UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2021~~2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

Commission file number 001-37973

NI HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

NORTH DAKOTA (State or other jurisdiction of incorporation or organization)		81-2683619 (IRS Employer Identification No.)

1101 First Avenue North Fargo, North Dakota		58102
(Address of principal executive offices)		(Zip Code)

~~(701)~~ (701) 298-4200
Registrant’s telephone number, including area code

Not applicable
Former name, former address, and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	NODK	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes No ☒

The number of shares of Registrant’s common stock outstanding on ~~October~~July 31, ~~2021~~2022 was ~~21,232,976.~~21,179,053. No preferred shares are issued or outstanding.

TABLE OF CONTENTS


FORWARD-LOOKING STATEMENTS	2
Part I. - FINANCIAL INFORMATION	3
Item 1. - Financial Statements	3
Consolidated Balance ~~Sheets~~Sheet – June 30, 2022 (Unaudited) and December 31, 2021	3
~~Unaudited~~ Consolidated Statements of Operations (Unaudited) – Three Months and Six Months Ended June 30, 2022 and 2021	4
~~Unaudited~~ Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three Months and Six Months Ended June 30, 2022 and 2021	5
~~Unaudited~~ Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) – Three Months and Six Months Ended June 30, 2022 and 2021	6
~~Unaudited~~ Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended June 30, 2022 and 2021	8
Notes to Unaudited Consolidated Financial Statements	9
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations	3735
Item 3. - Quantitative and Qualitative Disclosures about Market Risk	5142
Item 4. - Controls and Procedures	5142
Part II. - OTHER INFORMATION	5243
Item 1. - Legal Proceedings	5243
Item 1A. - Risk Factors	5243
Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds	5344
Item 3. - Defaults upon Senior Securities	5445
Item 4. - Mine Safety Disclosures	5445
Item 5. - Other Information	5445
Item 6. - Exhibits	5445
Signatures	5546

Table of Contents

CERTAIN IMPORTANT INFORMATION

Unless the context otherwise requires, as used in this quarterly report on Form 10-Q:

•

“NI Holdings”, “the Company”, “we”, “us”, and “our” refer to NI Holdings, Inc., together with Nodak Insurance Company and its subsidiaries and its affiliate (Battle Creek Mutual Insurance Company), Direct Auto Insurance Company (acquired August 31, 2018), and Westminster American Insurance Company (acquired January 1, 2020), for periods discussed after completion of the conversion, and for periods discussed prior to completion of the conversion refer to Nodak Mutual Insurance Company and all of its subsidiaries and Battle Creek Mutual Insurance Company;

•

“Nodak Mutual Group” refers to Nodak Mutual Group, Inc., which is the majority shareholder of NI Holdings;

•

the “conversion” refers to the series of transactions consummated on March 13, 2017, by which Nodak Mutual Insurance Company converted from a mutual insurance company to a stock insurance company, as Nodak Insurance Company, and became a wholly-owned subsidiary of NI Holdings, an intermediate stock holding company formed on the date of conversion;

•

“Nodak Mutual” refers to Nodak Mutual Insurance Company, the predecessor company to Nodak Insurance Company prior to the conversion;

•

“Nodak Insurance” refers to Nodak Insurance Company or Nodak Mutual Insurance Company interchangeably;

•

“members” refers to the policyholders of Nodak Insurance, who are the named insureds under insurance policies issued by Nodak Insurance;

•

“Battle Creek” refers to Battle Creek Mutual Insurance Company. Battle Creek became affiliated with Nodak Insurance in 2011, and Nodak Insurance provides underwriting, claims management, policy administration, and other administrative services to Battle Creek. Battle Creek is controlled by Nodak Insurance via a surplus note. The terms of the surplus note allow Nodak Insurance to appoint two-thirds of the Battle Creek Board of Directors;

•

“Direct Auto” refers to Direct Auto Insurance Company. On August 31, 2018, NI Holdings completed the acquisition of 100% of the common stock of Direct Auto from the private shareholders of Direct ~~Auto.~~Auto, and Direct Auto became a consolidated subsidiary of NI ~~Holdings on this date.~~Holdings. Direct Auto is a property and casualty insurance company specializing in non-standard automobile insurance in the state of Illinois;

•

“American West” refers to American West Insurance Company. American West is a wholly-owned subsidiary of Nodak Insurance;

•

“Primero” refers to Primero Insurance Company. Primero is an indirect, wholly-owned subsidiary of Nodak Insurance;

•

“Westminster” refers to Westminster American Insurance Company. On January 1, 2020, NI Holdings completed the acquisition of 100% of the common stock of Westminster from the private shareholder of ~~Westminster. The financial results~~Westminster, and Westminster became a consolidated subsidiary of ~~Westminster have been included in the Consolidated Financial Statements herein since January 1, 2020.~~NI Holdings. Westminster is a property and casualty insurance company specializing in commercial multi-peril insurance in the Mid-Atlantic states; and

•

“Nodak Agency” refers to Nodak Agency, Inc. Nodak Agency is a wholly-owned subsidiary of Nodak Insurance.

~~FORWARD-LOOKING STATEMENTS~~

This document contains forward-looking statements, which can be identified by the use of such words as “estimate”, “project”, “believe”, “could”, “may”, “intend”, “anticipate”, “plan”, “seek”, “expect” and similar expressions. These forward-looking statements include:

•

~~statements of goals, intentions, and expectations;~~

•

~~statements regarding prospects and business strategy; and~~

•

~~estimates of future costs, benefits, and results.~~

Table of Contents

~~The~~FORWARD-LOOKING STATEMENTS

This report contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may”, “will”, “should”, “likely”, “anticipates”, “expects”, “intends”, “plans”, “projects”, “believes”, “views”, “estimates”, and similar expressions are used to identify these forward-looking statements. These statements ~~are subject to numerous assumptions, risks and uncertainties, including,~~include, among other things, the ~~factors discussed under the heading “Risk Factors” in this Quarterly Report~~Company’s statements about:

•

our anticipated operating and financial performance, business plans, and prospects;

•

strategic reviews, capital allocation objectives, dividends, and share repurchases;

•

plans for and prospects of acquisitions, dispositions, and other business development activities, and our ~~Annual Report~~ability to successfully capitalize on ~~Form 10-K (“2020 Annual Report”) that could affect the actual outcome of future events.~~

~~All of~~ these ~~factors are difficult to predict and many are beyond our control. These important factors include those discussed under “Risk Factors” and those listed below:~~opportunities;

•

~~material changes to~~ the ~~federal crop insurance program;~~

•

impact of COVID-19 or a future pandemic and related economic conditions, inincluding the ~~markets in which we compete that are less favorable than expected;~~ potential impact on the Company's investments;

•

~~the effect of legislative, judicial, economic, demographic, and regulatory events in the jurisdictions where we do business;~~

•

our ability to enter new markets successfully and capitalize on growth opportunities either through acquisitions or the expansion of our ~~producer~~agent network;

•

cyclical changes in the insurance industry, competition, and innovation and emerging technologies;

•

expectations for impact of or changes to existing or new government regulations or laws;

•

our ability to ~~successfully integrate acquired businesses;~~ anticipate and respond to macroeconomic, geopolitical, health and industry trends, pandemics, acts of war, and other large-scale crises;

•

developments in general economic conditions, domestic and global financial markets, interest ~~rates,~~rate, unemployment, or inflation, that could affect the performance of our insurance operations and/or investment portfolio; and

•

heightened competition, specifically the intensification of price competition, the entry of new competitors, and the development of new products by new or existing competitors, resulting in a reduction in the demand for our products;

•

~~the impact of national or global events, including pandemics, military conflicts, and other wide-spread events;~~

•

~~estimates and adequacy of loss reserves and trends in loss and loss adjustment expenses;~~

•

~~changes in the coverage terms required by state laws with respect to minimum auto liability insurance, including higher minimum limits;~~

•

~~our inability to obtain regulatory approval of, or to implement, premium rate increases;~~

•

our ability to ~~obtain reinsurance coverage at reasonable prices or with terms~~effectively manage future growth, including additional necessary capital, systems, and personnel.

Given their nature, we cannot assure that ~~adequately protect us and to collect amounts that we believe we are entitled to under such reinsurance;~~

•

the potential impact on our reported net income that could result from the adoption of future accounting standards issued by the Securities and Exchange Commission, the Financial Accounting Standards Board,any outcome expressed in these or other ~~standard-setting bodies;~~

•

~~unanticipated changes~~forward-looking statements will be realized in ~~industry trends~~whole or in part. Actual outcomes may vary materially from past results and ~~ratings assigned~~those anticipated, estimated, implied, or projected. These forward-looking statements may be affected by ~~nationally recognized rating organizations;~~

•

~~the potential impact of fraud, operational errors, systems malfunctions,~~underlying assumptions that may prove inaccurate or ~~cybersecurity incidents;~~

•

~~adverse litigation~~incomplete, or ~~arbitration results; and~~

•

~~adverse changes in applicable laws, regulations~~by known or rules governing insurance holding companies and insurance companies, changes that affect the cost of, or demand for our products, and tax or accounting matters including limitations on premium levels, increases in minimum capital, or other financial viability requirements.

~~Because forward-looking information is subject to various~~unknown risks and uncertainties, ~~actual~~including those described in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and in the Part I, Item 1A, “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report”). The occurrence of any of the risks identified in the Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q or Part I, Item 1A, “Risk Factors” section of the 2021 Annual Report, or other risks currently unknown, could have a material adverse effect on our business, financial condition or results of operations, or we may ~~differ materially from that expressed~~be required to increase our accruals for contingencies. It is not possible to predict or ~~implied~~identify all such factors. Consequently, you should not consider such discussion to be a complete discussion of all potential risks or uncertainties.

Therefore, you are cautioned not to unduly rely on forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by ~~the forward-looking information.~~applicable securities law. You are advised, however, to consult any further disclosures we make on related subjects.

Table of Contents

PART I. - FINANCIAL INFORMATION

Item 1. - Financial Statements

NI Holdings, Inc.

Consolidated Balance Sheets

(dollar amounts in thousands, except par value)

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
	(Unaudited)						(Unaudited)
Assets:
Cash and cash equivalents	$	47,729		$	101,077		$	63,032		$	70,623
Fixed income securities, at fair value		371,416			320,410			336,099			364,651
Equity securities, at fair value		74,460			69,952			63,422			77,690
Other investments		2,071			2,924			2,005			2,005
Total cash and investments		495,676			494,363			464,558			514,969

Premiums and agents' balances receivable		82,388			48,523			108,336			51,452
Deferred policy acquisition costs		25,476			23,968			30,917			24,947
Reinsurance premiums receivable		0-			93			2,227			0-
Reinsurance recoverables on losses		42,678			8,710			17,041			21,200
Income tax recoverable		2,675			0-			8,475			364
Accrued investment income		2,213			2,141			2,551			2,524
Property and equipment		9,949			9,899			9,837			9,869
Receivable from Federal Crop Insurance Corporation		9,362			6,646
Deferred income taxes								9,025			0-
Goodwill and other intangibles		17,840			18,194			17,486			17,722
Other assets		8,229			5,066			11,136			8,735
Total assets	$	696,486		$	617,603		$	681,589		$	651,782

Liabilities:
Unpaid losses and loss adjustment expenses	$	179,576		$	105,750		$	182,876		$	139,662
Unearned premiums		137,099			119,363			173,725			127,789
Reinsurance premiums payable		1,205			0-			3,140			326
Income tax payable		0-			754
Deferred income taxes		6,100			8,757			0-			5,506
Payable to Federal Crop Insurance Corporation								7,102			4,962
Westminster consideration payable		12,920			19,287			6,454			13,020
Accrued expenses and other liabilities		15,610			14,820			35,681			13,104
Total liabilities		352,510			268,731			408,978			304,369

Commitments and contingencies		0-			0-			0-			0-

Shareholders’ equity:
Common stock, $0.01 par value, authorized: 25,000,000 shares; issued: 23,000,000 shares; and outstanding: 2021 – 21,252,305 shares, 2020 – 21,318,638 shares		230			230
Preferred stock, without par value, authorized 5,000,000 shares, 0 shares issued or outstanding		0-			0-
Common stock, $0.01 par value, authorized: 25,000,000 shares; issued: 23,000,000 shares; and outstanding: 2022 – 21,209,856 shares, 2021 – 21,219,808 shares								230			230
Preferred stock, without par value, authorized 5,000,000 shares; 0 shares issued or outstanding								0-			0-
Additional paid-in capital		97,245			97,911			96,827			98,166
Unearned employee stock ownership plan shares		(1,427	)		(1,427	)		(1,184	)		(1,184	)
Retained earnings		261,079			258,741			223,217			267,207
Accumulated other comprehensive income, net of income taxes		7,928			12,840
Treasury stock, at cost, 2021 – 1,604,955 shares, 2020 – 1,538,622 shares		(25,347	)		(23,968	)
Accumulated other comprehensive income (loss), net of income taxes								(22,482	)		5,237
Treasury stock, at cost, 2022 – 1,671,719 shares, 2021 – 1,661,767 shares								(26,569	)		(26,452	)
Non-controlling interest		4,268			4,545			2,572			4,209
Total shareholders’ equity		343,976			348,872			272,611			347,413

Total liabilities and shareholders’ equity	$	696,486		$	617,603		$	681,589		$	651,782

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended					Nine Months Ended					Three Months Ended						Six Months Ended
	September 30,					September 30,					June 30,						June 30,
	2021			2020		2021			2020		2022			2021			2022			2021
Revenues:
Net premiums earned	$	82,173		$	73,342	$	221,589		$	214,120	$	84,496		$	76,281		$	154,083		$	139,416
Fee and other income		501			524		1,338			1,332		415			520			843			837
Net investment income		1,713			1,886		4,959			5,875		2,015			1,710			3,668			3,246
Net capital gain on investments		222			5,102		10,734			1,380
Net investment gains (losses)												(11,136	)		4,701			(16,664	)		10,512
Total revenues		84,609			80,854		238,620			222,707		75,790			83,212			141,930			154,011

Expenses:
Losses and loss adjustment expenses		65,742			53,836		165,549			136,622		108,595			62,918			148,724			99,807
Amortization of deferred policy acquisition costs		12,898			15,061		46,371			39,277		16,244			19,886			31,867			33,473
Other underwriting and general expenses		12,450			7,083		23,804			22,651		10,002			3,703			17,783			11,354
Total expenses		91,090			75,980		235,724			198,550		134,841			86,507			198,374			144,634

Income (loss) before income taxes		(6,481	)		4,874		2,896			24,157		(59,051	)		(3,295	)		(56,444	)		9,377
Income tax expense (benefit)		(1,622	)		1,188		707			5,259		(12,415	)		(561	)		(11,847	)		2,329
Net income (loss)		(4,859	)		3,686		2,189			18,898		(46,636	)		(2,734	)		(44,597	)		7,048
Net income (loss) attributable to non-controlling interest		(122	)		22		(99	)		88		(726	)		(90	)		(596	)		23
Net income (loss) attributable to NI Holdings, Inc.	$	(4,737	)	$	3,664	$	2,288		$	18,810	$	(45,910	)	$	(2,644	)	$	(44,001	)	$	7,025


Earnings (loss) per common share:
Basic	$	(0.22	)	$	0.17	$	0.11		$	0.86	$	(2.15	)	$	(0.12	)	$	(2.06	)	$	0.33
Diluted	$	(0.22	)	$	0.17	$	0.11		$	0.85	$	(2.15	)	$	(0.12	)	$	(2.06	)	$	0.32

Share data:
Weighted average common shares outstanding used in basic per common share calculations		21,411,654			21,565,962		21,446,192			21,889,138		21,379,803			21,464,840			21,376,298			21,463,747
Plus: Dilutive securities		0-			189,266		223,784			149,748		0-			0-			0-			224,312
Weighted average common shares used in diluted per common share calculations		21,411,654			21,755,228		21,669,976			22,038,886		21,379,803			21,464,840			21,376,298			21,688,059

The accompanying notes are an integral part of these consolidated financial statements.

~~Unaudited~~ Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended September 30, 2021
Nine Months Ended September 30, 2021
Attributable
to NI
Holdings, Inc.
Attributable
to Non-
Controlling Interest
Total
Attributable
to NI
Holdings, Inc.
Attributable
to Non-
Controlling Interest
Total
Net income (loss)
$
(4,737
)
$
(122
)
$
(4,859
)
$
2,288
$
(99
)
$
2,189

Other comprehensive loss, before income taxes:
Holding losses on investments
(1,943
)
(58
)
(2,001
)
(5,674
)
(223
)
(5,897
)
Reclassification adjustment for net realized capital gain included in net income (loss)
(118
)
(2
)
(120
)
(544
)
(2
)
(546
)
Other comprehensive loss, before income taxes
(2,061
)
(60
)
(2,121
)
(6,218
)
(225
)
(6,443
)
Income tax benefit related to items of other comprehensive loss
433
12
445
1,306
47
1,353
Other comprehensive loss, net of income taxes
(1,628
)
(48
)
(1,676
)
(4,912
)
(178
)
(5,090
)

Comprehensive loss
$
(6,365
)
$
(170
)
$
(6,535
)
$
(2,624
)
$
(277
)
$
(2,901
)

	Three Months Ended June 30, 2022									Six Months Ended June 30, 2022
	Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total			Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total
Net income (loss)	$	(45,910	)	$	(726	)	$	(46,636	)	$	(44,001	)	$	(596	)	$	(44,597	)

Other comprehensive income (loss), before income taxes:
Holding gains (losses) on investments		(15,738	)		(650	)		(16,388	)		(35,935	)		(1,347	)		(37,282	)
Reclassification adjustment for net realized gain included in net income (loss)		105			0-			105			62			0-			62
Other comprehensive income (loss), before income taxes		(15,633	)		(650	)		(16,283	)		(35,873	)		(1,347	)		(37,220	)
Income tax benefit (expense) related to items of other comprehensive income (loss)		3,553			148			3,701			8,154			306			8,460
Other comprehensive income (loss), net of income taxes		(12,080	)		(502	)		(12,582	)		(27,719	)		(1,041	)		(28,760	)

Comprehensive income (loss)	$	(57,990	)	$	(1,228	)	$	(59,218	)	$	(71,720	)	$	(1,637	)	$	(73,357	)

Three Months Ended September 30, 2020
Nine Months Ended September 30, 2020
Attributable
to NI
Holdings, Inc.
Attributable
to Non-
Controlling Interest
Total
Attributable
to NI
Holdings, Inc.
Attributable
to Non-
Controlling Interest
Total
Net income
$
3,664
$
22
$
3,686
$
18,810
$
88
$
18,898

Other comprehensive income, before income taxes:
Holding gains on investments
2,038
11
2,049
8,851
119
8,970
Reclassification adjustment for net realized capital gain (loss) included in net income
(539
)
8
(531
)
(684
)
(2
)
(686
)
Other comprehensive income, before income taxes
1,499
19
1,518
8,167
117
8,284
Income tax expense related to items of other comprehensive income
(315
)
(4
)
(319
)
(1,715
)
(25
)
(1,740
)
Other comprehensive income, net of income taxes
1,184
15
1,199
6,452
92
6,544

Comprehensive income
$
4,848
$
37
$
4,885
$
25,262
$
180
$
25,442

	Three Months Ended June 30, 2021									Six Months Ended June 30, 2021
	Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total			Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total
Net income (loss)	$	(2,644	)	$	(90	)	$	(2,734	)	$	7,025		$	23		$	7,048

Other comprehensive income (loss), before income taxes:
Holding gains (losses) on investments		3,032			128			3,160			(3,731	)		(165	)		(3,896	)
Reclassification adjustment for net realized gain included in net income (loss)		(325	)		0-			(325	)		(426	)		0-			(426	)
Other comprehensive income (loss), before income taxes		2,707			128			2,835			(4,157	)		(165	)		(4,322	)
Income tax benefit (expense) related to items of other comprehensive income (loss)		(568	)		(27	)		(595	)		873			35			908
Other comprehensive income (loss), net of income taxes		2,139			101			2,240			(3,284	)		(130	)		(3,414	)

Comprehensive income (loss)	$	(505	)	$	11		$	(494	)	$	3,741		$	(107	)	$	3,634

The accompanying notes are an integral part of these consolidated financial statements.

