Company: GDOT
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001386278-25-000076
Chunk: 244

Company: GREEN DOT CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 2
Chunk 244
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 year comparable periods. 

The decrease in other expense, net for three months ended September 30, 2025 was primarily driven by a decrease in equity method losses associated with TailFin Labs, LLC ("TailFin") due to lower operating expenses year over year, as well as higher income earned from bank-owned life insurance policies.

The increase in other expense, net for the nine months ended September 30, 2025 resulted principally from a $70 million incentive payment made by TailFin in connection with the extension of the Walmart MoneyCard agreement and related agreements in the second quarter of 2025. In addition, during the first quarter of 2025, we determined we would sell certain available-for-sales securities in order to reposition the proceeds into higher yielding assets, which resulted in a realized loss of $24.8 million for the nine months ended September 30, 2025. These increases were partially offset by higher income earned from bank-owned life insurance policies.

Income taxes

Our income tax benefit for the three months ended September 30, 2025 increased by $4.6 million over the prior year comparable period primarily due to an increase in our loss before taxes and a decrease in nondeductible expenses and penalties primarily related to the tax effect associated with the civil money penalty we incurred in 2024 for our Consent Order received from the Federal Reserve Board. Our effective tax rate for the nine months ended September 30, 2025 was 19.9%, an increase from (4.6)% for the prior year comparable period. The increase in our effective tax rate was due to several factors, including a lower tax rate benefit from reduced general business credits, an increase in state income taxes expense, net of federal benefits, and a lower tax rate benefit from the cash surrender value in bank-owned life insurance policies. These increases in our effective tax rate were partially offset by a decrease 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, a decrease in tax expense associated with shortfalls from stock-based compensation, and a decrease in tax expense from nondeductible expenses and penalties primarily related to the civil money penalty under our Consent Order discussed above. 

On July 4, 2025, H.R. 1, commonly referred to as the “One Big Beautiful Bill Act" (“OBBBA”) was signed into law, enacting significant changes to the U.S. federal tax code with various effective