(in thousands, except share data)

(in thousands, except per share data)

(unaudited)

(in thousands)

(unaudited)

The terms “CURO" and the “Company” refer to CURO Group Holdings Corp. and its direct and indirect subsidiaries as a combined entity, except where otherwise stated.

The Company is a tech-enabled,an omni-channel consumer finance company serving customers in the U.S. and Canada for over 25 years. Our roots in the consumer finance market run deep. We have worked diligently to provide customers a variety of convenient, easily accessible financial services. Our decades of alternative data power a hard-to-replicate underwriting and scoring engine, mitigating risk across the full spectrum of non-prime and near-prime consumers in the U.S and non-prime and prime consumers in Canada.credit products.

The Company has prepared the accompanying unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP and the accounting policies described in its 20212022 Form 10-K. Interim results of operations are not necessarily indicative of results that might be expected for future interim periods or for the year ending December 31, 2022.2023.

While certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, the Company believes that the disclosures are adequate to enable a reasonable understanding of the information presented. Additionally, the Company qualifies as a Smaller Reporting Company (SRC) as defined by the SEC,an SRC, which allows registrantsit to report information under scaled disclosure requirements. SRC status is determined on an annual basis as of the last business day of the most recently completed second fiscal quarter. Under these rules, theJune 30th. The Company met the definition of an SRC as of June 30, 2022. As such, we made the election2023 and reflected SRC status beginning with our first quarterly report following the determination, as of and for the quarter ended June 30, 2022. We will reevaluate ourevaluate its status as of June 30, 2023.2024.

Beginning January 1, 2022,2023, the Company startedbegan reporting "Interest"Insurance and fees revenue," "Insurance premiums and commissions," and "Other revenue"other income" in place of the previously reported "Revenue""Insurance premiums and commissions" and "Other revenue" line itemitems in the unaudited Condensed Consolidated Statements of Operations. Prior period amounts have been reclassified to conform with current period presentation.

The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions including those impacted by COVID-19, that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Some estimates may also affect the reported amounts of revenues and expenses during the periods presented. Significant estimates that the Company made in the accompanying unaudited Condensed Consolidated Financial Statements include ALL,ACL, certain assumptions related to equity investments, goodwill and intangibles, accruals related to self-insurance, CSO liability for losses, estimated tax liabilities and the accounting for the First Heritage, Heights Finance and Flexiti acquisitions. Actual results may differ from those estimates.

Effective January 1, 2023, the Company completedmodified the divestituretimeframe over which it charges-off loans within the loans in Canada and made related refinements to its loss provisioning methodology. Prior to January 1, 2023, the Company deemed the loans in Canada uncollectible and charged-off on day 91 past-due. As part of our policy alignment, the Company revised its Legacy U.S. Direct Lending businessestimates and now considers a loan in Canada uncollectible and charged-off when they have been contractually past-due for more than 180 consecutive days. Consequently, such past-due loans and related accrued interest now remain in loans receivable for 180 days before being charged-off against the ACL. All recoveries on charged-off loans are credited to Community Choice Financial, for total cashthe ACL when received. The Company evaluates the adequacy of $345.0the ACL compared to the related gross loans receivable balances that include accrued interest.

ASU 2019-10 amended the mandatory effective date for ASU 2016-13. As a result ASU 2016-13 and related amendments are effective for fiscal years beginning after December 15, 2022 for entities that qualified as a smaller reporting company as of June 30, 2019, such as the Company. ASU 2016-13 and its amendments should be applied on either a prospective transition or modified-retrospective approach depending on the subtopic. The Company deferred the adoption of ASU 2016-13 untilCECL on January 1, 2023, through a modified-retrospective approach, the Company recorded an increase to the continuing operations ACL of $121.1 million and a corresponding one-time, cumulative reduction to continuing operations retained earnings of $102.7 million (net of $18.5 million in taxes) in the unaudited Condensed Consolidated Balance Sheet as permitted under of January 1, 2023. The Company’s continuing operations ACL increased from 6.5% to 16.1% as a percentage of the amortized cost basis on January 1, 2023.