When mainstream banks reacted to Target's holiday-season breach by reissuing cards, their biggest worry was active accounts. But for a prepaid card issuer like Green Dot, the inactive cards on retailers' shelves were also a significant concern.

"As a precaution, sales of some of our products were suspended and pulled off the shelf for approximately 45 days in the period; some of that inventory is still not back on the shelf," said Steve Streit, Green Dot's chairman, president and CEO, in a conference call to discuss the company's first-quarter earnings.

"We took these proactive measures because we wanted to ensure that products that we sell that don't have the same type of customer verification processes as our [general purpose reloadable] card weren't purchased by bad guys using stolen debit or credit card data, so we lost those sales until we were able to get a better handle on the scope of the hack," he said.

The lost sales amounted to a 1% loss in revenue in the first quarter, Streit said. It also had to reissue active cards and refund customers for fraud on cards affected by the breach, as is required under Regulation E consumer protections.

Unlike the third-party card marketers Green Dot competes with, "we're a bank holding company…we do hold ourselves to a higher standard," Streit said.

Green Dot additionally lost an estimated 2% of revenue due to the harsh winter weather lowering card sales, reloads and spending. But analysts and investors have seemed more worried about the coming storm of competition.

Numerous analysts and investors have called Green Dot to ask about how it will respond to American Express' partnership with Walmart, said Streit.  Walmart now allows consumers to reload cash for free on Serve prepaid cards at Walmart locations.

Green Dot has found "a vibrant category of competitive products seems to drive sales at Green Dot," Streit said.

Amex Serve cards have been on the shelf beside Green Dot cards at many locations for years, and so far "Serve has had no discernable impact on our robust growth at Green Dot retailers," he said.

Green Dot also works with Walmart in a number of other ways. In November, Green Dot received approval to acquire GE Capital's Walmart-branded prepaid debit business.  Walmart also helped Green Dot test its new "Reload @ the Register" service, which allows consumers to load funds to Green Dot cards by swiping that card at the register.

GoBank, Green Dot's mobile checking account, is continuing to grow, with enrollment rising as well as direct deposit and cash deposits increasing. "I'm always hesitant to get overly excited in a public call…but it's been a great product for us and we're really proud of it," Streit said.

Total operating revenue grew 3% to $159.3 million compared to the same time period in 2013. Its net income was $15.3 million, down 2% from $15.6 million a year earlier.

Green Dot's active card base increased by 5%, to 4.7 million active cards. And its number of customers receiving recurring direct deposit rose 8% in the quarter.

The prepaid provider has also been developing relationships with check cashers, signing up another 30 companies with between 100 and 200 locations in the first quarter to sell Green Dot's products in-store, Streit said.

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