~~Unaudited~~ Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

Three Months Ended September 30, 2021
Common
Stock
Additional
Paid-in
Capital
Unearned
Employee
Stock
Ownership
Plan Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Income, Net of
Income Taxes
Treasury
Stock
Non-Controlling
Interest
Total Shareholders’ Equity
Balance, July 1, 2021
$
230
$
96,729
$
(1,427)

$
265,816
$
9,556
$
(24,403)

$
4,438
$
350,939

Net loss
-
-
-
(4,737
)
-
-
(122
)
(4,859
)
Other comprehensive loss, net of income taxes
-
-
-
-
(1,628
)
-
(48
)
(1,676
)
Purchase of treasury stock
-
-
-
-
-
(944
)
-
(944)
Share-based compensation
-
516
-
-
-
-
-
516
Balance, September 30, 2021
$
230
$
97,245
$
(1,427
)
$
261,079
$
7,928
$
(25,347
)
$
4,268
$
343,976

Three Months Ended June 30, 2022
	Common Stock		Additional Paid-in Capital			Unearned Employee Stock Ownership Plan Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Income Taxes			Treasury Stock			Non- Controlling Interest			Total Shareholders’ Equity
Balance, beginning of period	$	230	$	96,517		$	(1,184	)	$	269,142		$	(10,402	)	$	(25,825	)	$	3,800		$	332,278

Net income (loss)		0-		0-			0-			(45,910	)		0-			0-			(726	)		(46,636	)
Other comprehensive income (loss), net of income taxes		0-		0-			0-			0-			(12,080	)		0-			(502	)		(12,582	)
Purchase of treasury stock		0-		0-			0-			0-			0-			(934	)		0-			(934	)
Share-based compensation		0-		486			0-			0-			0-			0-			0-			486
Issuance of vested award shares		0-		(176	)		0-			(15	)		0-			190			0-			(1	)
Balance, end of period	$	230	$	96,827		$	(1,184	)	$	223,217		$	(22,482	)	$	(26,569	)	$	2,572		$	272,611

Nine Months Ended September 30, 2021
Common
Stock
Additional
Paid-in
Capital
Unearned
Employee
Stock
Ownership
Plan Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Income, Net of
Income Taxes
Treasury
Stock
Non-Controlling
Interest
Total Shareholders’ Equity
Balance, January 1, 2021
$
230
$
97,911
$
(1,427)

$
258,741
$
12,840
$
(23,968)

$
4,545
$
348,872

Net income (loss)
-
-
-
2,288
-
-
(99
)
2,189
Other comprehensive loss, net of income taxes
-
-
-
-
(4,912
)
-
(178
)
(5,090
)
Purchase of treasury stock
-
-
-
-
-
(3,211
)
-
(3,211
)
Share-based compensation
-
1,704
-
-
-
-
-
1,704
Issuance of vested award shares
-
(2,370
)
-
50
-
1,832
-
(488
)
Balance, September 30, 2021
$
230
$
97,245
$
(1,427
)
$
261,079
$
7,928
$
(25,347
)
$
4,268
$
343,976

Six Months Ended June 30, 2022
	Common Stock		Additional Paid-in Capital			Unearned Employee Stock Ownership Plan Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Income Taxes			Treasury Stock			Non- Controlling Interest			Total Shareholders’ Equity
Balance, beginning of period	$	230	$	98,166		$	(1,184	)	$	267,207		$	5,237		$	(26,452	)	$	4,209		$	347,413

Net income (loss)		0-		0-			0-			(44,001	)		0-			0-			(596	)		(44,597	)
Other comprehensive income (loss), net of income taxes		0-		0-			0-			0-			(27,719	)		0-			(1,041	)		(28,760	)
Purchase of treasury stock		0-		0-			0-			0-			0-			(1,931	)		0-			(1,931	)
Share-based compensation		0-		1,051			0-			0-			0-			0-			0-			1,051
Issuance of vested award shares		0-		(2,390	)		0-			11			0-			1,814			0-			(565	)
Balance, end of period	$	230	$	96,827		$	(1,184	)	$	223,217		$	(22,482	)	$	(26,569	)	$	2,572		$	272,611

The accompanying notes are an integral part of these consolidated financial statements.

Three Months Ended September 30, 2020
Common
Stock
Additional
Paid-in
Capital
Unearned
Employee
Stock
Ownership
Plan Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Income, Net of
Income Taxes
Treasury
Stock
Non-Controlling
Interest
Total Shareholders’ Equity
Balance, July 1, 2020
$
230
$
96,661
$
(1,671
)
$
233,498
$
10,880
$
(18,517
)
$
3,642
$
324,723

Net income
-
-
-
3,664
-
-
22
3,686
Other comprehensive income, net of income taxes
-
-
-
-
1,184
-
15
1,199
Purchase of treasury stock
-
-
-
-
-
(4,580
)
-
(4,580)
Share-based compensation
-
485
-
-
-
-
-
485
Balance, September 30, 2020
$
230
$
97,146
$
(1,671
)
$
237,162
$
12,064
$
(23,097
)
$
3,679
$
325,513

Three Months Ended June 30, 2021
	Common Stock		Additional Paid-in Capital			Unearned Employee Stock Ownership Plan Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Income Taxes		Treasury Stock			Non- Controlling Interest			Total Shareholders’ Equity
Balance, beginning of period	$	230	$	96,511		$	(1,427	)	$	268,444		$	7,417	$	(23,012	)	$	4,427		$	352,590

Net income (loss)		0-		0-			0-			(2,644	)		0-		0-			(90	)		(2,734	)
Other comprehensive income (loss), net of income taxes		0-		0-			0-			0-			2,139		0-			101			2,240
Purchase of treasury stock		0-		0-			0-			0-			0-		(1,671	)		0-			(1,671	)
Share-based compensation		0-		516			0-			0-			0-		0-			0-			516
Issuance of vested award shares		0-		(298	)		0-			16			0-		280			0-			(2	)
Balance, end of period	$	230	$	96,729		$	(1,427	)	$	265,816		$	9,556	$	(24,403	)	$	4,438		$	350,939

Nine Months Ended September 30, 2020
Common
Stock
Additional
Paid-in
Capital
Unearned
Employee
Stock
Ownership
Plan Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Income, Net of
Income Taxes
Treasury
Stock
Non-Controlling
Interest
Total Shareholders’ Equity
Balance, January 1, 2020
$
230
$
95,961
$
(1,671
)
$
218,480
$
5,612
$
(12,308
)
$
3,499
$
309,803

Net income
-
-
-
18,810
-
-
88
18,898
Other comprehensive income, net of income taxes
-
-
-
-
6,452
-
92
6,544
Purchase of treasury stock
-
-
-
-
-
(11,363
)
-
(11,363
)
Share-based compensation
-
1,662
-
-
-
-
-
1,662
Issuance of vested award shares
-
(477
)
-
(128
)
-
574
-
(31
)
Balance, September 30, 2020
$
230
$
97,146
$
(1,671
)
$
237,162
$
12,064
$
(23,097
)
$
3,679
$
325,513

Six Months Ended June 30, 2021
	Common Stock		Additional Paid-in Capital			Unearned Employee Stock Ownership Plan Shares			Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net of Income Taxes			Treasury Stock			Non- Controlling Interest			Total Shareholders’ Equity
Balance, beginning of period	$	230	$	97,911		$	(1,427	)	$	258,741	$	12,840		$	(23,968	)	$	4,545		$	348,872

Net income (loss)		0-		0-			0-			7,025		0-			0-			23			7,048
Other comprehensive income (loss), net of income taxes		0-		0-			0-			0-		(3,284	)		0-			(130	)		(3,414	)
Purchase of treasury stock		0-		0-			0-			0-		0-			(2,267	)		0-			(2,267	)
Share-based compensation		0-		1,188			0-			0-		0-			0-			0-			1,188
Issuance of vested award shares		0-		(2,370	)		0-			50		0-			1,832			0-			(488	)
Balance, end of period	$	230	$	96,729		$	(1,427	)	$	265,816	$	9,556		$	(24,403	)	$	4,438		$	350,939

The accompanying notes are an integral part of these consolidated financial statements.

	Nine Months Ended September 30,						Six Months Ended June 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income	$	2,189		$	18,898
Adjustments to reconcile net income to net cash flows from operating activities:
Net capital gain on investments		(10,734	)		(1,380	)
Deferred income tax benefit		(1,304	)		(511	)
Net income (loss)							$	(44,597	)	$	7,048
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Net investment losses (gains)								16,664			(10,512	)
Deferred income tax expense (benefit)								(6,069	)		197
Depreciation of property and equipment		503			545			344			341
Amortization of intangibles		354			4,781			236			236
Share-based compensation		1,704			1,662			1,051			1,188
Amortization of deferred policy acquisition costs		46,371			39,277			31,867			33,473
Deferral of policy acquisition costs		(47,879	)		(47,763	)		(37,837	)		(39,162	)
Net amortization of premiums and discounts on investments		1,546			1,031			885			1,024
Loss on sale of property and equipment		4			7
Loss (gain) on sale of property and equipment								(186	)		4
Changes in operating assets and liabilities:
Premiums and agents’ balances receivable		(33,865	)		(39,670	)		(56,884	)		(35,940	)
Reinsurance premiums receivable / payable		1,298			438			587			2,739
Reinsurance recoverables on losses		(33,968	)		(8,748	)		4,159			(15,864	)
Accrued investment income		(72	)		64			(27	)		(335	)
Receivable from Federal Crop Insurance Corporation		(2,716	)		4,711
Federal Crop Insurance Corporation receivable / payable								2,140			(10,545	)
Income tax recoverable / payable		(3,429	)		(2,050	)		(8,111	)		(3,303	)
Other assets		(3,163	)		753			(2,401	)		(3,120	)
Unpaid losses and loss adjustment expenses		73,826			32,985			43,214			46,590
Unearned premiums		17,736			20,079			45,936			42,229
Accrued expenses and other liabilities		1,088			5,835			22,676			5,420
Net cash flows from operating activities		9,489			30,944			13,647			21,708

Cash flows from investing activities:
Proceeds from maturities and sales of fixed income securities		54,492			67,029			31,846			35,483
Proceeds from sales of equity securities		26,790			13,176			7,837			17,247
Purchases of fixed income securities		(112,940	)		(73,502	)		(41,461	)		(89,729	)
Purchases of equity securities		(21,091	)		(15,630	)		(10,171	)		(15,559	)
Purchases of property and equipment		(557	)		(489	)		(126	)		(417	)
Acquisition of Westminster American Insurance Company (cash consideration paid net of cash and cash equivalents acquired)		0-			(703	)
Proceeds from sale of other investments and other		835			(258	)		0-			835
Net cash flows from investing activities		(52,471	)		(10,377	)		(12,075	)		(52,140	)

Cash flows from financing activities:
Purchases of treasury stock		(3,211	)		(11,363	)		(1,931	)		(2,267	)
Installment payment on Westminster consideration payable		(6,667	)		0-			(6,667	)		(6,667	)
Issuance of restricted stock awards		(488	)		(31	)		(565	)		(488	)
Net cash flows from financing activities		(10,366	)		(11,394	)		(9,163	)		(9,422	)

Net (decrease) increase in cash and cash equivalents		(53,348	)		9,173
Net decrease in cash and cash equivalents								(7,591	)		(39,854	)

Cash and cash equivalents at beginning of period		101,077			62,132			70,623			101,077

Cash and cash equivalents at end of period	$	47,729		$	71,305		$	63,032		$	61,223


Non-cash item: Present value of installment payable issued in connection with acquisition of Westminster American Insurance Company	$	0-		$	18,787

Federal and state income taxes paid	$	5,440		$	7,819		$	2,360		$	5,435

The accompanying notes are an integral part of these consolidated financial statements.

NI Holdings is a North Dakota business corporation that is the stock holding company of Nodak Insurance ~~Company~~ and became such in connection with the conversion of Nodak Mutual Insurance Company from a mutual to stock form of organization and the creation of a mutual holding company. The conversion was consummated on March 13, 2017. Immediately following the conversion, all of the outstanding shares of common stock of Nodak Insurance ~~Company (the successor to Nodak Mutual Insurance Company)~~ were issued to Nodak Mutual Group, ~~Inc.,~~ which then contributed the shares to NI Holdings in exchange for ~~55%~~55% of the outstanding shares of common stock of NI Holdings. Nodak Insurance ~~Company~~ then became a wholly-owned stock subsidiary of NI Holdings. Prior to completion of the conversion, NI Holdings conducted no business and had no assets or liabilities. As a result of the conversion, NI Holdings became the holding company for Nodak Insurance ~~Company~~ and its existing subsidiaries. ~~The newly issued shares of NI Holdings became available for public trading on March 16, 2017.~~

These Unaudited Consolidated Financial Statements include the financial position and results of NI Holdings and seven other entities:

Nodak Insurance is the largest domestic property and casualty insurance company in North ~~Dakota. Nodak Insurance was incorporated on April 15, 1946 under the laws of North~~ Dakota, ~~and benefits from a strong marketing affiliation with the North Dakota Farm Bureau (“NDFB”). Nodak Insurance offers~~offering private passenger auto, homeowners, farmowners, commercial multi-peril, crop hail, and Federal multi-peril crop insurance coverages through its captive ~~agents.~~agents in the state.

Nodak Agency ~~a wholly-owned subsidiary of Nodak Insurance,~~ is an inactive shell corporation.

American West ~~a wholly-owned subsidiary of Nodak Insurance,~~ is a property and casualty insurance company licensed in eight states in the Midwest and Western regions of the United States. American West began writing policies in 2002 and primarily writes personal auto, homeowners, and farm coverages in South Dakota. American West also writes personal auto coverage in North Dakota, as well as crop hail and Federal multi-peril crop insurance coverages in Minnesota and South Dakota.

Primero is a wholly-owned subsidiary of Tri-State, Ltd. Tri-State, Ltd. is an inactive shell corporation ~~100%~~100% owned by Nodak Insurance. Primero is a property and casualty insurance company ~~which writes~~writing non-standard automobile coverage in the states of Nevada, Arizona, North Dakota, and South Dakota.

Battle Creek is a property and casualty insurance company writing personal auto, homeowners, and farm coverages solely in the state of Nebraska. Battle Creek became affiliated with Nodak Insurance in 2011, and Nodak Insurance provides underwriting, claims management, policy administration, and other administrative services to Battle Creek. Because we have concluded that we control Battle Creek, we consolidate the financial statements of Battle Creek, and Battle Creek’s policyholders’ interest in Battle Creek is ~~controlled by Nodak~~reflected as a non-controlling interest in shareholders’ equity in our Unaudited Consolidated Balance Sheets and its net income or loss is excluded from net income or loss attributed to NI Holdings in our Unaudited Consolidated Statements of Operations.

Direct Auto Insurance ~~via a surplus note. The terms of the surplus note allow Nodak Insurance to appoint two-thirds of the Battle Creek Board of Directors. Battle Creek~~Company

Direct Auto is a property and casualty insurance ~~company writing personal auto, homeowners, and farm coverages in Nebraska.~~

~~Direct Auto, a wholly-owned subsidiary of NI Holdings, is a property and casualty~~ company licensed in Illinois. Direct Auto began writing non-standard automobile coverage in 2007, and was acquired by NI Holdings on August 31, 2018, via a stock purchase agreement.

Westminster ~~a wholly-owned subsidiary of NI Holdings,~~ is a property and casualty insurance company licensed in seventeen states and the District of Columbia. Westminster ~~is headquartered in Owings Mills, Maryland and~~ underwrites commercial multi-peril insurance in the states of Delaware, Georgia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia, West Virginia, and the District of Columbia. Westminster was acquired by NI Holdings on January 1, 2020, via a stock purchase agreement. ~~The financial results~~

Notes to Consolidated Financial Statements ~~and the Company’s commercial segment following the acquisition close date. See Note 3.~~(Unaudited)

Nodak Insurance markets and distributes its policies through its captive agents, while all other companies utilize the independent agent distribution channel. Additionally, all of the Company’s insurance subsidiary and affiliate companies are rated “A” Excellent by A.M. Best Company, Inc. (“AM ~~Best.~~

The same executive management team provides oversight and strategic direction for the entire organization. Nodak Insurance provides common product oversight, pricing practices, and underwriting standards, as well as underwriting and claims administration, to itself, American West, and Battle Creek. Primero, Direct Auto, and Westminster personnel manage the day-to-day operations of their respective companies.

The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and are unaudited. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All material intercompany transactions and balances have been eliminated. These financial statements should be read in conjunction with the financial statements and notes thereto included in our 2021 Annual ~~Report on Form 10-K for the year ended~~Report.

The Consolidated Balance Sheet at December 31, ~~2020 (“2020 Annual Report”).~~2021, has been derived from the Audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

The preparation of the interim Unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim Unaudited Consolidated Financial Statements and the reported amounts of revenues, claims, and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the interim ~~periods~~period ended ~~September~~June 30, ~~2021~~2022, are not necessarily indicative of the results that may be expected for the year ended December 31, ~~2021.~~2022.

Our Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries, as well as Battle Creek, an entity we control via contract. The terms “we”, “us”, “our”, or “the Company” as used herein refer to the consolidated entity.

~~Our 2020~~2021 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition, and liquidity. The accounting policies and estimation processes described in the ~~2020~~2021 Annual Report were consistently applied to the Unaudited Consolidated Financial Statements as of and for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021.

As an emerging growth company (“EGC”), we have elected to use the extended transition period for complying with any new or revised financial accounting standards from the Financial Accounting Standards Board (“FASB”) pursuant to Section 13(a) of the Exchange Act. The following discussion includes effective dates for both public business entities and ~~emerging growth companies,~~EGCs, as well as whether specific guidance may be adopted early.

