Green Dot has hired Citi to explore “potential strategic alternatives,” the company disclosed in a Monday press release.
That would typically include a potential sale of the company, though payment and embedded finance services provider didn’t elaborate.
The Provo, Utah-based company also said its CEO, George Gresham, “ceased serving” in his leadership roles as of Friday, according to a filing with the Securities and Exchange Commisson. Gresham, who was also the company’s president, held the titles for only about 2½ years after he was promoted to the roles in October 2022 from chief operating and financial officer, following the termination of Dan Henry as CEO.
Green Dot appointed William Jacobs, 83, who is chair of its board, as interim CEO, a post he also held briefly in 2020, according to the SEC filing. Jacobs also was on the board of processor Global Payments until 2022.
Chris Ruppel, 53, who has served recently as the company’s chief revenue officer, was named interim president. He joined Green Dot in March 2017 as part of the company’s acquisition of UniRush, the SEC filing said.
Loss posted for last year
The management upheaval comes after Green Dot posted a $26.7 million loss for last year, despite an increase in revenue over the past two years and profits in each of them, according to its financial reports.
The company, which also operates a bank, offers financial services directly to consumers and through corporate clients via a banking-as-a-service model that lets other companies tap its bank capabilities. Its services include digital banking and checking accounts, as well as credit card services, gift card and prepaid debit cards.
The banking-as-a-service side of its operation accounts for the lion’s share of its revenue, with major technology companies such as Apple, Amazon and Intuit listed as clients in its annual filing last month.
Green Dot has grappled with shrinking profit margins, analysts for the investment firm William Blair wrote in a note to clients Monday. “Margin pressure has been driven by incremental costs and growth of the large BaaS customer that has low margins,” the analysts said.
Green Dot’s revenue from Apple climbed 50% last year to $948 million, equal to 55% of its annual revenue, according to the William Blair report. That was up from 43% in 2023.
Trouble with partners
Despite fintech and banking industry consolidation, the analysts called out a “limited” list of “potential buyers.”
Another major Green Dot corporate client, retail juggernaut Walmart, offers some of the company’s financial products, including prepaid debit cards, at its stores. The income from that client fell 32% last year to $171 million and made up 10% of Green Dot’s revenue last year, according to William Blair.
The company’s consumer business took a hit last year when Green Dot was fined $44 million by the Federal Reserve for multiple violations related to alleged deceptive practices that deprived customers access to their funds. The Fed called out “a deficient consumer compliance risk management program.”
The company has previously stumbled in other major partnerships. In 2022, Green Dot was caught up in a contract dispute with then-client ride-share company Uber Technologies. And Republic Bank sued Green Dot in 2021, alleging breach of contract by the prepaid card company over its backing out of a $165 million deal to buy Republic’s tax refund processing unit. Green Dot paid $13 million to settle the suit.
