nondeductible expenses 0.3 2.6 Other 0.1 0.1 Effective tax rate 23.4 % 34.8 % The effective tax rate for the three months ended March 31, 2025 and 2024 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, 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 three months ended March 31, 2025 from the prior year comparable period was due to several factors, including a decrease of $ 0.7 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a $ 0.3 million decrease in tax expense associated with shortfalls from stock-based compensation, a $ 0.1 million decrease in tax expense due to nondeductible expenses, a decrease of $ 0.7 million related to our bank owned life insurance surrender penalties we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies completed in 2024, and the impact of general business credits. These decreases were partially offset by an increase of $ 1.3 million in state income taxes, net of federal benefits. 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 three months ended March 31, 2025 and 2024, 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 March 31, 2025, we have a valuation allowance recorded against a portion of our unrealized loss on equity securities as we believe it is more-likely-than-not that the tax benefits related to this portion of the loss will not be realized. As of March 31, 2024, we did no t have a valuation allowance on any of our deferred tax assets as we believed it was more-likely-than-not that we would 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 2024. 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 March 31, 2025. We do not expect that this examination will have a material impact on our consolidated financial statements. 14 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 10—Income Taxes (continued) As of March 31, 2025, we had federal net operating loss carryforwards of approximately $ 11.1 million, state net operating loss carryforwards of approximately $ 120.1 million, and capital loss carryforwards of approximately $ 0.1 million which will be available to offset future income. If not used, the federal net operating losses will expire between 2030 and 2034. Of our total state net operating loss carryforwards, approximately $ 62.6 million will expire between 2028 and 2044, while the remaining balance of approximately $ 57.5 million does not expire and carries forward indefinitely. The capital loss carryforwards will expire in 2028. The net operating losses are subject to an annual IRC Section 382 limitation, which restricts their utilization against taxable income in future periods. In addition, we have state business tax credits of approximately $ 22.7 million that can be carried forward indefinitely and other state business tax credits of approximately $ 0.3 million that will begin expiring on December 31, 2025 and continue to expire through December 31, 2027. As of March 31, 2025 and December 31, 2024, we had a liability of $ 13.9 million and $ 12.5 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: Three Months Ended March 31, 2025 2024 (In thousands) Beginning balance $ 12,541 $ 12,109 Increases related to positions taken during prior years 1,314 1,380 Ending balance $ 13,855 $ 13,489 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate $ 13,301 $ 12,980 As of March 31, 2025 and 2024, we recognized accrued interest and penalties related to unrecognized tax benefits of approximately $ 1.8 million and $ 1.4 million, respectively. Note 11— Stockholders' Equity Stock Repurchase Program In February 2022, our Board of Directors authorized a $ 100 million increase to our stock repurchase program. As of March 31, 2025, 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, 2025. Note 12— Stock-Based Compensation We currently grant restricted stock unit awards to employees, directors and non-employee consultants under our 2010 Equity Incentive Plan and from time to time may also grant stock option awards. Through our 2010 Employee Stock Purchase Plan, employees are also able to purchase shares of our Class A common stock at a discount through payroll deductions. We have reserved shares of our Class A common stock for issuance under these plans. The total stock-based compensation expense recognized was $ 3.0 million and $ 8.6 million for the three months ended March 31, 2025 and 2024, respectively. Restricted Stock Units Restricted stock unit activity for awards subject to only service conditions was as follows for the three months ended March 31, 2025: Shares Weighted-Average Grant-Date Fair Value (In thousands, except per share data) Outstanding at December 31, 2024 3,077 $ 12.23 Restricted stock units granted 2,232 7.81 Restricted stock units vested ( 953 ) 14.45 Restricted stock units canceled ( 277 ) 11.58 Outstanding at March 31, 2025 4,079 $ 9.33 15 Table of Contents 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 three months ended March 31, 2025 was as follows: Shares Weighted-Average Grant-Date Fair Value (In thousands, except per share data) Outstanding at December 31, 2024 1,569 $ 12.73 Performance restricted stock units granted 111 7.83 Performance restricted stock units canceled ( 864 ) 12.49 Outstanding at March 31, 2025 816 $ 12.32 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"). The actual number of shares subject to the award is determined at the end of the performance period and may range from 0 % to 200 % of the target shares granted depending upon the terms of the award. Compensation expense related to these awards is recognized using the accelerated attribution method over the vesting period based on the grant date fair value of the award. Note 13— Earnings per Common Share The calculation of basic and diluted earnings per share ("EPS") was as follows: Three Months Ended March 31, 2025 2024 (In thousands, except per share data) Basic earnings per Class A common share Numerator: Net income $ 25,773 $ 4,750 Denominator: Weighted-average Class A shares issued and outstanding 54,361 52,942 Basic earnings per Class A common share $ 0.47 $ 0.09 Diluted earnings per Class A common share Numerator: Net income allocated to Class A common stockholders $ 25,773 $ 4,750 Denominator: Weighted-average Class A shares issued and outstanding 54,361 52,942 Dilutive potential common shares: Service-based restricted stock units 863 259 Performance-based restricted stock units 6 4 Employee stock purchase plan 52 65 Diluted weighted-average Class A shares issued and outstanding 55,282 53,270 Diluted earnings per Class A common share $ 0.47 $ 0.09 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. 