In January 2020, the Company adopted amended guidance from the FASB that shortened the amortization period of premiums on certain fixed income securities held at a premium to the earliest call date rather than through the maturity date of the callable security. The adoption of this guidance did not materially impact the Company’s financial position, results of operations, or cash flows.

In March 2020, the Company adopted modified disclosure requirements from the FASB relating to the fair value of assets and liabilities. The modifications primarily related to Level 3 fair value measurements. The Company does not currently carry any Level 3 assets or liabilities. As a result, there was no impact to the Company’s financial statement disclosures.

In February 2016, the FASB issued new guidance that requires lessees to recognize leases, including operating leases, on the lessee’s Consolidated Balance Sheet, unless a lease is considered a short-term lease. The new guidance also requires entities to make new judgments to identify leases. In July 2018, the FASB issued additional guidance to allow an optional transition method. An entity may apply the new leases guidance at the beginning of the earliest period presented in the financial statements, or at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ~~The~~

The new guidance was effective for annual and interim reporting periods beginning after December 15, 2018, for public business entities. For private companies and ~~emerging growth companies,~~EGCs, this guidance is effective for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. ~~Early adoption is permitted for all entities.~~We will adopt this guidance in the fourth quarter of the year ended December 31, 2022, as we will lose our EGC status beginning December 31, 2022. We do not expect the adoption of this new guidance to have a significant impact on our financial position, results of operations, or cash flows. Upon adoption, the Company will recognize a right of use asset and operating lease liability on its Consolidated Balance Sheet. The cumulative adjustment to retained earnings is not expected to be significant.

In June 2016, the FASB issued a new standard that requires timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance also requires financial institutions and other organizations to use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied prior to adoption of this standard are still permitted, although the inputs to those techniques have changed to reflect the full amount of expected credit losses. Organizations are to continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Additionally, the guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Finally, the guidance amends the accounting for credit losses on available-for-sale fixed income securities and purchased financial assets with credit deterioration. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, for filers with the Securities and Exchange Commission (“SEC”) excluding smaller reporting companies, and ~~emerging growth companies~~EGCs that did not relinquish private company relief. For all other entities, this guidance will be effective for annual reporting periods beginning after December 15, 2022, and interim periods within those fiscal years. ~~Early adoption is permitted for all entities.~~We will adopt this guidance in the fourth quarter of the year ended December 31, 2022, as we will lose our EGC status beginning December 31, 2022. Based on our evaluation, adoption of this new standard will not have a significant impact on our financial position, results of operations, and cash flows.

In December 2019, the FASB issued amended guidance to simplify the accounting for income taxes. The amended guidance was effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, for public business entities. For private companies and ~~emerging growth companies,~~EGCs, the amended guidance will be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. ~~Early~~We will adopt this guidance in the fourth quarter of the year ended December 31, 2022, as we will lose our EGC status beginning December 31, 2022. Based on our evaluation, adoption ~~is permitted, including adoption in an interim period. We are evaluating the impact~~of this new ~~guidance~~standard will not have a significant impact on our financial position, results of operations, and cash flows.

On January 1, 2020, the Company completed the acquisition of 100% of the common stock of Westminster from the private shareholder of Westminster, and Westminster became a consolidated subsidiary of the Company.

We account for business acquisitions in accordance with the acquisition method of accounting, which requires, among other things, that most assets acquired, liabilities assumed, and contingent consideration be recognized at their fair values as of the acquisition date, which was the closing date for the Westminster transaction. During the measurement period, adjustments to provisional purchase price allocations are recognized if new information is obtained about the facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as it is determined that no more information is obtainable, but in no case shall the measurement period exceed one year from the acquisition date. The measurement period for the Westminster acquisition ended December 31, 2020.

~~The Company incurred acquisition-related costs of $828 and $83 during the years ended December 31, 2020, and 2019, respectively.~~

The Company paid $20,000 in cash consideration to the private shareholder of Westminster as of the closing date, with an additional $20,000 to be paid in 3 equal annual installments. The acquisition of Westminster did not include any contingent consideration other than a provision regarding future changes to federal income tax rates. The first installment of the additional consideration was paid during the first quarter of 2021.

~~The following table summarizes the consideration transferred to acquire Westminster and the amounts of identified assets acquired and liabilities assumed at the acquisition date:~~

The fair value of the assets acquired included premiums and agents’ balances receivable of $8,507 and reinsurance recoverables on losses of $763. These are the gross amounts due from policyholders and reinsurers, respectively, none of which were anticipated to be uncollectible. The Company did not acquire any other material receivables as a result of the acquisition of Westminster.

The fair values of the acquired distribution network, state insurance licenses, Westminster trade name, and value of business acquired (“VOBA”) intangible assets were $6,700, $1,800, $500, and $4,750, respectively. The state insurance license intangible has an indefinite life, while the other intangible assets are being amortized over useful lives of up to twenty years. The goodwill is not deductible for income tax purposes.

The amortized cost and estimated fair value of fixed income securities as of ~~September~~June 30, ~~2021~~2022, and December 31, ~~2020,~~2021, were as follows:

The amortized cost and estimated fair value of fixed income securities by contractual maturity are shown below. Actual maturities could differ from contractual maturities because issuers ~~of the securities~~ may have the right to call or prepay ~~certain obligations, which may or may not include call or prepayment penalties.~~these securities.

Fixed income securities with a fair value of ~~$8,016~~$6,773 at ~~September~~June 30, ~~2021~~2022, and ~~$6,093~~$7,977 at December 31, ~~2020,~~2021, were deposited with various state regulatory agencies as required by law. The Company has not pledged any assets to secure any obligations.

The investment category and duration of the Company’s gross unrealized losses on fixed income securities ~~were as follows:~~

are shown below. Investments with unrealized losses are categorized with a duration of greater than 12 months when all positions of a security have continually been in a loss position for at least 12 months.

We frequently review our investment portfolio for declines in fair value. Our process for identifying declines in the fair value of investments that are ~~other than temporary~~other-than-temporary involves consideration of several factors. These factors include (i) the time period in which there has been a significant decline in value, (ii) an analysis of the liquidity, business prospects, and overall financial condition of the issuer, (iii) the significance of the decline, and (iv) our intent and ability to hold the investment for a sufficient period of time for the value to recover. When our analysis of the above factors results in the conclusion that declines in fair values are other than temporary, the credit loss component of the impairment is reflected in net income (loss) as a realized ~~capital~~ loss on investment if the Company does not intend to sell the security, and the remaining portion of the other-than-temporary loss is recognized in other comprehensive income (loss), net of income taxes. If the Company intends to sell the security, or determines that it is more likely than not that it will be required to sell the security prior to recovering its cost or amortized cost basis less any current-period credit losses, the full amount of the other-than-temporary loss is recognized in net income (loss).

~~As of September~~ The Company did not record any other-than-temporary impairments during the three- or six-month periods ending June 30, ~~2021, we held 168 fixed income securities with unrealized losses. As of~~2022, or the year ended December 31, 2020, we held 67 fixed income securities with unrealized losses. In conjunction with our outside investment advisors, we analyzed the credit ratings of the securities as well as the historical monthly amortized cost to fair value ratio of securities in an unrealized loss position. This analysis yielded no fixed income securities which had fair values less than 80% of amortized cost for the preceding 12-month period.2021.

The Company did not record any other-than-temporary impairments during the three- or nine-month periods ended September 30, 2021 and 2020. For the year ended December 31, 2020, the Company also did not recognize any other-than-temporary impairments of its investment securities. Adverse investment market conditions, in addition to poor operating results of underlying investments, could result in impairment charges in the future.

Net investment income ~~was attributable to the following types of securities:~~

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Investment securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other assets or liabilities at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual assets. Accounting guidance on fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The three levels of the fair value hierarchy are as follows:

~~Level I: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.~~

The Company bases its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets where there exists limited or no observable market data and, therefore, are based primarily upon the estimates of the Company or other third-parties, ~~and~~ are often calculated based on the characteristics of the asset, the economic and competitive environment, and other such factors. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts which could have been realized in a sale transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective period-end and have not been re-evaluated or updated for purposes of our financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end. Additionally, changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future valuations.

The Company uses quoted values and other data provided by an independent pricing service in its process for determining fair values of its investments. The evaluations of such pricing services represent an exit price and a good faith opinion as to what a buyer in the marketplace would pay for a security in a current sale. This independent pricing service provides us with one quote per instrument. For fixed income securities that have quoted prices in active markets, market quotations are provided. For fixed income securities that do not trade on a daily basis, the independent pricing service prepares estimates of fair value using a wide array of observable inputs including relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. The observable market inputs that the Company’s independent pricing service utilizes may include (listed in order of priority for use) benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, and other reference data on markets, industry, and the economy. Additionally, the independent pricing service uses an option-adjusted spread model to develop prepayment and interest rate scenarios. The independent pricing service did not use broker quotes in determining any fair values of the Company’s investments at ~~September~~June 30, ~~2021~~2022, or December 31, ~~2020.~~2021.

Should the independent pricing service be unable to provide a fair value estimate, we would attempt to obtain a non-binding fair value estimate from a number of broker-dealers and would review this estimate in conjunction with a fair value estimate reported by an independent business news service or other sources. In instances where only one broker-dealer provides a fair value for a fixed income security, we would use that estimate. In instances where we would be able to obtain fair value estimates from more than one broker-dealer, we would review the range of estimates and select the most appropriate value based on the facts and circumstances. Should neither the independent pricing service nor a broker-dealer provide a fair value estimate, we would develop a fair value estimate based on cash flow analyses and other valuation techniques that utilize certain unobservable inputs. Accordingly, the Company classifies such a security as a Level III investment.

The fair value estimates of the Company’s investments provided by the independent pricing service at each period-end were utilized, among other resources, in reaching a conclusion as to the fair value of its investments.

Management reviews the reasonableness of the pricing provided by the independent pricing service by employing various analytical procedures. Management reviews all securities to identify recent downgrades, significant changes in pricing, and pricing

anomalies on individual securities relative to other similar securities. This will include looking for relative consistency across securities in common sectors, durations, and credit ratings. This review will also include all fixed income securities rated lower than “A” by Moody’s Investors Service, Inc. or Standard & ~~Poor’s.~~Poor’s Financial Services LLC. If, after this review, management does not believe the pricing for any security is a reasonable estimate of fair value, then it will seek to resolve the discrepancy through discussions with the pricing service. In its review, management did not identify any such discrepancies and no adjustments were made to the estimates provided by the pricing service for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2021,~~2022, or the year ended December 31, ~~2020.~~2021. The classification within the fair value hierarchy is then confirmed based on the final conclusions from the pricing review.

The valuation of cash equivalents and equity securities are generally based on Level I inputs, which use the market-approach valuation technique. The valuation of our fixed income securities generally incorporates significant Level II inputs using the market and income approach techniques. We may assign a lower level to inputs typically considered to be Level II based on our assessment of liquidity and relative level of uncertainty surrounding inputs. There were no assets or liabilities classified at Level III at June 30, 2022, or December 31, 2021.

The following tables set forth our assets which are measured at fair value on a recurring basis by the level within the fair value hierarchy in which fair value measurements fall:

	September 30, 2021								June 30, 2022
	Total		Level I		Level II		Level III		Total		Level I		Level II		Level III
Fixed income securities:
U.S. Government and agencies	$	14,115	$	0-	$	14,115	$	0-	$	12,394	$	0-	$	12,394	$	0-
Obligations of states and political subdivisions		73,161		0-		73,161		0-		60,772		0-		60,772		0-
Corporate securities		156,159		0-		156,159		0-		145,778		0-		145,778		0-
Residential mortgage-backed securities		42,955		0-		42,955		0-		39,826		0-		39,826		0-
Commercial mortgage-backed securities		33,908		0-		33,908		0-		31,200		0-		31,200		0-
Asset-backed securities		51,118		0-		51,118		0-		42,069		0-		42,069		0-
Redeemable preferred stock										4,060		0-		4,060		0-
Total fixed income securities		371,416		0-		371,416		0-		336,099		0-		336,099		0-

Equity securities:
Basic materials		1,073		1,073		0-		0-
Communications		7,580		7,580		0-		0-
Consumer, cyclical		10,911		10,911		0-		0-
Consumer, non-cyclical		16,386		16,386		0-		0-
Energy		2,716		2,716		0-		0-
Financial		4,165		4,165		0-		0-
Industrial		14,292		14,292		0-		0-
Technology		17,337		17,337		0-		0-
Common stock										61,573		61,573		0-		0-
Non-redeemable preferred stock										1,849		1,849		0-		0-
Total equity securities		74,460		74,460		0-		0-		63,422		63,422		0-		0-

Cash equivalents		30,529		30,529		0-		0-		35,142		35,142		0-		0-
Total assets at fair value	$	476,405	$	104,989	$	371,416	$	0-	$	434,663	$	98,564	$	336,099	$	0-

	December 31, 2020								December 31, 2021
	Total		Level I		Level II		Level III		Total		Level I		Level II		Level III
Fixed income securities:
U.S. Government and agencies	$	14,383	$	0-	$	14,383	$	0-	$	13,498	$	0-	$	13,498	$	0-
Obligations of states and political subdivisions		64,244		0-		64,244		0-		87,294		0-		87,294		0-
Corporate securities		128,434		0-		128,434		0-		147,621		0-		147,621		0-
Residential mortgage-backed securities		36,494		0-		36,494		0-		26,156		0-		26,156		0-
Commercial mortgage-backed securities		25,655		0-		25,655		0-		33,532		0-		33,532		0-
Asset-backed securities		51,200		0-		51,200		0-		52,422		0-		52,422		0-
Redeemable preferred stock										4,128		0-		4,128		0-
Total fixed income securities		320,410		0-		320,410		0-		364,651		0-		364,651		0-

Equity securities:
Basic materials		1,285		1,285		0-		0-
Communications		7,455		7,455		0-		0-
Consumer, cyclical		9,929		9,929		0-		0-
Consumer, non-cyclical		14,633		14,633		0-		0-
Energy		1,499		1,499		0-		0-
Financial		6,235		6,235		0-		0-
Industrial		12,733		12,733		0-		0-
Technology		16,145		16,145		0-		0-
Utility		38		38
Common Stock										75,143		75,143		0-		0-
Non-redeemable preferred stock										2,547		2,547		0-		0-
Total equity securities		69,952		69,952		0-		0-		77,690		77,690		0-		0-

Cash equivalents		65,354		65,354		0-		0-		45,741		45,741		0-		0-
Total assets at fair value	$	455,716	$	135,306	$	320,410	$	0-	$	488,082	$	123,431	$	364,651	$	0-

There were no liabilities measured at fair value on a recurring basis at ~~September~~June 30, ~~2021~~2022, or December 31, ~~2020.~~2021.

The Company cedes and assumes certain premiums and losses to and from various companies and associations under a variety of reinsurance agreements. The Company seeks to limit the maximum net loss that can arise from large risks or risks in concentrated areas of exposure through use of these agreements, either on an automatic basis under general reinsurance contracts known as treaties or through facultative contracts on substantial individual risks.

Reinsurance contracts do not relieve the Company from its obligation to policyholders. Additionally, failure of reinsurers to honor their obligations could result in significant losses to us. There can be no assurance that reinsurance will continue to be available to us at the same extent, and at the same cost, as it has in the past. The Company may choose in the future to reevaluate the use of reinsurance to increase or decrease the amounts of risk ceded to reinsurers.

During the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2021,~~2022, the Company retained the first ~~$10,000~~$15,000 of weather-related losses from catastrophic events and had reinsurance under various reinsurance agreements up to ~~$117,000~~$125,000 in excess of its ~~$10,000~~$15,000 retained risk. The Company experienced multiple severe weather events during the second quarter of 2022 with none of these events exceeding the retention level during the current quarter.

During the year ended December 31, ~~2020,~~2021, the Company retained the first ~~$10,000~~$10,000 of weather-related losses from catastrophic events and had reinsurance under various reinsurance agreements up to ~~$97,000~~$117,000 in excess of its ~~$10,000~~$10,000 retained risk. The Company experienced one catastrophe event during the second quarter of 2021 in excess of the retention level.

The Company actively monitors and evaluates the financial condition of the reinsurers and develops estimates of the uncollectible amounts due from reinsurers. Such estimates are made based on periodic evaluation of balances due from reinsurers, judgments regarding reinsurers’ solvency, known disputes, reporting characteristics of the underlying reinsured business, historical experience, current economic conditions, and the state of reinsurer relations in general. Collection risk is mitigated from reinsurers by entering into reinsurance arrangements only with reinsurers that have strong credit ratings and statutory surplus above certain levels. The Company’s reinsurance recoverables on paid and unpaid losses were due from reinsurance companies with ~~A.M.~~AM Best ratings of “A” or higher.

A reconciliation of direct to net premiums on both a written and an earned basis is as follows:

A reconciliation of direct to net losses and loss adjustment expenses is as follows:

If ~~100%~~100% of our ceded reinsurance was cancelled as of ~~September~~June 30, ~~2021~~2022, or December 31, ~~2020,~~2021, no ceded commissions would need to be returned to the reinsurers. Reinsurance contracts are typically effective from January 1 through December 31 each year.

Expenses directly related to successfully acquired insurance policies, primarily commissions, premium taxes and underwriting costs, are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation:

Activity in the liability for unpaid losses and loss adjustment expenses ~~(“LAE”)~~ is summarized as follows:

During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company’s reported incurred losses and ~~LAE~~loss adjustment expenses included ~~$6,894~~$8,490 of net favorable development on prior accident years, ~~compared~~primarily attributable to ~~$4,268~~Direct Auto, Battle Creek, and American West. During the six months ended June 30, 2021, the Company’s incurred reported losses and loss adjustment expenses included $2,197 of net favorable development on prior accident years, ~~during the nine months ended September 30, 2020. The net favorable development on prior accident years through September 30, 2021 was~~ primarily ~~driven by favorable development in the non-standard auto segment~~attributable to Nodak Insurance, Direct Auto, and ~~to a lesser extent, the private passenger auto and home and farm segments.~~

Increases and decreases are generally the result of ongoing analysis of loss development trends. As additional information becomes known regarding individual claims, original estimates are increased or decreased accordingly.

~~The Company’s liabilities for unpaid losses~~8.Property and ~~LAE are summarized below:~~Equipment

~~The following table provides case~~Depreciation expense was $176 and ~~IBNR reserves~~$171 for ~~unpaid losses~~the three months ended June 30, 2022 and ~~LAE by segment.~~2021, respectively, and $344 and $341 for the six months ended June 30, 2022 and 2021, respectively.

