Company: GDOT
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001386278-25-000034
Chunk: 102

Company: GREEN DOT CORP
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 102
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 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. This increase was partially offset by a decrease in equity method losses in TailFin Labs, LLC due to lower marketing expenses, and higher income earned from bank-owned life insurance policies.

33

Income Tax Expense

The following table presents a breakdown of our effective tax rate among federal, state, and other:

 Three Months Ended March 31, 20252024U.S. federal statutory tax rate21.0 %21.0 %State income taxes, net of federal tax benefit3.4 (1.4)Foreign tax rate differential(0.2)(1.5)General business credits(1.1)(11.5)Stock-based compensation3.8 22.7 IRC 162(m) limitation(2.9)(3.6)Bank owned life insurance income(1.0)(2.9)Bank owned life insurance surrender— 9.3 Nondeductible expenses0.3 2.6 Other0.1 0.1 Effective tax rate23.4 %34.8 %

Our income tax expense totaled $7.9 million for the three months ended March 31, 2025, representing an increase of $5.3 million, or 211%, from the prior year comparable period, primarily due to an increase in our taxable income, partially offset by a decrease in our effective tax rate. 

The decrease in our effective tax rate for the three months ended March 31, 2025 from the prior year comparable period was due to several factors, including the impact of general business credits, an increase of $0.1 million in tax benefits from bank owned life insurance policies, a decrease of $0.3 million in the tax expense associated with shortfalls from stock-based compensation, a decrease of $0.7 million in the amount of compensation expense that was subject to the IRC Section 162(m) limitation on the deductibility of certain executive compensation, a decrease of  $0.1 million in tax expense due to nondeductible expenses, and a decrease of $0.7 million related to our bank owned life insurance surrender penalties we incurred in connection with