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. 16 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 13—Earnings 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 March 31, 2025 2024 (In thousands) Class A common stock Options to purchase Class A common stock — 1,009 Service-based restricted stock units 602 1,278 Performance-based restricted stock units 717 141 Total 1,319 2,428 Note 14— Fair Value Measurements Under applicable accounting guidance, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We determine the fair values of our financial instruments based on the fair value hierarchy established under applicable accounting guidance, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs used to measure fair value. 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, 2024. As of March 31, 2025 and December 31, 2024, our assets carried at fair value on a recurring basis were as follows: Level 1 Level 2 Level 3 Total Fair Value March 31, 2025 (In thousands) Assets Investment securities: Corporate bonds $ — $ 9,970 $ — $ 9,970 Agency bond securities — 207,976 — 207,976 Agency mortgage-backed securities — 1,863,389 — 1,863,389 Municipal bonds — 22,949 — 22,949 Loans held for sale — — 3,594 3,594 Total assets $ — $ 2,104,284 $ 3,594 $ 2,107,878 December 31, 2024 Assets Investment securities: Corporate bonds $ — $ 9,890 $ — $ 9,890 Agency bond securities — 202,496 — 202,496 Agency mortgage-backed securities — 1,797,573 — 1,797,573 Municipal bonds — 22,843 — 22,843 Loans held for sale — — 3,849 3,849 Total assets $ — $ 2,032,802 $ 3,849 $ 2,036,651 We based the fair value of our fixed income securities held as of March 31, 2025 and December 31, 2024 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, 2025 or 2024. 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. 17 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 15— Fair Value of Financial Instruments The following describes the valuation technique for determining the fair value of financial instruments, whether or not such instruments are carried at fair value on our consolidated balance sheets. Short-term Financial Instruments Our short-term financial instruments consist principally of unrestricted and restricted cash and cash equivalents, settlement assets and obligations, and obligations to customers . These financial instruments are short-term in nature, and, accordingly, we believe their carrying amounts approximate their fair values. Under the fair value hierarchy, these instruments are classified as Level 1. Investment Securities The fair values of investment securities have been derived using methodologies referenced in 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, 2024 . Under the fair value hierarchy, our investment securities are classified as Level 2. Loans We determined the fair values of loans by discounting both principal and interest cash flows expected to be collected using a discount rate commensurate with the risk that we believe a market participant would consider in determining fair value. Under the fair value hierarchy, our loans are classified as Level 3. Deposits The fair value of demand and interest checking deposits and savings deposits is the amount payable on demand at the reporting date. We determined the fair value of time deposits by discounting expected future cash flows using market-derived rates based on our market yields on certificates of deposit, by maturity, at the measurement date. Under the fair value hierarchy, our deposits are classified as Level 2. Debt 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 March 31, 2025 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 March 31, 2025 and December 31, 2024 are presented in the table below. March 31, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Financial Assets Loans to bank customers, net of allowance $ 38,710 $ 38,445 $ 31,961 $ 31,705 Financial Liabilities Deposits $ 4,166,873 $ 4,166,560 $ 4,010,520 $ 4,010,185 18 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 16— Leases Our leases consist of operating lease agreements principally related to our subsidiary office locations. Currently, we do not enter into any financing lease agreements. Our leases have remaining lease terms of approximately 2 years to 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 March 31, 2025 and 2024. Our lease expense is generally based on fixed payments stated within the agreements. Any variable payments for non-lease components and other short term lease expenses are not considered material. Additional Information Additional information related to our right of use assets and related lease liabilities is as follows: March 31, 2025 Cash paid for operating lease liabilities (in thousands) $ 1,034 Weighted average remaining lease term (years) 4.08 Weighted average discount rate 4.0 % Maturities of our operating lease liabilities as of March 31, 2025 are as follows: Operating Leases (In thousands) Remainder of 2025 $ 2,869 2026 3,234 2027 3,204 2028 1,673 2029 271 Thereafter 904 Total 12,155 Less: imputed interest ( 2,007 ) Total lease liabilities $ 10,148 Note 17— Commitments and Contingencies 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. We review these actions on an ongoing basis to determine whether it is probable and estimable that a loss has occurred and use that information when making accrual and disclosure decisions. We have provided reserves where necessary for all claims and, based on current knowledge and in part upon the advice of legal counsel, all matters are believed to be adequately covered by insurance, or, if not covered, would not be likely to have a material adverse impact on our financial condition or results of operations. 