~~Depreciation expense was $162 and $180 for the three months ended September 30, 2021 and 2020, respectively, and $503 and $545 for the nine months ended September 30, 2021 and 2020, respectively.~~

The following table presents the carrying amount of the Company’s goodwill by segment:

The following table presents the carrying amount of the Company’s other intangible assets:

Amortization expense was ~~$118~~$118 and ~~$1,070~~$118 for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$354~~$236 and ~~$4,781~~$236 for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Other intangible assets that have finite lives, including trade names and distribution networks, are amortized over their useful lives. As of ~~September~~June 30, ~~2021,~~2022, the estimated amortization of other intangible assets with finite lives for the next five years ~~in the period ended December 31, 2025,~~ and thereafter is as follows:

Effective January 1, 2020, all of our insurance subsidiary and affiliate companies entered into an intercompany reinsurance pooling agreement. This agreement was finalized, approved, and implemented during the fourth quarter of 2020, retroactive to the January 1 effective date. Nodak Insurance is the lead company of the pool, and assumes the net premiums, net losses, and underwriting expenses from each of the other five companies. Nodak Insurance then retrocedes balances back to each company, while retaining its own share of the pool’s net underwriting results, based on individual pool percentages established in the respective pooling agreement. This arrangement allows each insurance company to rely upon the capacity of the pool’s total statutory capital and surplus. As a result, they are evaluated by AM Best on a group basis and hold a single combined financial strength rating, long-term issuer credit rating, and financial size category.

In connection with the pooling agreement, the quota share agreement between Battle Creek and Nodak Insurance was cancelled. As a result, the Company’s consolidated financial position and results of operations are impacted by the portion of Battle Creek’s underwriting results that are allocated to the policyholders of Battle Creek rather than the shareholders of NI Holdings.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, and the year ended December 31, ~~2020,~~2021, the pooling share percentages by insurance company were:

We were organized by the ~~NDFB~~North Dakota Farm Bureau (“NDFB”) to provide insurance protection for its members. We have a royalty agreement with the NDFB that recognizes the use of their trademark and provides royalties to the NDFB based on the premiums written on Nodak Insurance’s ~~insurance~~ policies. Royalties paid to the NDFB were ~~$370~~$405 and ~~$386~~$395 during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$1,102~~$744 and ~~$1,115~~$732 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Royalty amounts payable of ~~$38~~$151 and ~~$113~~$144 were accrued as a liability to the NDFB at ~~September~~June 30, ~~2021~~2022, and December 31, ~~2020,~~2021, respectively.

State insurance laws require our insurance subsidiaries to maintain certain minimum capital and surplus amounts on a statutory basis. Our insurance subsidiaries are subject to regulations that restrict the payment of dividends from statutory surplus and

may require prior approval from their domiciliary insurance regulatory authorities. Our insurance subsidiaries are also subject to risk-based capital (“RBC”) requirements that may further affect their ability to pay dividends. Our insurance subsidiaries statutory capital and surplus at December 31, ~~2020~~2021, exceeded the amount of statutory capital and surplus necessary to satisfy regulatory requirements, including the RBC requirements, by a significant margin.

The amount available for payment of dividends from Nodak Insurance to NI Holdings during ~~2021~~2022 without the prior approval of the North Dakota Insurance Department is ~~$21,628~~$21,493 based upon the surplus of Nodak Insurance at December 31, ~~2020.~~2021. Prior to its payment of any ~~extraordinary~~ dividend, Nodak Insurance will be required to provide notice of the dividend to the North Dakota Insurance Department. This notice must be provided to the North Dakota Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend. The North Dakota Insurance Department has the power to limit or prohibit dividend payments if Nodak Insurance is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity. No dividends were declared or paid by Nodak Insurance during the ~~nine~~six months ended ~~September~~June 30, ~~2021. The Board of Directors of Nodak Insurance declared and paid a $6,000 dividend to NI Holdings during~~2022, or the year ended December 31, ~~2020.~~2021.

Direct Auto was re-domesticated from Illinois to North Dakota during 2021, and is now subject to the same dividend restrictions as Nodak Insurance. The amount available for payment of dividends from Direct Auto to NI Holdings during ~~2021~~2022 without the prior approval of the ~~Illinois~~North Dakota Insurance Department ~~of Insurance~~ is ~~$3,582~~$3,796 based upon the surplus of Direct Auto at December 31, 2020. Prior to its payment of any dividend, Direct Auto will be required to provide notice of the dividend to the Illinois Department of Insurance. This notice must be provided to the Illinois Department of Insurance within five business days following declaration of any dividend and no less than 30 days prior to the payment of an extraordinary dividend or 10 days prior to the payment of an ordinary dividend. The Illinois Department of Insurance has the power to limit or prohibit dividend payments if Direct Auto is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity.2021. No dividends were declared or paid by Direct Auto during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, or the year ended December 31, ~~2020.~~

The amount available for payment of dividends from Westminster to NI Holdings during 2021 without the prior approval of the Maryland Insurance Administration is $505 based upon the statutory net investment income of Westminster for the year ended December 31, 2020 and the three preceding years. Prior to its payment of any dividend, Westminster will be required to provide notice of the dividend to the Maryland Insurance Administration. This notice must be provided to the Maryland Insurance Administration within five business days following declaration of any dividend and no less than 30 days prior to the payment of an extraordinary dividend or 10 days prior to the payment of an ordinary dividend. The Maryland Insurance Administration has the power to limit or prohibit dividend payments if Westminster is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity. No dividends were declared or paid by Westminster during the nine months ended September 30, 2021 or the year ended December 31, 2020.2021.

Westminster was re-domesticated from Maryland to North Dakota during 2021, and is now subject to the same dividend restrictions as Nodak Insurance. The amount available for payment of dividends from Westminster to NI Holdings during 2022 without the prior approval of the North Dakota Insurance Department is $2,471 based upon the surplus of Westminster at December 31, 2021. No dividends were declared or paid by Westminster during the six months ended June 30, 2022, or the year ended December 31, 2021.

The following tables illustrates the impact of including Battle Creek in our Unaudited Consolidated Balance Sheets and Statements of Operations prior to intercompany eliminations:

Nodak Insurance sponsors a 401(k) plan with an automatic and matching contribution for eligible employees at Nodak Insurance, Primero, and Direct Auto. Westminster also sponsors a separate 401(k) plan. The Company reported expenses related to the 401(k) plans totaling ~~$178~~$242 and ~~$164~~$270 during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$525~~$432 and ~~$489~~$539 during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Nodak Insurance also contributes an additional elective amount of employee compensation as a profit-sharing contribution for eligible employees that is invested in a portfolio of investments directed by the Company. The reported expenses related to this profit-sharing contribution were ~~$165~~$187 and ~~$97~~$175 during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$704~~$335 and ~~$500~~$347 during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

All fees associated with the plans are deducted from the eligible employee accounts.

The Company also offers a non-qualified deferred compensation plan to key executives of the Company (as designated by the Board of Directors). The Company’s policy is to fund the plan by amounts that represent the excess of the maximum contribution allowed by the Employee Retirement Income Security Act (“ERISA”) over the key executives’ allowable 401(k) contribution. The plan also allows employee-directed deferral of key executive’s compensation or incentive payments. The Company reported expenses related to this plan totaling ~~$21~~$23 and ~~$15~~$149 during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$588~~$127 and ~~$43~~$567 during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

In connection with our initial public offering (“IPO”) in March 2017, the Company established an Employee Stock Ownership Plan (the “ESOP”). The ESOP is intended to be an employee stock ownership plan within the meaning of Internal Revenue Code Section 4975(e)(7) and invests solely in common stock of the Company.

Upon establishment of the plan, Nodak Insurance loaned ~~$2,400~~$2,400 to the ESOP’s related trust (the “ESOP Trust”). The ESOP loan was for a period of ten years, bearing interest at the long-term Applicable Federal Rate effective on the closing date of the offering ~~(2.79%~~(2.79% annually). The ESOP Trust used the proceeds of the loan to purchase shares in our ~~initial public offering,~~IPO, which resulted in the ESOP Trust owning approximately ~~1.0%~~1.0% of the Company’s authorized shares. The ESOP has purchased the shares for investment and not for resale.

The shares purchased by the ESOP Trust in the offering are held in a suspense account as collateral for the ESOP loan. Nodak Insurance makes semi-annual cash contributions to the ESOP in amounts no smaller than the amounts required for the ESOP Trust to make its loan payments to Nodak Insurance. While the ESOP makes two loan payments per year, a pre-determined portion of the shares are released from the suspense account and allocated to participant accounts at the end of the calendar year. This release and allocation occurs on an annual basis over the ten-year term of the ESOP loan. Nodak Insurance has a lien on the shares of common stock of the Company held by the ESOP to secure repayment of the loan from the ESOP to Nodak Insurance. If the ESOP is terminated as a result of a change in control of the Company, the ESOP may be required to pay the costs of terminating the plan.

It is anticipated that the only assets held by the ESOP will be shares of the Company’s common stock. Participants in the ESOP cannot direct the investment of any assets allocated to their accounts. The ESOP participants are employees of Nodak Insurance. The employees of Primero, Direct Auto, and Westminster do not participate in the ESOP. American West and Battle Creek have no employees.

Each employee of Nodak Insurance automatically becomes a participant in the ESOP if such employee is at least 21 years old, has completed a minimum of one thousand hours of service with Nodak Insurance, and has completed an Eligibility Computation Period. Employees are not permitted to make any contributions to the ESOP. Participants in the ESOP receive annual reports from the Company showing the number of shares of common stock of the Company allocated to the participants’ accounts and the market value of those shares. The shares are allocated to participants based on compensation as provided for in the ESOP.

In connection with the establishment of the ESOP, the Company created a contra-equity account on the Consolidated Balance Sheet equal to the ESOP’s basis in the shares. The basis of those shares was set at ~~$10.00~~$10.00 per share as part of the ~~initial public offering.~~IPO. As shares are released from the ESOP suspense account, the contra-equity account is credited, which reduces the impact of the contra-equity account on the Company’s Consolidated Balance Sheet over time. The Company records compensation expense related to the shares released, equal to the number of shares released from the suspense account multiplied by the average market value of the Company’s stock during the period.

The Company recognized compensation expense of ~~$116~~$101 and ~~$98~~$117 during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, related to the ESOP, and ~~$342~~$210 and ~~$270~~$226 during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Through ~~September~~June 30, ~~2021~~2022, and December 31, ~~2020,~~2021, the Company ~~has~~had released and allocated ~~97,260~~121,575 ESOP shares to participants, with a remainder of ~~142,740~~118,425 ESOP shares in suspense at ~~September~~June 30, ~~2021~~2022, and December 31, ~~2020.~~2021. Using the Company’s quarter-end market price of ~~$17.56~~$16.43 per share, the fair value of the unearned ESOP shares was ~~$2,507~~$1,946 at ~~September~~June 30, ~~2021.~~2022.

Nodak Insurance has a ~~$5,000~~$5,000 line of credit with Wells Fargo Bank, N.A. The terms of the line of credit include a floating interest rate with a floor rate of ~~3.25%~~3.25%. There were no outstanding amounts during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, or the year ended December 31, ~~2020.~~2021. This line of credit is scheduled to expire on ~~January 30, 2022.~~May 31, 2023.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, and the creation of certain refundable employee retention credits. There has been no impact to the Company’s income taxes due to this legislation.

At ~~September~~June 30, ~~2021~~2022, and December 31, ~~2020,~~2021, we had ~~00no~~no unrecognized tax benefits, no accrued interest and penalties, orand no significant uncertain tax positions. ~~00No~~No interest and penalties were recognized during the ~~three- or nine-month~~three-month periods ended ~~September~~June 30, ~~2021~~2022 or ~~2020.~~2021.

At ~~September~~June 30, ~~2021~~2022, and December 31, ~~2020,~~2021, the Company, other than Battle Creek and Westminster, had no income tax related ~~carryovers~~carryforwards for net operating losses, alternative minimum tax credits, or capital losses.

Battle Creek, which files its income tax returns on a stand-alone basis, had net operating loss ~~carryovers~~carryforwards of ~~$3,390~~$3,215 at December 31, ~~2020. The~~2021. These net operating loss carryforwards ~~expire beginning~~began expiring in 2021 and will continue through ~~2030~~2032 due to limitations on ~~the use of these~~their use.

~~Westminster, which became part of the Company’s consolidated federal income tax return beginning in 2020, had~~carryforward at December 31, 2021. This net operating loss ~~carryovers of $2,559 at December 31, 2020. The net operating loss carryforwards expire beginning~~carryforward expires in ~~2021 through~~ 2023 due to limitations on ~~the use of these net operating loss carryforwards.~~

NI Holdings had gross deferred income tax assets of $10,190 at September 30, 2021 and $8,603 at December 31, 2020, arising primarily from unearned premiums, loss reserve discounting, and net operating loss carryforwards. A valuation allowance is required to be established for any portion of the deferred income tax asset for which the Company believes it is more likely than not that it will not be realized. A valuation allowance of $931 was carried at September 30, 2021 and December 31, 2020.

NI Holdings had gross deferred income tax liabilities of $15,359 at September 30, 2021 and $16,429 at December 31, 2020, arising primarily from deferred policy acquisition costs, net unrealized capital gains on investments, and other intangible assets.its use.

As of ~~September~~June 30, ~~2021, NI Holdings had no material unrecognized income tax benefits or accrued interest and penalties. Federal~~2022, federal income tax years ~~2017~~2018 through ~~2019~~2020 remain open for examination.

Primero leases a facility in Spearfish, South Dakota under a non-cancellable operating lease expiring in 2023. and leases a facility in Las Vegas, Nevada on a month-to-month basis. Direct Auto leases a facility in Chicago, Illinois under a non-cancellable operating lease expiring in 2029. Nodak Insurance leases a facility in Fargo, North Dakota under a non-cancellable operating lease expiring in ~~2024.~~2024. There were expenses of ~~$63~~$69 and ~~$94~~$63 related to these leases during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$187~~$137 and ~~$277~~$124 related to these leases during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

As of ~~September~~June 30, ~~2021,~~2022, we have minimum future commitments under non-cancellable leases for the next five years ~~in the period ending December 31, 2025,~~ and thereafter as follows:

We have been named as a defendant in various lawsuits relating to our insurance operations. Contingent liabilities arising from litigation, income taxes, and other matters are not considered to be material to our financial position.

Changes in the number of common stock shares outstanding ~~were~~are as follows:

The changes in the number of common shares outstanding excludes certain non-forfeitable stock award shares that are included in the weighted average common shares outstanding used in basic earnings per common share calculations. In addition, the net loss per diluted common share for the three- and six-month periods ended June 30, 2022, excluded the weighted average effects of 176,037 and 207,424 shares of stock awards, respectively, since the impacts of these potential shares of common stock were anti-dilutive.

On ~~February 28, 2018,~~May 4, 2020, our Board of Directors approved an authorization for the repurchase of up to approximately $10,000 of the Company’s outstanding common stock. We completed the repurchase of 191,265 shares of our common stock for $2,966 during 2018, and an additional 116,034 shares for $2,006 during 2019. During the six months ended June 30, 2020, we completed the repurchase of 402,056 shares of our common stock for $4,996 to close out this authorization.

~~On May 4, 2020, our Board of Directors approved an additional authorization for the repurchase of up to approximately $10,000~~$10,000 of the Company’s outstanding common stock. During the year ended December 31, 2020, we completed the repurchase of 454,443 shares of our common stock for ~~$7,238~~$7,238 under this authorization. During the nine months ended September 30, 2021, we completed the repurchase of 144,110 shares of our common stock for ~~$2,762~~$2,762 to close out this authorization.

On August 11, 2021, our Board of Directors approved an ~~additional~~ authorization for the repurchase of up to approximately ~~$5,000~~$5,000 of the Company’s outstanding common stock. During the ~~three months~~year ended ~~September 30,~~December 31, 2021, we completed the repurchase of ~~24,283~~81,095 shares of our common stock for ~~$449~~$1,554 under this ~~new~~ authorization. During the three months ended June 30, 2022, we completed the repurchase of 56,372 shares of our common stock for $935. During the six months ended June 30, 2022, we completed the repurchase of 111,244 shares of our common stock for $1,932.

On May 9, 2022, our Board of Directors approved an authorization for the repurchase of up to approximately $10,000 of the Company’s outstanding common stock in addition to the $1,514 remaining from the August 11, 2021, repurchase authorization as of June 30, 2022. No shares were repurchased as part of the May 9, 2022, authorization during the six months ended June 30, 2022.

The cost of this treasury stock is a reduction of shareholders’ equity within our Unaudited Consolidated Balance Sheets.

At its 2020 Annual Shareholders’ Meeting, the NI Holdings, Inc. 2020 Stock and Incentive Plan (the “Plan”) was approved by shareholders. The purpose of the Plan is to promote the interests of the Company and its shareholders by aiding the Company in attracting and retaining employees, officers, consultants, independent contractors, advisors, and non-employee directors capable of assuring the future success of the Company, to offer such persons incentives to put forth maximum efforts for the success of the Company’s business and to afford such persons an opportunity to acquire an ownership interest in the Company, thereby aligning the interests of such persons with the Company’s shareholders.

The Plan provides for the grant of nonqualified stock options, incentive stock options, restricted stock units (“RSUs”), stock appreciation rights, dividend equivalents, and performance share units (“PSUs”) to employees, officers, consultants, advisors, non-employee directors, and independent contractors designated by the Compensation Committee of the Board of Directors (the “Compensation Committee”). Awards made under the Plan are based upon, among other things, a participant’s level of responsibility and performance within the Company.

The total aggregate number of shares of common stock that ~~awards~~ may be issued ~~under all awards made~~ under the Plan shall not exceed 1,000,000 shares, ~~of common stock,~~ subject to adjustments as provided in the Plan. No eligible participant may be granted any awards for more than 100,000 shares in the aggregate in any calendar year, subject to adjustment in accordance with the Plan. The aggregate amount payable pursuant to all performance awards denominated in cash to any eligible person in any calendar year is limited to ~~$1,000~~$1,000 in value. Directors who are not also employees of the Company may not be granted awards denominated in shares that exceed ~~$150~~$150 in any calendar year.

The Compensation Committee has awarded RSUs to non-employee directors and select executives. RSUs are promises to issue actual shares of common stock at the end of a vesting period. The RSUs granted to executives under the Plan were based on salary and vest ~~20%~~20% per year over a five-year period, while RSUs granted to non-employee directors vest ~~100%~~100% on the date of the next annual meeting of shareholders following the grant date. Dividend equivalents on RSUs are accrued during the vesting period and paid in cash at the end of the vesting period, but are subject to forfeiture until the underlying shares become vested. Participants do not have voting rights with respect to RSUs.

The Company recognizes stock-based compensation costs based on the grant date fair value. The compensation costs are normally expensed over the vesting periods to each vesting date; however, the cost of RSUs granted to executives are expensed immediately if the executive has met certain retirement criteria and the RSUs become non-forfeitable. Estimated forfeitures are included in the determination of compensation costs. No forfeitures are currently estimated.

