Company: GDOT
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001386278-25-000009
Chunk: 70

Company: GREEN DOT CORP
Filing Date: 2025-03-04
Form: 10-K
Item: Item 7
Chunk 70
---
.7 million, or 47%, from the prior year comparable period. The decrease in our income tax expense was due primarily to a decrease in our pre-taxable income. Our effective tax rate for the years ended December 31, 2024 and 2023 was (18.5)% and 54.1%, respectively. The decrease in our effective tax rate was primarily attributable to a decrease in state income taxes expense, net of federal benefits, the impact of general business credits, and a reduction in the amount of compensation expense that was subject to the Internal Revenue Code (the "IRC") Section 162(m) limitation on the deductibility of certain executive compensation. These decreases were partially offset by incremental taxes and penalties ("surrender penalties") we incurred in connection with the surrender and restructuring of our existing bank owned life insurance policies, an increase in the valuation allowance on a portion of our unrealized loss on equity securities, an increase in tax expense associated with shortfalls from stock-based compensation, and an increase in tax expense due to nondeductible expenses and penalties. The increase in nondeductible expenses and penalties for the year ended December 31, 2024 is primarily related to the tax effect associated with the civil money penalty for the Consent Order.

In December 2021, the Organization for Economic Cooperation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational corporations ("Pillar Two"). Certain countries in which we operate have enacted legislation consistent with the OECD model rules effective beginning in 2024. We are monitoring legislative developments and continuing to evaluate the potential impact of Pillar Two on our 

34

consolidated financial statements, but we do not expect that it will have a material impact on our results of operations in future periods.

Outlook and Other Trends Affecting Our Business

While we are still experiencing a difficult macro-economic environment, competitive headwinds and other factors that have contributed to declining trends in our consolidated operating results in recent periods, we expect our results of operations will stabilize on a year-over-year basis in 2025 based on our anticipated initiatives and cost reduction measures we have implemented.

We intend to continue to make growth-oriented investments and incur other expenditures that we believe will benefit our long-term financial results. Our growth-oriented investments are focused on, among other things, cost-effectively re-engaging in strategic marketing initiatives in support of our GO2bank product and other initiatives across our account programs with the objective of returning to active account growth.

We have