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. Other Litigation and Claims On December 18, 2019, an alleged class action entitled Koffsmon v. Green Dot Corp., et al. , No. 19-cv-10701-DDP-E, was filed in the United States District Court for the Central District of California, against us and two of our former officers. 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. 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. On October 6, 2021, the Court appointed the New York Hotel Trades Council & Hotel Association of New York City, Inc. 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 denied on March 29, 2024. The trial on these claims is currently scheduled to begin in February 2027. 19 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 17—Commitments and Contingencies (continued) On February 18, 2020, a putative shareholder derivative action entitled Hellman v. Streit, et al. , No. 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. The Hellman action seeks to recover, among other things, unspecified compensatory damages on behalf of the company. Pursuant to a stipulated agreement between the parties, the Hellman action is stayed through the close of discovery in the Koffsmon action. On July 15, 2024, a putative shareholder derivative action entitled DiBlasio v. Streit, et al. , No. 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. A first amended complaint was filed on September 27, 2024. 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 Consent Order from the Federal Reserve Board. 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. 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. Other Legal Matters We monitor the laws of all 50 states to identify state laws or regulations that apply (or may apply) to our products and services. We have obtained money transmitter licenses (or similar such licenses) where applicable, based on advice of counsel or when we have been requested to do so. 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. 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 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; (iii) certain agreements with our officers, directors, and employees, under which we may be required to indemnify these persons for liabilities arising out of their relationship with us; 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. Generally, a maximum obligation under these contracts is not explicitly stated. 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 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. 20 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 18— Significant Retailer and Partner Concentration A credit concentration may exist if customers are involved in similar industries, economic sectors, and geographic regions. Our retail distributors operate in similar economic sectors, but diverse domestic geographic regions. The loss of a significant retail distributor could have a material adverse effect upon our card sales, profitability, and revenue growth. Revenues derived from our products sold at retail distributors constituting at least 10% of our total operating revenues were as follows: Three Months Ended March 31, 2025 2024 Walmart 7 % 10 % In addition, approximately 56 % and 46 % of our total operating revenues for the three months ended March 31, 2025 and 2024, 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 Our Chief Operating Decision Maker (our “CODM” who is our Chief Executive Officer) organizes and manages our businesses primarily on the basis of the channels in which our product and services are offered and uses net revenue and segment profit to assess profitability, segment performance and allocate resources. Segment profit reflects each segment's net revenue less direct costs, such as sales and marketing expenses, processing expenses, transaction losses and fraud management, and customer support and related expenses. Our operations are aggregated amongst three reportable segments: 1) Consumer Services, 2) Business to Business ("B2B") Services, and 3) Money Movement Services. Our Consumer Services segment consists of revenues and expenses derived from deposit account programs, such as consumer checking accounts, prepaid cards, secured credit cards, and gift cards that we offer to consumers (i) through distribution arrangements with more than 90,000 retail locations and thousands of neighborhood Financial Service Center locations (the "Retail channel"), and (ii) directly through various marketing channels, such as online search engine optimization, online displays, direct mail campaigns, mobile advertising, and affiliate referral programs (the "Direct channel"). Our B2B Services segment consists of revenues and expenses derived from (i) our partnerships with prominent consumer and technology companies that make our banking products and services available to their consumers, partners and workforce through integration with our banking platform (the "Banking-as-a-Service", or "BaaS channel"), and (ii) a comprehensive payroll platform that we offer to corporate enterprises (the "Employer channel") to facilitate payments for today’s workforce. Our products and services in this segment include deposit account programs, such as consumer and small business checking accounts and prepaid cards, as well as our disbursement services utilized by our partners. Our Money Movement Services segment consists of revenues and expenses generated on a per transaction basis from our services that specialize in facilitating the movement of cash on behalf of consumers and businesses, such as money processing services and tax refund processing services. 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 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. 