A summary of the Company’s outstanding and unearned ~~restricted stock units~~RSUs is presented below:

The following table shows the impact of RSU activity to the Company’s financial results:

At ~~September~~June 30, ~~2021,~~2022, there was ~~$939~~$1,270 of unrecognized compensation cost related to outstanding RSUs. That cost is expected to be recognized over a weighted-average period of ~~2.01~~2.05 years.

The Compensation Committee has awarded PSUs to select executives. PSUs are promises to issue actual shares of common stock at the end of a vesting period, if certain performance conditions are met. The PSUs granted to employees under the Plan were based on salary and include a three-year book value cumulative growth target with threshold and stretch goals. They will vest on the third anniversary of the grant date, subject to the participant’s continuous employment through the vesting date and the level of performance achieved. Dividend equivalents on PSUs are accrued and paid in cash at the end of the performance period in accordance with the level of performance achieved, but are subject to forfeiture until the underlying shares become vested. Participants do not have voting rights with respect to PSUs.

The Company recognizes stock-based compensation costs based on the grant date fair value over the performance period of the awards. Estimated forfeitures are included in the determination of compensation costs. The current cost estimate assumes that the cumulative growth targets will be achieved or exceeded.

A summary of the Company’s outstanding ~~performance share units~~PSUs is presented below:

⁽¹⁾ Represents the change in PSUs issued based upon the attainment of performance goals established by the Company.

The following table shows the impact of PSU activity to the Company’s financial results:

The PSU grants above represent initial target awards and do not reflect potential increases or decreases resulting from financial performance objectives to be determined at the end of the performance period. At the end of the performance period, the Company will reflect a performance adjustment, which may be either an increase or decrease from the initial target awards. The actual number of shares to be issued at the end of the performance period will range from 0%0% to ~~150%~~150% of the initial target awards.

At ~~September~~June 30, ~~2021,~~2022, there was ~~$1,434~~$1,656 of unrecognized compensation cost related to outstanding PSUs. That cost is expected to be recognized over a weighted-average period of ~~1.92~~2.10 years.

We have five primary reportable operating segments, which consist of private passenger auto insurance, non-standard auto insurance, home and farm insurance, crop insurance, and commercial insurance. A sixth segment captures all other insurance coverages we sell, including our assumed reinsurance lines of business. We operate only in the United States, and no single customer or agent provides 10 percent or more of our revenues. The following tables provide available information of these segments for the three- and ~~nine-month~~six- month periods ended ~~September~~June 30, ~~2021~~2022 and ~~2020. For presentation in these tables, “LAE” refers to loss adjustment expenses.~~

The ratios presented in these tables are non-GAAP financial measures under SEC rules and regulations. While these ratios are used widely in the property and casualty insurance industry, such non-GAAP ratios may not be comparable to similarly-named measures reported by other companies.

The loss and LAE ratio equals losses and loss adjustment expenses divided by net premiums earned. The expense ratio equals amortization of deferred policy acquisition costs and other underwriting and general expenses, divided by net premiums earned. The combined ratio equals losses and loss adjustment expenses, amortization of deferred policy acquisition costs, and other underwriting and general expenses, divided by net premiums earned.2021.

For purposes of evaluating profitability of the non-standard auto segment, management combines the policy fees paid by the insured with the underwriting gain or loss as its primary measure. As a result, these fees are allocated to the non-standard auto segment (included in fee and other income) in the tables below. The remaining fee and other income amounts are not allocated to any segment.

We do not assign or allocate all line items in our Unaudited Consolidated Statement of Operations or Unaudited Consolidated Balance Sheet ~~line items~~ to our operating segments. Those line items include investment income, net ~~capital gain on investments,~~investment gains (losses), other income excluding non-standard auto insurance fees, and income taxes within the Unaudited Consolidated Statement of Operations. For the Unaudited Consolidated Balance Sheet, those items include cash and investments, property and equipment, other assets, accrued expenses, income taxes recoverable or payable, and shareholders’ equity.

	Three Months Ended June 30, 2022
	Private Passenger Auto			Non- Standard Auto			Home and Farm			Crop			Commercial			All Other				Total
Direct premiums earned	$	19,824		$	15,577		$	21,703		$	17,709		$	18,161		$	1,277		$	94,251
Assumed premiums earned		0-			0-			0-			491			0-			1,200			1,691
Ceded premiums earned		(559	)		(65	)		(1,748	)		(5,905	)		(3,130	)		(39	)		(11,446	)
Net premiums earned		19,265			15,512			19,955			12,295			15,031			2,438			84,496

Direct losses and loss adjustment expenses		16,866			4,133			62,188			13,237			13,081			1,165			110,670
Assumed losses and loss adjustment expenses		0-			0-			0-			244			0-			1,291			1,535
Ceded losses and loss adjustment expenses		(12	)		0-			(357	)		(3,151	)		(90	)		0-			(3,610	)
Net losses and loss adjustment expenses		16,854			4,133			61,831			10,330			12,991			2,456			108,595

Gross margin		2,411			11,379			(41,876	)		1,965			2,040			(18	)		(24,099	)

Underwriting and general expenses		5,553			6,867			6,056			1,609			5,576			585			26,246
Underwriting gain (loss)		(3,142	)		4,512			(47,932	)		356			(3,536	)		(603	)		(50,345	)

Fee and other income					254															415
					4,766
Net investment income																				2,015
Net investment losses																				(11,136	)
Loss before income taxes																				(59,051	)
Income tax benefit																				(12,415	)
Net loss																				(46,636	)
Net loss attributable to non-controlling interest																				(726	)
Net loss attributable to NI Holdings, Inc.																			$	(45,910	)

Operating Ratios:
Loss and loss adjustment expense ratio		87.5%			26.6%			309.9%			84.0%			86.4%			100.7%			128.5%
Expense ratio		28.8%			44.3%			30.3%			13.1%			37.1%			24.0%			31.1%
Combined ratio		116.3%			70.9%			340.2%			97.1%			123.5%			124.7%			159.6%


Balances at June 30, 2022:
Premiums and agents’ balances receivable	$	21,287		$	16,678		$	10,468		$	42,905		$	16,175		$	823		$	108,336
Deferred policy acquisition costs		5,427			8,201			7,838			1,060			7,929			462			30,917
Reinsurance recoverables on losses		591			0-			2,766			1,976			10,960			748			17,041
Goodwill and other intangibles		0-			2,786			0-			0-			14,700			0-			17,486
Unpaid losses and loss adjustment expenses		29,105			38,689			49,052			12,755			43,876			9,399			182,876

Unearned premiums		31,885			24,030			45,942			26,205			42,379			3,284			173,725
Payable to Federal Crop Insurance Corporation		0-			0-			0-			7,102			0-			0-			7,102

	Three Months Ended June 30, 2021
	Private Passenger Auto			Non- Standard Auto			Home and Farm			Crop			Commercial			All Other				Total
Direct premiums earned	$	19,012		$	15,263		$	20,808		$	14,574		$	16,195		$	1,207		$	87,059
Assumed premiums earned		0-			0-			0-			2,084			0-			1,432			3,516
Ceded premiums earned		(944	)		(365	)		(2,435	)		(8,305	)		(2,175	)		(70	)		(14,294	)
Net premiums earned		18,068			14,898			18,373			8,353			14,020			2,569			76,281

Direct losses and loss adjustment expenses		15,094			11,490			19,436			21,803			8,494			282			76,599
Assumed losses and loss adjustment expenses		0-			0-			0-			523			0-			1,437			1,960
Ceded losses and loss adjustment expenses		(189	)		0-			(1,228	)		(12,994	)		(1,230	)		0-			(15,641	)
Net losses and loss adjustment expenses		14,905			11,490			18,208			9,332			7,264			1,719			62,918

Gross margin		3,163			3,408			165			(979	)		6,756			850			13,363

Underwriting and general expenses		4,767			6,525			5,073			1,431			5,177			616			23,589
Underwriting gain (loss)		(1,604	)		(3,117	)		(4,908	)		(2,410	)		1,579			234			(10,226	)

Fee and other income					361															520
					(2,756	)
Net investment income																				1,710
Net investment gains																				4,701
Loss before income taxes																				(3,295	)
Income tax benefit																				(561	)
Net loss																				(2,734	)
Net loss attributable to non-controlling interest																				(90	)
Net loss attributable to NI Holdings, Inc.																			$	(2,644	)

Operating Ratios:
Loss and loss adjustment expense ratio		82.5%			77.1%			99.1%			111.7%			51.8%			66.9%			82.5%
Expense ratio		26.4%			43.8%			27.6%			17.1%			36.9%			24.0%			30.9%
Combined ratio		108.9%			120.9%			126.7%			128.9%			88.7%			90.9%			113.4%


Balances at June 30, 2021:
Premiums and agents’ balances receivable	$	20,100		$	9,408		$	9,739		$	30,438		$	14,048		$	730		$	84,463
Deferred policy acquisition costs		6,548			6,368			9,069			358			6,763			551			29,657
Reinsurance recoverables on losses		905			0-			1,600			13,918			5,934			2,217			24,574
Receivable from Federal Crop Insurance Corporation		0-			0-			0-			17,191			0-			0-			17,191
Goodwill and other intangibles		0-			2,835			0-			0-			15,123			0-			17,958

Unpaid losses and loss adjustment expenses		26,161			43,727			20,839			23,638			26,812			11,163			152,340
Unearned premiums		30,518			19,968			43,229			27,615			37,047			3,215			161,592

Three Months Ended September 30, 2021
Private
Passenger
Auto
Non-
Standard
Auto
Home and
Farm
Crop
Commercial
All Other
Total
Direct premiums earned
$
19,453
$
15,258
$
21,256
$
19,654
$
16,864
$
1,255
$
93,740
Assumed premiums earned
0-
0-
0-
24
0-
1,312
1,336
Ceded premiums earned
(962
)
(369
)
(2,481
)
(6,954
)
(2,066
)
(71
)
(12,903
)
Net premiums earned
18,491
14,889
18,775
12,724
14,798
2,496
82,173

Direct losses and LAE
17,646
9,620
19,839
27,237
13,058
53
87,453
Assumed losses and LAE
0-
0-
0-
151
0-
2,157
2,308
Ceded losses and LAE
(516
)
0-
(3,684
)
(14,906
)
(5,288
)
375
(24,019
)
Net losses and LAE
17,130
9,620
16,155
12,482
7,770
2,585
65,742

Gross margin
1,361
5,269
2,620
242
7,028
(89
)
16,431

Underwriting and general expenses
5,892
6,010
6,627
864
5,257
698
25,348
Underwriting gain (loss)
(4,531
)
(741
)
(4,007
)
(622
)
1,771
(787
)
(8,917
)

Fee and other income
301
501

(440
)
Net investment income
1,713
Net capital gain on investments
222
Loss before income taxes
(6,481
)
Income tax benefit
(1,622
)
Net loss
(4,859
)
Net loss attributable to non-controlling interest
(122
)
Net loss attributable to NI Holdings, Inc.
$
(4,737
)

Non-GAAP Ratios:
Loss and LAE ratio
92.6%
64.6%
86.0%
98.1%
52.5%
103.6%
80.0%
Expense ratio
31.9%
40.4%
35.3%
6.8%
35.5%
28.0%
30.8%
Combined ratio
124.5%
105.0%
121.3%
104.9%
88.0%
131.5%
110.9%

Balances at September 30, 2021:
Premiums and agents’ balances receivable
$
19,531
$
8,789
$
9,246
$
33,376
$
10,737
$
709
$
82,388
Deferred policy acquisition costs
5,234
6,226
7,539
1
6,027
449
25,476
Reinsurance recoverables
1,422
0-
2,680
28,824
7,911
1,841
42,678
Receivable from Federal Crop Insurance Corporation
0-
0-
0-
9,362
0-
0-
9,362
Goodwill and other intangibles
0-
2,823
0-
0-
15,017
0-
17,840

Unpaid losses and LAE
26,073
44,114
17,443
50,393
30,547
11,006
179,576
Unearned premiums
29,462
19,489
42,664
9,369
32,930
3,185
137,099

	Six Months Ended June 30, 2022
	Private Passenger Auto			Non- Standard Auto			Home and Farm			Crop			Commercial			All Other				Total
Direct premiums earned	$	39,125		$	30,019		$	42,882		$	17,692		$	35,391		$	2,541		$	167,650
Assumed premiums earned		0-			0-			0-			491			0-			3,061			3,552
Ceded premiums earned		(1,118	)		(129	)		(3,715	)		(5,901	)		(6,172	)		(84	)		(17,119	)
Net premiums earned		38,007			29,890			39,167			12,282			29,219			5,518			154,083

Direct losses and loss adjustment expenses		31,392			12,624			69,380			13,134			28,144			1,491			156,165
Assumed losses and loss adjustment expenses		0-			0-			0-			244			0-			1,301			1,545
Ceded losses and loss adjustment expenses		173			0-			(709	)		(3,214	)		(5,136	)		(100	)		(8,986	)
Net losses and loss adjustment expenses		31,565			12,624			68,671			10,164			23,008			2,692			148,724

Gross margin		6,442			17,266			(29,504	)		2,118			6,211			2,826			5,359

Underwriting and general expenses		11,321			12,958			12,029			1,057			10,912			1,373			49,650
Underwriting gain (loss)		(4,879	)		4,308			(41,533	)		1,061			(4,701	)		1,453			(44,291	)

Fee and other income					642															843
					4,950
Net investment income																				3,668
Net investment losses																				(16,664	)
Loss before income taxes																				(56,444	)
Income tax benefit																				(11,847	)
Net loss																				(44,597	)
Net loss attributable to non-controlling interest																				(596	)
Net loss attributable to NI Holdings, Inc.																			$	(44,001	)

Operating Ratios:
Loss and loss adjustment expense ratio		83.1%			42.2%			175.3%			82.8%			78.7%			48.8%			96.5%
Expense ratio		29.8%			43.4%			30.7%			8.6%			37.3%			24.9%			32.2%
Combined ratio		112.8%			85.6%			206.0%			91.4%			116.1%			73.7%			128.7%

Three Months Ended September 30, 2020
Private
Passenger
Auto
Non-
Standard
Auto
Home and
Farm
Crop
Commercial
All Other
Total
Direct premiums earned
$
19,002
$
13,882
$
20,688
$
12,189
$
12,516
$
1,178
$
79,455
Assumed premiums earned
0-
0-
0-
(33
)
0-
1,405
1,372
Ceded premiums earned
(1,055
)
(43
)
(2,140
)
(2,437
)
(1,743
)
(67
)
(7,485
)
Net premiums earned
17,947
13,839
18,548
9,719
10,773
2,516
73,342

Direct losses and LAE
13,570
9,425
13,912
12,154
9,257
1,618
59,936
Assumed losses and LAE
(165
)
0-
0-
617
0-
1,984
2,436
Ceded losses and LAE
165
0-
(475
)
(3,546
)
(3,680
)
(1,000
)
(8,536
)
Net losses and LAE
13,570
9,425
13,437
9,225
5,577
2,602
53,836

Gross margin
4,377
4,414
5,111
494
5,196
(86
)
19,506

Underwriting and general expenses
5,103
5,140
5,507
1,542
4,289
563
22,144
Underwriting gain (loss)
(726
)
(726
)
(396
)
(1,048
)
907
(649
)
(2,638
)

Fee and other income
336
524

(390
)
Net investment income
1,886
Net capital gain on investments
5,102
Income before income taxes
4,874
Income tax expense
1,188
Net income
3,686
Net income attributable to non-controlling interest
22
Net income attributable to NI Holdings, Inc.
$
3,664

Non-GAAP Ratios:
Loss and LAE ratio
75.6%
68.1%
72.4%
94.9%
51.8%
103.4%
73.4%
Expense ratio
28.4%
37.1%
29.7%
15.9%
39.8%
22.4%
30.2%
Combined ratio
104.0%
105.2%
102.1%
110.8%
91.6%
125.8%
103.6%

Balances at September 30, 2020:
Premiums and agents’ balances receivable
$
19,269
$
7,358
$
9,323
$
39,182
$
9,071
$
665
$
84,868
Deferred policy acquisition costs
5,629
4,931
7,900
409
4,564
452
23,885
Reinsurance recoverables
341
0-
1,984
3,675
5,082
2,474
13,556
Receivable from Federal Crop Insurance Corporation
0-
0-
0-
9,519
0-
0-
9,519
Goodwill and other intangibles
0-
2,872
0-
0-
15,765
0-
18,637

Unpaid losses and LAE
20,399
44,526
12,361
29,723
16,602
11,192
134,803
Unearned premiums
29,203
17,147
41,724
8,730
26,247
2,915
125,966

	Six Months Ended June 30, 2021
	Private Passenger Auto			Non- Standard Auto			Home and Farm			Crop			Commercial			All Other				Total
Direct premiums earned	$	37,700		$	28,844		$	41,391		$	14,558		$	30,917		$	2,392		$	155,802
Assumed premiums earned		0-			0-			0-			2,084			0-			2,880			4,964
Ceded premiums earned		(2,134	)		(688	)		(5,564	)		(8,242	)		(4,559	)		(163	)		(21,350	)
Net premiums earned		35,566			28,156			35,827			8,400			26,358			5,109			139,416

Direct losses and loss adjustment expenses		27,653			16,290			27,324			22,375			19,958			577			114,177
Assumed losses and loss adjustment expenses		0-			0-			0-			523			0-			2,385			2,908
Ceded losses and loss adjustment expenses		(494	)		0-			(1,484	)		(13,005	)		(2,295	)		0-			(17,278	)
Net losses and loss adjustment expenses		27,159			16,290			25,840			9,893			17,663			2,962			99,807

Gross margin		8,407			11,866			9,987			(1,493	)		8,695			2,147			39,609

Underwriting and general expenses		10,126			10,939			10,684			1,967			9,792			1,319			44,827
Underwriting gain (loss)		(1,719	)		927			(697	)		(3,460	)		(1,097	)		828			(5,218	)

Fee and other income					693															837
					1,620
Net investment income																				3,246
Net investment gains																				10,512
Income before income taxes																				9,377
Income tax expense																				2,329
Net income																				7,048
Net income attributable to non-controlling interest																				23
Net income attributable to NI Holdings, Inc.																			$	7,025

Operating Ratios:
Loss and loss adjustment expense ratio		76.4%			57.9%			72.1%			117.8%			67.0%			58.0%			71.6%
Expense ratio		28.5%			38.9%			29.8%			23.4%			37.2%			25.8%			32.2%
Combined ratio		104.8%			96.7%			101.9%			141.2%			104.2%			83.8%			103.7%

Nine Months Ended September 30, 2021
Private
Passenger
Auto
Non-
Standard
Auto
Home and
Farm
Crop
Commercial
All Other
Total
Direct premiums earned
$
57,153
$
44,102
$
62,647
$
34,212
$
47,781
$
3,647
$
249,542
Assumed premiums earned
0-
0-
0-
2,108
0-
4,192
6,300
Ceded premiums earned
(3,096
)
(1,057
)
(8,045
)
(15,196
)
(6,625
)
(234
)
(34,253
)
Net premiums earned
54,057
43,045
54,602
21,124
41,156
7,605
221,589

Direct losses and LAE
45,299
25,910
47,163
49,612
33,016
630
201,630
Assumed losses and LAE
0-
0-
0-
674
0-
4,542
5,216
Ceded losses and LAE
(1,010
)
0-
(5,168
)
(27,911
)
(7,583
)
375
(41,297
)
Net losses and LAE
44,289
25,910
41,995
22,375
25,433
5,547
165,549

Gross margin
9,768
17,135
12,607
(1,251
)
15,723
2,058
56,040

Underwriting and general expenses
16,018
16,949
17,311
2,831
15,049
2,017
70,175
Underwriting gain (loss)
(6,250
)
186
(4,704
)
(4,082
)
674
41
(14,135
)

Fee and other income
994
1,338

1,180
Net investment income
4,959
Net capital gain on investments
10,734
Income before income taxes
2,896
Income tax expense
707
Net income
2,189
Net loss attributable to non-controlling interest
(99
)
Net income attributable to NI Holdings, Inc.
$
2,288

Non-GAAP Ratios:
Loss and LAE ratio
81.9%
60.2%
76.9%
105.9%
61.8%
72.9%
74.7%
Expense ratio
29.6%
39.4%
31.7%
13.4%
36.6%
26.5%
31.7%
Combined ratio
111.6%
99.6%
108.6%
119.3%
98.4%
99.5%
106.4%

Nine Months Ended September 30, 2020
Private
Passenger
Auto
Non-
Standard
Auto
Home and
Farm
Crop
Commercial
All Other
Total
Direct premiums earned
$
55,899
$
40,253
$
61,062
$
31,438
$
32,173
$
3,475
$
224,300
Assumed premiums earned
0-
0-
0-
1,903
0-
3,752
5,655
Ceded premiums earned
(3,267
)
(129
)
(7,125
)
109
(5,206
)
(217
)
(15,835
)
Net premiums earned
52,632
40,124
53,937
33,450
26,967
7,010
214,120

Direct losses and LAE
33,324
23,560
32,661
35,212
26,169
2,277
153,203
Assumed losses and LAE
0-
0-
0-
839
0-
2,699
3,538
Ceded losses and LAE
(1
)
0-
(1,826
)
(5,352
)
(11,640
)
(1,300
)
(20,119
)
Net losses and LAE
33,323
23,560
30,835
30,699
14,529
3,676
136,622

Gross margin
19,309
16,564
23,102
2,751
12,438
3,334
77,498

Underwriting and general expenses
14,248
15,482
15,102
3,542
11,842
1,712
61,928
Underwriting gain (loss)
5,061
1,082
8,000
(791
)
596
1,622
15,570

Fee and other income
993
1,332

2,075
Net investment income
5,875
Net capital gain on investments
1,380
Income before income taxes
24,157
Income tax expense
5,259
Net income
18,898
Net income attributable to non-controlling interest
88
Net income attributable to NI Holdings, Inc.
$
18,810

Non-GAAP Ratios:
Loss and LAE ratio
63.3%
58.7%
57.2%
91.8%
53.9%
52.4%
63.8%
Expense ratio
27.1%
38.6%
28.0%
10.6%
43.9%
24.4%
28.9%
Combined ratio
90.4%
97.3%
85.2%
102.4%
97.8%
76.9%
92.7%

Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to provide a more comprehensive review of the Company’s operating results and financial condition than can be obtained from reading the Unaudited Consolidated Financial Statements alone. This discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in ~~“Part I.~~Part I, Item ~~1. Financial~~1, “Financial Statements.” Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q constitutes forward-looking statements that involve risks and uncertainties. Please see “Forward-Looking Statements” and ~~“Part II.~~Part II, Item ~~1A. Risk~~1A, “Risk Factors” included elsewhere in this Quarterly ~~Report.~~Report on Form 10-Q. You should also review Part I, Item 1A, “Risk Factors” included in the Company’s ~~2020~~2021 Annual Report for a discussion of important factors, including COVID-19 or a future pandemic, and changing climate conditions, that could cause actual results to differ materially from the results described, or implied by, the forward-looking statements contained herein.

~~NI Holdings’ results of operations are influenced by factors affecting the property and casualty insurance and crop insurance industries in general.~~ The operating results of the United States property and casualty industry and crop insurance industry are subject to significant variations due to competition, weather, catastrophic events, changes in regulation, general economic conditions, rising medical expenses, judicial trends, fluctuations in interest rates, and other changes in the investment environment.

NI Holdings premium levels and underwriting results have been, and continue to be, influenced by market conditions. Pricing in the property and casualty insurance industry historically has been cyclical. During a soft market cycle, price competition is more significant than during a hard market cycle and makes it difficult to attract and retain properly priced business. During a hard market cycle, it is more likely that insurers will be able to increase their rates or profit margins. A hard market typically has a positive effect on premium growth. The markets that NI Holdings serve are diversified, which requires management to regularly monitor the Company’s performance and competitive position by line of business and geographic market to schedule appropriate rate actions.

Premiums in the multi-peril crop insurance business are primarily influenced by the number of acres, commodity prices, and types of crops insured because the rates are established by the Risk Management Agency of the United States Department of Agriculture (“RMA”) rather than individual insurance carriers. The expectedconsolidated net loss ~~experience of the multi-peril crop insurance business~~ for the calendar year may also significantly affect the reported net earned premiums and losses due to the risk-sharing arrangement with the federal government. Multi-peril crop insurance premiums are generally written in the second quarter, and earned ratably over the period of risk, which generally extends into the fourth quarter. However, as was the case in 2020, if the Company experiences a higher than average number of prevented planting claims early in the risk period, recognition of earned premiums may be accelerated due to the shortened risk period.

~~Premiums in the crop hail insurance business are also generally written in the second quarter, but earned over a shorter period of risk than multi-peril crop insurance.~~

Premiums in the personal lines of business (private passenger auto, home and farm) are generally written and earned throughout the year based on their coverage periods. Losses on this business are also incurred throughout the year, but usually are more frequent and/or severe during periods of weather-related activity.

~~Premiums in the commercial lines of business are generally written and earned throughout the year. Losses on this business are also incurred throughout the year.~~

~~For more information on the Company’s results of operations by segment, see Note 19 to the Unaudited Consolidated Financial Statements, included elsewhere in this Form 10-Q.~~

~~Beginning in March 2020, the global pandemic associated with COVID-19 and related economic conditions began to impact the Company’s results. The immediate financial impact to~~ the Company was ~~volatility in our investment portfolio and significant declines in fair value on~~$46,636 for the three months ended June, 2022, compared to net loss of $2,734 for the three months ended June, 2021. The consolidated net loss for NI Holdings was $44,597 for the six months ended June 30, 2022, compared to net income of $7,048 for the six months ended June 30, 2021.

The major components of the Company’s ~~equity investments, attributable~~operating revenues and net income were as follows:

The Company’s net premiums earned for the three months ended June 30, 2022, increased $8,215, or 10.8%, compared to the ~~disruption in global financial markets. The Company’s underwriting results, especially in~~three months ended June 30, 2021. Net premiums earned for the ~~private passenger auto and non-standard auto segments, were impacted during~~six months ended June 30, 2022, increased $14,667, or 10.5%, compared to the ~~second and third quarters of 2020 as a result of fewer miles being driven and the increased unemployment rate in our Chicago and Las Vegas markets.~~six months ended June 30, 2021.

During the first nine months of 2021, we have continued to see a reduced impact from COVID-19 as economic activity has returned to near pre-pandemic levels. However, a possible resurgence of COVID-19 could impact our results.

The below discussion of results of operations for NI Holdings includes certain non-GAAP financial measures, including loss and LAE ratio, expense ratio, combined ratio, premiums written, and underwriting gain (loss). For a description of these non-GAAP financial measures, see the section titled “Non-GAAP Financial Measures” below.

The consolidated net loss for NI Holdings was $4,859 for the three months ended September 30, 2021, compared to net income of $3,686 for the three months ended September 30, 2020. The consolidated net income for NI Holdings was $2,189 for the nine months ended September 30, 2021, compared to net income of $18,898 for the nine months ended September 30, 2020.

~~The major components of NI Holdings’ operating revenues and net income (loss) were as follows:~~

~~NI Holdings’~~Below are comments regarding net premiums earned ~~for the three months ended September 30, 2021 increased $8,831, or 12.0%, compared to the three months ended September 30, 2020.~~by business segment:

Private passenger auto – Net premiums earned for the ~~nine months ended September 30, 2021 increased $7,469, or 3.5%, compared to the nine months ended September 30, 2020.~~

~~Below are comments regarding significant changes in the net premiums earned by business segment:~~

~~Private passenger auto –~~ ~~Net premiums earned for the third~~second quarter of ~~2021~~2022 increased ~~$544,~~$1,197, or ~~3.0%~~6.6%, from the ~~third~~second quarter of ~~2020.~~2021. Net premiums earned for the first ~~nine~~six months of ~~2021~~2022 increased ~~$1,425,~~$2,441, or ~~2.7%,~~6.9% from the first ~~nine~~six months of ~~2020. Premiums have been impacted~~2021. Results were driven by continued ~~soft market conditions~~new business growth and rate increases in ~~the segment.~~South Dakota and Nebraska.

Non-standard auto – Net premiums earned for the ~~third~~second quarter of ~~2021~~2022 increased ~~$1,050,~~$614, or ~~7.6%~~4.1%, from the ~~third~~second quarter of ~~2020.~~2021. Net premiums earned for the first ~~nine~~six months of ~~2021~~2022 increased ~~$2,921,~~$1,734, or ~~7.3%,~~6.2% from the first ~~nine~~six months of ~~2020. The segment has benefited from the improved economic environment~~2021. Results were driven by new business growth and recent rate increases in the Chicago market where our non-standard auto business is concentrated.

Home and farm – Net premiums earned for the ~~third~~second quarter of ~~2021~~2022 increased ~~$227,~~$1,582, or ~~1.2%~~8.6%, from the ~~third~~second quarter of ~~2020.~~2021. Net premiums earned for the first ~~nine~~six months of ~~2021~~2022 increased ~~$665,~~$3,340, or ~~1.2%,~~9.3% from the first ~~nine~~six months of ~~2020. The relatively flat premium growth on both~~2021. Results were driven by increasing insured property values as a ~~quarterly and year-to-date basis was due to competitive market conditions in this segment and the related rate reduction taken in early 2021 in the Nodak Insurance farmowners line~~result of ~~business.~~increased inflationary factors.

Crop – Net premiums earned for the ~~third~~second quarter of ~~2021~~2022 increased ~~$3,005,~~$3,942, or ~~30.9%~~47.2%, from the ~~third~~second quarter of ~~2020.~~2021. Net premiums earned for the first ~~nine~~six months of ~~2021 decreased $12,326,~~2022 increased $3,882, or ~~36.8%,~~46.2% from the first ~~nine~~six months of ~~2020. The~~2021. This increase was driven by a 20.4% increase in third quarter 2021 was primarily the result of accelerated recognition of premiums earned in 2020 prior to the third quarter. This acceleration was due to high levels of prevented-plant claims in the spring of 2020 which shortened the period of risk. On a year-to-date basis, direct ~~earned premiums increased by $2,774 primarily~~written premium for multi-peril crop insurance due to higher commodity ~~prices on multi-peril crop business. However, this increase was offset by a large increase in ceded~~prices. In addition, earned premiums increased as a result of ~~significant~~ceding significantly less multi-peril crop ~~losses from this year’s extreme drought conditions across North and South Dakota. We also placed a higher number of multi-peril crop policies~~insurance business into the Assigned Risk fund in ~~the assigned risk fund of the Standard Reinsurance Agreement for 2021, resulting in higher levels of premiums and losses being ceded~~2022 compared to the ~~federal government.~~

prior year.~~Commercial –~~ Net premiums earned for the third quarter of 2021 increased $4,025, or 37.4%, from the third quarter of 2020. Net premiums earned for the first nine months of 2021 increased $14,189, or 52.6%, from the first nine months of 2020. The increase

in both periods was primarily driven by growth in our Westminster commercial business as a result of a continuation of favorable market conditions, the positive impact of Westminster’s financial size category, and the AM Best rating upgrade.

~~All other~~Commercial – Net premiums earned for the ~~third~~second quarter of ~~2021 decreased $20,~~2022 increased $1,011, or ~~0.8%~~7.2%, from the ~~third~~second quarter of ~~2020.~~2021. Net premiums earned for the first ~~nine~~six months of ~~2021~~2022 increased ~~$595,~~$2,861, or ~~8.5%~~10.9% from the first six months of 2021. These increases were primarily driven by increasing insured values as a result of inflationary factors as well as continued increases in both price and new business production.

All other – Net premiums earned for the second quarter of 2022 decreased $131, or 5.1%, from the ~~first nine months~~second quarter of ~~2020. Net premiums earned increased modestly through nine months related~~2021 as a result of the Company’s decision to ~~our~~non-renew its participation in an assumed domestic and international reinsurance pool of business as of January 1, 2022. Net premiums earned for the first six months of 2022 increased $409, or 8.0% from the first six months of 2021 as a result of our increased participation during 2021 in the assumed domestic and international reinsurance pool of business. These results are communicated to the Company one to three months following the end of the reporting period. Accordingly, these results are generally reflected in the Company’s financial statements on a quarter lag basis, and as a result, the first quarter of 2022 continued to be impacted by our participation in these pools.

~~NI Holdings’~~The Company’s net losses and ~~LAE~~loss adjustment expenses for the three months ended ~~September~~June 30, ~~2021~~2022, increased ~~$11,906,~~$45,677, or ~~22.1%~~72.6%, compared to the three months ended ~~September~~June 30, ~~2020. Net~~2021. The Company’s net losses and ~~LAE~~loss adjustment expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, increased ~~$28,927,~~$48,917, or ~~21.2%~~49.0%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

Below are comments regarding significant changes in the net losses and ~~LAE,~~loss adjustment expenses, and the net loss and ~~LAE~~loss adjustment expense ratios, by business segment:

Private passenger auto – The net loss and ~~LAE~~loss adjustment expense ratio ~~deteriorated 17.0~~increased 5.0 percentage points and ~~18.6~~6.7 percentage points in the three- and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2021~~2022, compared to the same periods in ~~2020.~~2021. These increases were driven by elevated loss severity due to inflationary factors and increased weather-related comprehensive losses in Nebraska and South Dakota. We are addressing the increasing frequency and severity through aggressive underwriting actions and planned rate increases.

Non-standard auto – The ~~increase~~net loss and loss adjustment expense ratio decreased 50.5 percentage points and 15.7 percentage points in ~~both~~ the three- and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2021~~2022, compared to the same periods in ~~2020 was~~2021. These decreases were driven by favorable prior year reserve development in second quarter of 2022 along with other successful strategic underwriting initiatives taken in our Las Vegas market, partially offset by elevated loss severity as a result of inflationary factors. Continued rate increases will be necessary to combat the increasing severity as a ~~return~~result of the inflationary factors.

Home and farm – The net loss and loss adjustment expense ratio increased 210.8 percentage points and 103.2 percentage points in the three- and six-month periods ended June 30, 2022, compared to ~~average~~the same periods in 2021. These increases were driven by catastrophe losses in Nebraska and South Dakota during second quarter of 2022. Catastrophe losses for the Home and Farm segment in the second quarters of 2022 and 2021 accounted for 211.6 percentage points and 41.8 percentage points, respectively, of the net loss ~~frequency~~and loss adjustment expense ratio.

Crop – The net loss and loss adjustment expense ratio decreased 27.7 percentage points and 35.0 percentage points in the three- and six-month periods ended June 30, 2022, compared to the same periods in 2021. This improvement was due to ~~increased miles driven by our insureds compared~~improved crop growing conditions in 2022 in comparison to ~~2020 when pandemic-related restrictions were still~~the extreme drought conditions faced in place. Loss experience in 2021 has also been adversely impacted by an increase in uninsured/underinsured motorist liability claims frequency. The continued soft market has limited our ability to implement the needed rate increases while still remaining competitive.2021.

~~Non-standard auto~~Commercial – The net loss and ~~LAE~~loss adjustment expense ratio ~~was relatively consistent with the prior year, improving 3.5~~increased 34.6 percentage points and ~~deteriorating 1.5~~11.7 percentage points in the three- and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2021~~2022, compared to the same periods in ~~2020. Direct Auto has experienced modest elevations in loss~~2021. These increases were driven by increased frequency and severity ~~compared to 2020 despite increased miles being driven compared to 2020. Overall net~~of fire losses and LAE have increased on both a quarterly and year-to-date basis due to strong year-to-date direct written premium growth at Direct Auto. These profitable results, on both a quarterly and year-to-date-basis, have been offset by Primero’s higher loss frequency and severity due largely to the continued economic challenges in the Las Vegas market.

~~Home and farm –~~ The net loss and LAE ratio deteriorated 13.6 percentage points and 19.7 percentage points in the three- and nine-month periods ended September 30, 2021 compared to the same periods in 2020. This increase was driven by above average weather-related losses in 2021. These losses included the June catastrophe event in North Dakota, along with significant weather-related losses in Nebraska and South Dakota during the third quarter.

~~Crop –~~ The net loss and LAE ratio deteriorated 3.2 percentage points and 14.1 percentage points in the three- and nine-month periods ended September 30, 2021 compared to the same periods in 2020. The extreme drought conditions across North and South Dakota resulted in significantly elevated multi-peril crop losses. However, in anticipation of the dry weather, we placed a higher number of multi-peril crop policies in the assigned risk fund of the Standard Reinsurance Agreement for 2021, resulting in increased premiums and losses ceded to the federal government.

~~Commercial –~~ The net loss and LAE ratio deteriorated 0.7 percentage points and 7.9 percentage points in the three- and nine-month periods ended September 30, 2021 compared to the same periods in 2020. This increase on a year-to-date basis was primarily due to increased fire loss frequency in the Westminster book of business during second quarter of 2022. The remaining portion of the ~~first and second quarters. Westminster had a strong third quarter as~~Commercial segment also produced unprofitable results due to severe weather during the ~~Company continued to benefit from favorable market conditions, along with experiencing improved loss frequency and severity.~~current quarter.

All other – The net loss and ~~LAE~~loss adjustment expense ratio ~~deteriorated 0.2 percentage points and 20.5~~increased 33.8 percentage points in the ~~three- and nine-month periods~~three-month period ended ~~September~~June 30, ~~2021~~2022, compared to the same ~~periods in 2020.~~period for 2021. The increase for the second quarter of 2022 was driven by our share of a significant catastrophe loss occurrence within a reciprocal catastrophe pool that we participate in. The net loss and loss adjustment expense ratio decreased 9.2 percentage points in ~~both~~ the ~~three- and nine-month periods~~six-month period ended ~~September~~June 30, ~~2021~~2022 compared to the same ~~periods in 2020~~period for 2021. The year-to-date loss and loss adjustment expense ratio was ~~primarily due to elevated loss severity~~also impacted by favorable prior year development in our assumed domestic and international reinsurance pool of ~~business, in particular anticipated losses associated with Hurricane Ida.~~business.