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 and certain third-party contractors, 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 21 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 19—Segment Information (continued) unallocated corporate expenses above. We do not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented. The following tables present key financial information for each of our reportable segments for the periods then ended: Three Months Ended March 31, 2025 Consumer Services B2B Services Money Movement Services Corporate and Other Total (In thousands) Total segment revenues $ 95,256 $ 341,991 $ 110,247 $ 8,470 $ 555,964 Segment expenses (1) Sales and marketing expenses (2) 33,298 4,016 21,403 — 58,717 Processing expenses (3) 9,182 265,516 722 — 275,420 Transaction losses and fraud management (4) 14,350 25,813 7,625 — 47,788 Customer support and related expenses (5) 4,794 19,494 1,397 — 25,685 Compensation and benefits expenses (6) — — — 32,500 32,500 Other segment items (7) — — 2,274 23,021 25,295 Total segment expenses 61,624 314,839 33,421 55,521 465,405 Segment profit $ 33,632 $ 27,152 $ 76,826 $ ( 47,051 ) $ 90,559 Three Months Ended March 31, 2024 Consumer Services B2B Services Money Movement Services Corporate and Other Total (In thousands) Total segment revenues $ 100,612 $ 241,200 $ 103,150 $ 2,461 $ 447,423 Segment expenses (1) Sales and marketing expenses (2) 32,757 3,326 24,871 — 60,954 Processing expenses (3) 9,214 177,242 467 — 186,923 Transaction losses and fraud management (4) 21,581 32,423 7,868 — 61,872 Customer support and related expenses (5) 3,801 9,926 1,355 — 15,082 Compensation and benefits expenses (6) — — — 34,416 34,416 Other segment items (7) — — 2,742 26,202 28,944 Total segment expenses 67,353 222,917 37,303 60,618 388,191 Segment profit $ 33,259 $ 18,283 $ 65,847 $ ( 58,157 ) $ 59,232 22 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 19—Segment Information (continued) (1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (2) Sales and marketing expenses consists primarily of the commissions we pay to our retail distributors, brokers and partners, advertising and marketing expenses, and the costs of manufacturing and distributing card packages, placards and promotional materials to our retail distributors and partners, and personalized debit cards who have activated their cards. (3) Processing expenses consist primarily of the fees charged to us by the payment networks, which processes transactions for us, any third-party card processors that maintain the records of our customers' accounts and process transaction authorizations and postings, and any third-party banks that issue or process our accounts. (4) Transaction losses and fraud management consist primarily of losses from customer disputed transactions, unrecovered customer purchase transaction overdraft and fraud, and other losses on portfolios in our Money Movement Services segment. Fraud management consists of third-party contractors and support costs to manage risk operations. (5) Customer support and related expenses consist of third-party contractors hired to conduct call center operations and handle routine customer service inquiries, and the related costs to support our call center operations. (6) Compensation and benefits expenses represent the compensation and related benefits, including travel and entertainment, that we provide to our employees and third-party contractors who provide consulting support within our IT operations. (7) Other segment items in Money Movement Services consists principally of inter-segment expenses for reload services on the Green Dot Network. Other segment items in Corporate and Other primarily consists of other unallocated corporate operating expenses, such as professional services fees, hosting and software licenses, telephone and communication costs, rent, utilities, and insurance, and elimination of inter-segment expenses. The reconciliations of total segment revenues to total operating revenues are presented below: Three Months Ended March 31, 2025 2024 (In thousands) Total segment revenues $ 555,964 $ 447,423 Embedded finance commissions and processing expenses 4,427 5,100 Other income ( 1,517 ) ( 535 ) Total operating revenues $ 558,874 $ 451,988 Segment revenue adjustments represent commissions and certain processing-related costs associated with our embedded finance products and services, which are netted against revenues when evaluating segment performance, as well as certain other investment income earned by our bank, which is included in Corporate and Other. The reconciliations of segment profit to income before incomes taxes are presented below: Three Months Ended March 31, 2025 2024 (In thousands) Total segment profit $ 90,559 $ 59,232 Reconciliation to income before income taxes Depreciation and amortization of property, equipment and internal-use software 15,184 16,432 Stock based compensation and related employer taxes 3,443 8,706 Amortization of acquired intangible assets 5,200 5,664 Impairment charges 61 6,405 Legal settlement expenses 937 5,880 Other expense 4,989 5,591 Operating income 60,745 10,554 Interest expense, net 1,386 1,457 Other (expense), net ( 25,704 ) ( 1,810 ) Income before income taxes $ 33,655 $ 7,287 23 Table of Contents GREEN DOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) Note 20— Subsequent Event On April 29, 2025, we entered into an amendment which provides for us to continue serving as the issuing bank and program manager for the Walmart MoneyCard suite of reloadable debit card products, and entered into additional amendments pursuant to which we distribute our various products and services, including certain Green Dot-branded products and reload services through the Green Dot Network, at Walmart stores (collectively, the “Agreements”). The amended term of the Agreements expires on January 31, 2033, subject to an automatic one-year renewal provision under the terms of the arrangements. In consideration of the amended Agreements, we and the assignee of Walmart Inc. and its subsidiary parties, RNBW Ventures Inc., (“RNBW”), agreed to cause TailFin to pay RNBW a one-time, non-refundable incentive payment in the amount of $ 70 million, which we anticipate will be reflected as a component of equity in losses attributable to TailFin during the second quarter of 2025. 24 Table of Contents