Amortization of deferred policy acquisition costs decreased $3,642, or 18.3%, in the three months ended June 30, 2022, compared to the same period in 2021, and decreased $1,606, or 4.8%, in the six months ended June 30, 2022 compared to the same period in 2021. These decreases are the result of the Company refining the methodology for calculating deferred policy acquisition costs and the related amortization during the third quarter of 2021 and the impact of the previous methodology on the first six months of 2021. The effects of the change in methodology are partially offset by premium growth and the related deferrable policy acquisition costs.

~~Total~~Other underwriting and general expenses ~~including amortization of deferred policy acquisition costs,~~ increased ~~$3,204,~~$6,299, or ~~14.5%~~170.1%, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020. These expenses increased $8,247, or 13.3%, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Underlying expenses for the three months ended September 30, 2021 decreased $658, or 3.0%, compared to a year ago. Underlying expenses for the nine months ended September 30, 2021 increased $1,269, or 1.8%, compared to a year ago.

~~Expense deferrals were $6,025 lower~~ in the three months ended ~~September~~June 30, ~~2021~~2022, compared to ~~2020, while amortization of those costs was $2,163 lower~~the same period in ~~2021. Expense deferrals were $116 higher~~2021, and increased $6,429, or 56.6%, in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to ~~2020, while amortization of those costs was $7,094 higher~~the same period in 2021. These ~~nine-month~~ increases were primarily due to strong year-over-year growth in our commercial and non-standard auto segments which generally pay higher agent commissions than our other lines, partially offset by adjustments to ourare the result of the Company refining the methodology ~~primarily impacting our private passenger auto and home and farm segments. In addition, under acquisition accounting, there was no~~for calculating deferred policy acquisition costs ~~reported on~~and the ~~acquisition balance sheet~~related amortization during the third quarter of ~~Westminster, which had~~2021. Utilizing the ~~impact~~previous methodology resulted in higher deferrable expenses for the first six months of decreasing 2020 amortization of deferred policy acquisition costs relative to future years. Offsetting this impact, the Company recorded an intangible asset, referred to as the value of business acquired, on its acquisition

~~balance sheet which was amortized during 2020 as a component of~~2021 and lower other underwriting and general expenses. ~~As our mix of business has shifted and these premiums continue to be earned, the related deferral and amortization of expenses have also changed.~~

Underwriting gain (loss) measures the pre-tax profitability of our insurance operations. It is derived by subtracting losses and loss adjustment expenses, amortization of deferred policy acquisition costs, and other underwriting and general expenses from net premiums earned. The combined ratio represents the sum of these losses and expenses as a percentage of net premiums earned, and measures our overall underwriting profit.

The ~~results from~~total underwriting ~~operations decreased $6,279 and $29,705~~loss increased $40,119, or 392.3%, for the ~~three-~~three-month period ended June 30, 2022, compared to the same period in 2021. The total underwriting loss increased $39,073, or 748.8%, for the six-month period ended June 30, 2022, compared to the same period in 2021. These results were driven by the factors discussed in the Loss and ~~nine-month periods~~Loss Adjustment Expenses section above.

The overall combined ratio increased 46.2 percentage points in the three-month period ended ~~September~~June 30, ~~2021~~2022, compared to the same periods in ~~2020.~~

2021. The overall combined ratio ~~deteriorated 7.3 percentage points and 13.7~~increased 25.0 percentage points in the ~~three- and nine-month periods~~six-month period ended ~~September~~June 30, ~~2021~~2022, compared to the same periods in ~~2020.~~

~~The primary drivers behind~~2021. These results were driven by the elevated combined ratio on both a quarterly and year-to-date basis were the extreme drought conditions across North and South Dakota on our multi-peril crop business; above average weather-related losses in North Dakota, South Dakota, and Nebraska; the continued return to average frequency of private passenger and non-standard auto physical damage claims; and higher levels of uninsured/underinsured motorist liability claims in private passenger auto.

~~These elevated losses have been partially offset by continued profitable and strong growth from Direct Auto~~factors discussed in the ~~non-standard segment, along with increased profitability~~Loss and ~~growth from Westminster’s commercial business, particularly during the third quarter.~~Loss Adjustment Expenses section above.

~~NI Holdings~~The Company had fee and other income of ~~$501~~$415 for the three months ended ~~September~~June 30, ~~2021,~~2022, compared to ~~$524~~$520 for the three months ended ~~September~~June 30, ~~2020.~~2021. Fee income attributable to the non-standard auto segment is a key component in measuring its profitability. Fee income on this business decreased ~~slightly~~ to ~~$301~~$254 for the three months ended ~~September~~June 30, ~~2021~~2022, from ~~$336~~$361 for the three months ended ~~September~~June 30, ~~2020.~~2021, due to a reduction in policies that generate fee income.

~~NI Holdings~~The Company had fee and other income of ~~$1,338~~$843 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to ~~$1,332~~$837 for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Fee income on the non-standard auto business ~~increased~~decreased slightly to ~~$994~~$642 for the ~~nine~~six months ended ~~September~~June 30, 2022, from $693 for the six months ended June 30, 2021, ~~from $993 for the nine months ended September 30, 2020.~~due to a reduction in policies that generate fee income.

The following table sets forth our average cash and invested assets, net investment income, and return on average cash and invested assets for the reported periods:

~~Investment~~Net investment income ~~net of investment expense, decreased $173~~increased $305 for the three months ended ~~September~~June 30, ~~2021~~2022, compared to the three months ended ~~September~~June 30, ~~2020. Investment~~2021. Net investment income ~~net of investment expense, decreased $916~~increased $422 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. These ~~decreases~~increases were primarily driven by ~~the continued impact of lower reinvestment rates~~an increase in the ~~fixed income portfolio.~~overall portfolio book value (measured at cost or amortized cost) as well as a higher allocation of invested assets to private placement securities and high dividend yield equities.

The ~~Company's fixed-income portfolio book yield declined 27 basis points~~Company’s net return on average cash and invested assets increased year-over-year, ~~from 2.72% at September 30, 2020 to 2.45% at September 30, 2021. This was~~ driven by a ~~combination~~decrease in average cash and invested assets (measured at fair value) as a result of ~~factors, including a persistent low reinvestment rate environment, ongoing maturities of existing holdings with high embedded yields,~~unfavorable market conditions for both fixed income and ~~significant cash inflows to the~~equity securities as well as higher net investment portfolio from the Company's business operations. The dividend yield of the equity portfolio remained constant despite the ongoing rally in U.S. equity markets given a rotation of the equity allocation into high dividend equities.income.

Net ~~capital gain on investments~~investment gains (losses) consisted of the following:

~~NI Holdings~~The Company had net realized ~~capital~~ gains ~~on investment~~ of ~~$2,733~~$1,027 and ~~$9,510~~$1,965 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, respectively,~~2022, compared to ~~net realized capital~~ gains of ~~$636~~$2,875 and ~~$2,021~~$6,777 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, respectively.~~2021. The Company reported no other-than-temporary losses during any of the periods presented.

~~NI Holdings reported~~The Company experienced a decrease in net ~~loss~~unrealized gains on equity securities of ~~$2,511~~$12,163 and a$18,629 during the three and six months ended June 30, 2022, respectively, driven by the impact of changes in fair value attributable to unfavorable equity markets. The Company experienced an increase in net ~~gain~~unrealized gains on equity securities of ~~$1,224 attributed~~$1,826 and $3,735 during the three and six months ended June 30, 2021, respectively, driven by the impact of changes in fair value attributable to favorable equity markets. In addition to the impact of the overall equity markets, the Company’s sales activity (and resulting gains and losses) will impact the level and direction of the change in the net unrealized ~~appreciation~~gain or loss of its equity securities ~~for~~portfolio. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company had net realized gains on its equity securities of $1,132 and $2,027, respectively, compared to a net ~~gain~~realized gains of ~~$4,466~~$2,550 and ~~a net loss of $641 for~~$6,351 during the three and ~~nine~~six months ended ~~September~~June 30, 2020, respectively. The reduction in net gain compared to the prior year quarter was a reflection of the market recovery in the third quarter of 2020 following the severe declines experienced at the height of the COVID-19 lockdown. Additionally, net realized gains taken on sales during third quarter 2021 contributed to the reduction in unrealized gains as equity markets remained relatively flat. From a year-to-date comparison perspective, the net gain increased in 2021 due to the continued strong performance in the U.S. equity markets in comparison with 2020.2021.

The Company’s fixed income securities are classified as available for sale because weit will, from time to time, make sales of securities that are not impaired, consistent with our investment goals and policies. ~~At September~~The fixed income portion of the portfolio experienced net unrealized losses of $16,283 and $37,220 during the three and six months ended June 30, ~~2021,~~2022, respectively, compared to net unrealized gains (losses) of $2,835 and $(4,322) during the three and six months ended June 30, 2021. The changes were primarily the result of changes in U.S. interest rates. The change in the fair value of fixed income securities is not reflected in net income; rather it is reflected as a separate component (net of income taxes) of other comprehensive income.

For the three months ended June 30, 2022, the Company had a pre-tax loss of $59,051 compared to a pre-tax loss of $3,295 for the three months ended June 30, 2021. The increase in pre-tax loss was largely attributable to the significant catastrophe losses in Nebraska and South Dakota during the quarter, along with the change in net ~~unrealized gains~~investment gains/losses attributable to the impact of equity markets on ~~fixed income securities of $10,062 and net unrealized gains on~~the Company’s equity securities portfolio.

For the six months ended June 30, 2022, the Company had a pre-tax loss of ~~$28,973.~~$56,444 compared to pre-tax income of $9,377 for the six months ended June 30, 2021. The decrease in pre-tax income was largely attributable to the significant catastrophe losses in Nebraska and South Dakota during the second quarter of 2022, along with the change in net investment gains/losses attributable to the impact of equity markets on the Company’s equity securities portfolio.

The Company ~~had net unrealized gains on fixed~~recorded an income ~~securities~~tax benefit of ~~$16,505 and net unrealized gains on equity securities of $27,749.~~

~~For the three months ended September 30, 2021, NI Holdings had pre-tax loss of $6,481 compared to pre-tax income of $4,874~~$12,415 for the three months ended ~~September~~June 30, ~~2020. The decrease in pre-tax results was largely attributable to reduced underwriting profitability.~~

~~For the nine months ended September 30, 2021, NI Holdings had pre-tax income of $2,896~~2022, compared to pre-tax income of $24,157 for the nine months ended September 30, 2020. The decrease in pre-tax results was largely attributable to reduced underwriting profitability, partially offset by the increase in net capital gain on investments.

~~NI Holdings recorded~~an income tax benefit of ~~$1,622~~$561 for the three months ended ~~September~~June 30, ~~2021, compared to income tax expense of $1,188 for the three months ended September 30, 2020.~~2021. Our effective tax rate for the ~~third~~second quarter of ~~2021~~2022 was ~~25.0%~~21.0% compared to an effective tax rate of ~~24.4%~~17.0% for the ~~third~~second quarter of ~~2020.~~2021.

~~NI Holdings~~The Company recorded an income tax ~~expense~~benefit of ~~$707~~$11,847 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to income tax expense of ~~$5,259~~$2,329 for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Our effective tax rate for the first ~~nine~~six months of ~~2021~~2022 was ~~24.4%~~21.0% compared to an effective tax rate of ~~21.8%~~24.8% for the first ~~nine~~six months of ~~2020.~~2021.

A portion of the effective tax rate is ~~due~~attributable to Illinois state income taxes.

For the three months ended ~~September~~June 30, ~~2021, NI Holdings~~2022, the Company had a net loss before non-controlling interest of ~~$4,859~~$46,636 compared to net loss of $2,734 for the three months ended June 30, 2021. The decrease was largely attributable to the significant catastrophe losses in Nebraska and South Dakota during the quarter, along with the change in net investment gains/losses attributable to the impact of equity markets on the Company’s equity securities portfolio.

For the six months ended June 30, 2022, the Company had a net loss before non-controlling interest of $44,597 compared to net income of ~~$3,686~~$7,048 for the ~~three~~six months ended ~~September~~June 30, ~~2020. This~~2021. The decrease was ~~primarily~~largely attributable to ~~reduced underwriting profitability.~~

~~For~~ the ~~nine months ended September 30, 2021, NI Holdings had net income before non-controlling interest~~significant catastrophe losses in Nebraska and South Dakota during the second quarter of ~~$2,189 compared to net income of $18,898 for~~2022, along with the ~~nine months ended September 30, 2020. This decrease~~change in net ~~income was primarily~~investment gains/losses attributable to ~~reduced underwriting profitability, partially offset by~~ the ~~increase in net capital gain~~impact of equity markets on ~~investments.~~the Company’s equity securities portfolio.

For the three months ended ~~September~~June 30, ~~2021, NI Holdings~~2022, the Company had annualized return on average equity, after non-controlling interest, of ~~-5.5%~~(61.4)% compared to annualized return on average equity, after non-controlling interest, of ~~4.6%~~(3.0)% for the three months ended ~~September~~June 30, ~~2020.~~2021.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021, NI Holdings~~2022, the Company had annualized return on average equity, after non-controlling interest, of ~~0.9%~~(28.7)% compared to annualized return on average equity, after non-controlling interest, of ~~8.0%~~4.3% for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

Average equity is calculated as the average between beginning and ending shareholders’ equity, excluding non-controlling interest for the period.

At September 30, 2021, NI Holdings’ total assets increased by $78,883, or 12.8%, from December 31, 2020. Cash and investments increased slightly due to normal operations. Premiums and agents’ balances receivable increased due to the recognition of crop insurance written premiums. Reinsurance recoverables on losses increased primarily due to significantly higher multi-peril crop losses along with recoveries associated with the June catastrophe event in North Dakota. The receivable from the Federal Crop Insurance Corporation also increased due to the significantly higher multi-peril crop losses. Deferred policy acquisition costs increased primarily due to strong year-to-date premium growth in the non-standard auto and commercial segments.

At September 30, 2021, total liabilities increased by $83,779, or 31.2%, from December 31, 2020. Unpaid losses and loss adjustment expenses increased due to higher loss experience during the first nine months of 2021, especially the multi-peril crop business. Unearned premiums increased due to an increase in direct written premiums in all segments including the multi-peril crop business. The first installment of $6,667 was paid to the former shareholder of Westminster during the first quarter of 2021. Other liabilities increased due to commission and other expense accruals.

Total shareholders’ equity decreased by $4,896 during the nine months ended September 30, 2021. The decrease in shareholders’ equity reflects a consolidated net income of $2,189 for the nine-month period, share repurchases of $3,211, and a decrease of $5,090 in the fair market value of our fixed income portfolio which generally fluctuates with market interest rates at the measurement dates.

~~The Company derives its revenue primarily from net premiums earned, net investment income, and net capital gain (loss) on investments.~~

Gross premiums written is equal to direct premiums written and assumed premiums before the effect of ceded reinsurance. Gross premiums written are recognized upon sale of new insurance contracts or renewal of existing contracts. Net premiums written is equal to gross premiums written less premiums ceded or paid to reinsurers (ceded premiums written).

Premiums earned is the earned portion of net premiums written. Gross premiums written include all premiums recorded by an insurance company during a specified policy period. Insurance premiums on property and casualty policies are recognized in proportion to the underlying risk insured and are earned ratably over the duration of the policies or, in the case of crop insurance, over the period of risk to the Company. At the end of each accounting period, the portion of the premiums that is not yet earned is included in unearned premiums and is realized as revenue in subsequent periods over the remaining term of the policy or period of risk. The Company’s property and casualty policies, other than certain types of auto and non-standard auto policies, typically have a term of twelve months.

Due to the nature of the crop planting and harvesting cycle and the deadlines for filing and processing claims under the federal crop insurance program, insurance premiums for crop insurance are recognized and earned during the period of risk, which usually begins in spring and ends with harvest in the fall. In the case of prevented planting claims, the period of risk is shortened to the date a valid prevented planting claim is filed, when the Company believes the period of risk has ended. Under the federal crop insurance program, farmers must purchase crop insurance with respect to spring planted crops by March 15. By July 15, the farmer must report the number of acres he has planted in each crop. On September 1, the insurer bills the farmer for the insurance premium, which is due and payable by the farmer by October 1. If the farmer does not pay the premium by such date, the insurer must essentially provide a loan to the farmer in an amount equal to the premium at an annual interest rate of 15% because the insurer is required to pay the farmer’s portion of the premium to the Federal Crop Insurance Corporation (“FCIC”) by November 15, regardless of whether the farmer pays the premium to the insurer. Except for claims occurring in the spring (primarily for prevented planting and required replanting claims), claims are required to be filed with the FCIC by December 15. A different cycle exists for crops planted in the fall, such as winter wheat, but the vast majority of crop insurance written by the Company covers crops planted in the spring.

The Company invests its excess cash in fixed income and equity securities. Investment income includes interest and dividends earned on invested assets, and is reported net of investment-related expenses. Net capital gains and losses on investments are reported separately from net investment income. The Company recognizes realized capital gains when investments are sold for an amount greater than their cost or amortized cost (in the case of fixed income securities) and realized capital losses when investments are written down as a result of other-than-temporary impairments or are sold for an amount less than their cost or amortized cost. The Company recognizes changes in unrealized gains and losses of equity securities in net income as part of net capital gains and losses on investments. These gains and losses may be significant given the fair market value of the equity portfolio and the inherent volatility in equity markets.

~~The changes in unrealized gains and losses on fixed income securities are recorded in other comprehensive income (loss), net of income taxes.~~

The portfolio of investments for NI Holdings and its insurance subsidiaries is managed by Conning, Inc., and Disciplined Growth Investors. These investment managers have discretion to buy and sell securities in accordance with the investment policy approved by our Board of Directors.

The Company’s expenses consist primarily of losses and loss adjustment expenses (“LAE”), amortization of deferred policy acquisition costs, other underwriting and general expenses, and income taxes.

Losses and LAE represent the largest expense item and include (1) claim payments made, (2) estimates for future claim payments and changes in those estimates from prior periods, and (3) costs associated with investigating, defending, and adjusting claims, including legal fees.

~~Amortization of deferred policy acquisition costs and other underwriting and general expenses~~

Expenses incurred to underwrite risks are referred to as policy acquisition costs. Policy acquisition costs consist of commission expenses, state premium taxes, and certain other underwriting expenses that vary with and are primarily related to the writing and acquisition of new and renewal business. These policy acquisition costs are deferred and amortized over the effective period of the related insurance policies. Other underwriting and general expenses consist of salaries, professional fees, office supplies, depreciation, and all other operating expenses not otherwise classified separately.

Current income taxes represent amounts paid or payable to the federal government and certain states whose payment is based upon net income (subject to regulatory adjustments) generated by the Company. As noted above, it does not include state premium taxes that are based purely on the collection of policyholder premiums.

NI Holdings uses the asset and liability method of accounting for deferred income taxes. Deferred income taxes arise from the recognition of temporary differences between financial statement carrying amounts and the income tax bases of its assets and liabilities. A valuation allowance is provided when it is more likely than not that some portion of the deferred income tax asset will not be realized. The effect of a change in tax rates is recognized in the period of the enactment date. Total income taxes reflect both current income taxes and the change in the net deferred income tax asset or liability, excluding amounts attributed to accumulated other comprehensive income.

Our consolidated financial statements are prepared on the basis of GAAP. We also prepare financial statements for each of our insurance company subsidiaries based on statutory accounting principles and file them with insurance regulatory authorities in the states where they do business. Management evaluates our operations by monitoring key measures of growth and profitability. We believe that disclosure of certain non-GAAP financial measures enhances investor understanding of our financial performance. The following provides further explanation of the key measures that management uses to evaluate our results:

The loss and LAE ratio is the ratio (expressed as a percentage) of losses and LAE incurred to premiums earned. The Company measures this ratio on an accident and calendar year basis to measure underwriting profitability. An accident year loss ratio measures losses and LAE for insured events occurring in a particular year, regardless of when they are reported, as a percentage of premiums earned during that year. A calendar year loss ratio measures losses and LAE for insured events occurring during a particular year and the change in loss reserves from prior policy years as a percentage of premiums earned during that year.

The expense ratio is the ratio (expressed as a percentage) of amortization of deferred policy acquisition costs and other underwriting and general expenses (attributable to insurance operations) to premiums earned, and measures the Company’s operational efficiency in producing, underwriting, and administering our insurance business.

The Company’s combined ratio is the ratio (expressed as a percentage) of the sum of losses and LAE incurred and expenses to premiums earned, and measures our overall underwriting profit. A combined ratio below 100% generally indicates a profitable book of business.

Net premiums written comprise direct and assumed premiums written, less ceded premiums written. Direct premiums written are the total policy premiums, net of cancellations, associated with policies issued and underwritten by the Company. Assumed premiums written are the total premiums associated with the insurance risk transferred to us by other insurance and reinsurance companies pursuant to reinsurance contracts. Ceded premiums written is the portion of direct premiums written that we

cede to our reinsurers under our reinsurance contracts. Net premiums earned are recognized ratably over the life of a policy and differ from net premiums written, which are recognized on the effective date of the policy.

Underwriting gain (loss) measures the pre-tax profitability of the Company’s insurance operations. It is derived by subtracting losses and LAE, amortization of deferred policy acquisition costs, and other underwriting and general expenses from net premiums earned. Each of these items is presented as a caption in the Company's Consolidated Statements of Operations.

The preparation of financial statements in accordance with GAAP requires both the use of estimates and judgment relative to the application of appropriate accounting policies. The Company is required to make estimates and assumptions in certain circumstances that affect amounts reported in the Unaudited Consolidated Financial Statements and related footnotes. We evaluate these estimates and assumptions on an ongoing basis based on historical developments, market conditions, industry trends, and other information that we believe to be reasonable under the circumstances. There can be no assurance that actual results will conform to these estimates and assumptions or that reported results of operations will not be materially and adversely affected by the need to make accounting adjustments to reflect changes in these estimates and assumptions from time to time. Our critical accounting policies are more fully described in ~~our Management's~~Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations” presented in ~~Part II, Item 7 of~~ our 2021 Annual ~~Report on Form 10-K for the year ended December 31, 2020.~~Report. There have been no changes in our critical accounting policies from December 31, ~~2020.~~2021.

~~NI Holdings~~The Company generates sufficient funds from its operations and maintains a high degree of liquidity in its investment portfolio to meet the demands of claim settlements and operating expenses. The primary sources of funds are premium collections, investment earnings, and maturing investments. In 2017, we raised $93,145 in net proceeds from our ~~initial public offering (“IPO”),~~IPO, which we planned to use for strategic acquisitions.

In 2018, we used $17,000 for the acquisition of Direct ~~Auto.~~Auto, which was paid in cash at closing. On January 1, 2020, we acquired Westminster for $40,000. We paid $20,000 at the time of closing. The terms of the acquisition agreement included payment of the remaining $20,000, subject to certain adjustments, in three equal installments on each of the first and second anniversaries of the closing, and on the first business day of the month preceding the third anniversary of the closing. The first ~~installment was~~two installments were paid ~~during~~in January 2021 and January 2022. The Company anticipates using the ~~first quarter of 2021.~~net proceeds from the IPO to satisfy the remaining obligation in December 2022.

We currently anticipate that cash generated from our operations and available from our investment portfolio, along with the remaining IPO net proceeds, will be sufficient to fund our operations.

The Company’s philosophy is to provide sufficient cash flows from operations to meet its obligations in order to minimize the forced sales of investments. The Company maintains a portion of its investment portfolio in relatively short-term and highly liquid assets to ensure the availability of funds.

The change in cash and cash equivalents for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, and ~~2020~~2021, were as follows:

For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, net cash provided by operating activities totaled ~~$9,489~~$13,647 compared to ~~$30,944~~$21,708 a year ago. ~~Consolidated net income~~This decrease was primarily driven by higher claim payments related to catastrophe losses during the current quarter, lower realized investment gains, and higher levels of ~~$2,189 for the nine months ended September 30, 2021 compared to consolidated net income of $18,898 for the same period a year ago. The decrease~~premiums and agents’ balances receivable, which were partially offset by an increase in ~~consolidated net income, along with changes in net capital gain~~payments received on ~~investments, reinsurance~~reinsurances recoverables on ~~losses, and the receivable from the Federal Crop Insurance Corporation, were offset by the changes in unpaid losses and LAE.~~losses.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, net cash used by investing activities totaled ~~$52,471~~$12,075 compared to ~~$10,377~~$52,140 a year ago. InThis decrease in cash used was attributable to the significant catastrophe losses in Nebraska and South Dakota during the current quarter, which resulted in less available cash for investment purchases. The decrease was also attributable to the Company investing a higher level of excess cash during the first ~~nine months~~quarter of ~~2021, the Company invested excess cash generated from operations and the implementation of the intercompany reinsurance pooling agreement into longer term investments.~~2021.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, net cash used by financing activities totaled ~~$10,366~~$9,163 compared to ~~$11,394~~$9,422 a year ago. ~~The~~This decrease was primarily attributable to the Company ~~paid the first installment of $6,667 of the additional consideration for Westminster during the first quarter of 2021. The Company repurchased~~repurchasing shares of its own common stock for ~~$3,211~~$1,931 during ~~2021,~~the first half of 2022, compared to ~~$11,363~~$2,267 during ~~2020.~~the first half of 2021.

As a standalone entity, and outside of the net proceeds from the IPO, ~~NI Holdings’~~the Company’s principal source of long-term liquidity will be dividend payments from its directly-owned subsidiaries.

Nodak Insurance is restricted by the insurance laws of North Dakota as to the amount of dividends or other distributions it may pay to NI Holdings. North Dakota law sets the maximum amount of dividends that may be paid by Nodak Insurance during any twelve-month period after notice to, but without prior approval of, the North Dakota Insurance Department. This amount cannot exceed the lesser of (i) 10% of the Company’s surplus as regards policyholders as of the preceding December 31, or (ii) the Company’s statutory net income for the preceding calendar year (excluding realized capital gains), less any prior dividends paid during such twelve-month period. In addition, any insurance company other than a life insurance company may carry forward net income from the preceding two calendar years, not including realized capital gains, less any dividends actually paid during those two calendar years. Dividends in excess of this amount are considered “extraordinary” and are subject to the approval of the North Dakota Insurance Department.

The amount available for payment of dividends from Nodak Insurance to us during ~~2021~~2022 without the prior approval of the North Dakota Insurance Department is approximately ~~$21,628~~$21,493 based upon the surplus of Nodak Insurance at December 31, ~~2020.~~2021. Prior to its payment of any ~~extraordinary~~ dividend, Nodak Insurance will be required to provide notice of the dividend to the North Dakota Insurance Department. This notice must be provided to the North Dakota Insurance Department 30 days prior to the payment of an extraordinary dividend and 10 days prior to the payment of an ordinary dividend. The North Dakota Insurance Department has the power to limit or prohibit dividend payments if an insurance company is in violation of any law or regulation. These restrictions

or any subsequently imposed restrictions may affect our future liquidity. No dividends were declared or paid by Nodak Insurance during the ~~nine~~six months ended ~~September~~June 30, ~~2021. The Nodak Insurance Board of Directors declared and paid a $6,000 dividend to NI Holdings during~~2022, or the year ended December 31, ~~2020.~~2021.

Direct Auto re-domesticated from Illinois to North Dakota during 2021, and is restricted by the insurance laws of Illinois as to the amount of dividends or other distributions it may pay to NI Holdings. Illinois law sets the maximum amount of dividends that may be paid by Direct Auto during any twelve-month period after notice to, but without prior approval of, the Illinois Department of Insurance. This amount cannot exceed the greater of (i) 10% of the Company’s surplus as regards policyholders as of the preceding December 31, or (ii) the Company’s statutory net income for the preceding calendar year (excluding realized capital gains). Dividends in excess of this amount are considered “extraordinary” and arenow subject to the ~~approval of the Illinois Department of~~same dividend restrictions as Nodak Insurance.

The amount available for payment of dividends from Direct Auto to ~~NI Holdings~~us during ~~2021~~2022 without the prior approval of the ~~Illinois~~North Dakota Insurance Department ~~of Insurance~~ is ~~$3,582~~approximately $3,796 based upon the surplus of Direct Auto at December 31, 2020. Prior to its payment of any dividend, Direct Auto will be required to provide notice of the dividend to the Illinois Department of Insurance. This notice must be provided to the Illinois Department of Insurance within five business days following declaration of any dividend and no less than 30 days prior to the payment of an extraordinary dividend or 10 days prior to the payment of an ordinary dividend. The Illinois Department of Insurance has the power to limit or prohibit dividend payments if Direct Auto is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity.2021. No dividends were declared or paid by Direct Auto during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, or the year ended December 31, ~~2020.~~2021.

Westminster re-domesticated from Maryland to North Dakota during 2021, and is now subject to the same dividend restrictions as Nodak Insurance. The amount available for payment of dividends from Westminster to ~~NI Holdings~~us during ~~2021~~2022 without the prior approval of the ~~Maryland~~North Dakota Insurance ~~Administration~~Department is ~~$505~~approximately $2,471 based upon the ~~statutory net investment income~~surplus of Westminster ~~for the year ended~~at December 31, 2020 and the three preceding years. Prior to its payment of any dividend, Westminster will be required to provide notice of the dividend to the Maryland Insurance Administration. This notice must be provided to the Maryland Insurance Administration within five business days following declaration of any dividend and no less than 30 days prior to the payment of an extraordinary dividend or 10 days prior to the payment of an ordinary dividend. The Maryland Insurance Administration has the power to limit or prohibit dividend payments if Westminster is in violation of any law or regulation. These restrictions or any subsequently imposed restrictions may affect our future liquidity.2021. No dividends were declared or paid by Westminster during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022, or the year ended December 31, ~~2020.~~

NI Holdings has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital reserves.

For a discussion of recent accounting pronouncements, see Part I, Item 1, Note 2, ~~to the Unaudited Consolidated Financial Statements, included elsewhere~~“Basis of Presentation and Accounting Policies--Recent Accounting Pronouncements” in this Quarterly Report on Form 10-Q.

The Company’s assessment of market risk as of ~~September~~June 30, ~~2021~~2022, indicates there have been no material changes in the quantitative and qualitative disclosures from those in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our 2021 Annual Report ~~on Form 10-K for the year ended December 31, 2020~~ filed with the SEC.

The Company’s Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as required by Exchange Act Rules 240.13a-15(b) and 15d-15(b)) as of ~~September~~June 30, ~~2021.~~2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s current disclosure controls and procedures are effective.

In the ordinary course of business, we periodically review our system of internal control over financial reporting to identify opportunities to improve our controls and increase efficiency, while ensuring that we maintain an effective internal control environment. In addition, when we acquire new businesses, we incorporate our controls and procedures into the acquired business as part of our integration activities. Since 2018, we have invested significant resources to comprehensively document and analyze our system of internal control over financial reporting. We have identified areas requiring improvement, and continue to make selected improvements to processes and controls to address issues identified through this review. These improvements may include such activities as implementing new, more efficient systems, automating manual processes, formalizing policies and procedures, increasing monitoring controls, and updating existing systems. We plan to continue this initiative as well as prepare for the first audit of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002 for the annual period ending December 31, 2022, which may result in changes to our internal control over financial reporting.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~September~~June 30, ~~2021,~~2022, to which this report relates that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

We are party to litigation in the normal course of business. Based upon information presently available to us, we do not consider any litigation to be material. However, given the uncertainties attendant to litigation, we cannot assure you that our results of operations and financial condition will not be materially adversely affected by any litigation.

There have been no material changes in our assessment of our risk factors from those set forth in Part I, Item 1A, “Risk Factors” in our 2021 Annual ~~Report on Form 10-K for the year ended December 31, 2020.~~Report.

All dollar amounts included in Item 2 herein, except per share amounts, are in thousands.

The Company has not sold any unregistered securities within the past three years.

On January 17, 2017, ~~the SEC declared effective~~ our registration statement on Form S-1 registering our common ~~stock.~~stock was declared effective by the SEC. On March 13, 2017, the Company completed the IPO of 10,350,000 shares of common stock at a price of $10.00 per share. The Company received net proceeds of $93,145 from the offering, after deducting underwriting discounts and offering expenses. Griffin Financial Group, LLC acted as our placement agent in connection with the IPO.

Direct Auto was acquired on August 31, 2018, with $17,000 of the net proceeds from the IPO.

~~Westminster was acquired on~~On January 1, 2020, we acquired Westminster for ~~a purchase price of $40,000, subject to certain adjustments. The Company~~$40,000. We paid $20,000 ~~from~~at the ~~net proceeds from the IPO at~~ time of closing. The terms of the acquisition agreement included payment of the remaining $20,000, subject to certain adjustments, in three equal installments on each of the first and second anniversaries of the closing, and on the first business day of the month preceding the third anniversary of the closing. The first ~~installment was~~two installments were paid ~~during the first quarter of 2021.~~in January 2021 and January 2022. The Company anticipates using the net proceeds from the IPO to satisfy ~~these obligations.~~the remaining obligation in December 2022.

From time to time, the Company may also repurchase its own stock. These repurchases may be used to satisfy its obligations under the equity incentive plans or may be done for other reasons. To date, the Company has used the net proceeds from the IPO to fund these buyback programs.

There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on January 17, 2017.

On February 28, 2018, our Board of Directors approved an authorization for the repurchase of up to approximately $10,000 of the Company’s outstanding common stock. We completed the repurchase of 191,265 shares of our common stock for $2,966 during 2018, and an additional 116,034 shares for $2,006 during 2019. During the six months ended June 30, 2020, we completed the repurchase of 402,056 shares of our common stock for $4,996 to close out this authorization.

On May 4, 2020, our Board of Directors approved an ~~additional~~ authorization for the repurchase of up to approximately $10,000 of the Company’s outstanding common stock. During the year ended December 31, 2020, we completed the repurchase of 454,443 shares of our common stock for $7,238 under this ~~new~~ authorization. During the nine months ended September 30, 2021, we repurchased an additional 144,110 shares of our common stock for $2,762 to close out this authorization.

On August 11, 2021, our Board of Directors approved an additional authorization for the repurchase of up to approximately $5,000 of the Company’s outstanding common stock. During the ~~three~~six months ended ~~September 30,~~December 31, 2021, we completed the repurchase of ~~24,283~~81,095 shares of our common stock for ~~$449~~$1,554 under this ~~new~~ authorization. During the six months ended June 30, 2022, we completed the repurchase of 111,244 shares of our common stock for $1,932 under this authorization.

On May 9, 2022, our Board of Directors approved an additional authorization for the repurchase of up to approximately $10,000 of the Company’s outstanding common stock.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on ~~November 5, 2021.~~August 4, 2022.

	September 30, 2021									June 30, 2022
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. Government and agencies	$	13,617	$	582	$	(84	)	$	14,115	$	13,017	$	26	$	(649	)	$	12,394
Obligations of states and political subdivisions		70,756		2,691		(286	)		73,161		65,836		113		(5,177	)		60,772
Corporate securities		151,028		5,768		(637	)		156,159		158,812		46		(13,080	)		145,778
Residential mortgage-backed securities		42,148		1,002		(195	)		42,955		43,868		1		(4,043	)		39,826
Commercial mortgage-backed securities		32,810		1,147		(49	)		33,908		34,498		8		(3,306	)		31,200
Asset-backed securities		50,995		258		(135	)		51,118		45,831		3		(3,765	)		42,069
Redeemable preferred stocks											4,746		0-		(686	)		4,060
Total fixed income securities	$	361,354	$	11,448	$	(1,386	)	$	371,416	$	366,608	$	197	$	(30,706	)	$	336,099

	December 31, 2020									December 31, 2021
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. Government and agencies	$	13,334	$	1,055	$	(6	)	$	14,383	$	13,118	$	467	$	(87	)	$	13,498
Obligations of states and political subdivisions		61,001		3,278		(35	)		64,244		84,668		2,979		(353	)		87,294
Corporate securities		119,826		8,755		(147	)		128,434		144,476		4,214		(1,069	)		147,621
Residential mortgage-backed securities		35,017		1,478		(1	)		36,494		26,190		266		(300	)		26,156
Commercial mortgage-backed securities		23,976		1,700		(21	)		25,655		32,878		815		(161	)		33,532
Asset-backed securities		50,751		535		(86	)		51,200		52,604		131		(313	)		52,422
Redeemable preferred stocks											4,008		136		(16	)		4,128
Total fixed income securities	$	303,905	$	16,801	$	(296	)	$	320,410	$	357,942	$	9,008	$	(2,299	)	$	364,651

	September 30, 2021				June 30, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due to mature:
One year or less	$	17,815	$	17,978	$	17,381	$	17,373
After one year through five years		80,664		83,892		96,141		92,562
After five years through ten years		85,609		88,611		80,132		71,557
After ten years		51,313		52,954		44,011		37,452
Mortgage / asset-backed securities		125,953		127,981		124,197		113,095
Redeemable preferred stocks						4,746		4,060
Total fixed income securities	$	361,354	$	371,416	$	366,608	$	336,099

	December 31, 2020				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due to mature:
One year or less	$	17,722	$	17,933	$	14,457	$	14,586
After one year through five years		86,709		91,457		82,429		84,760
After five years through ten years		59,408		64,987		82,270		84,173
After ten years		30,322		32,684		63,106		64,894
Mortgage / asset-backed securities		109,744		113,349		111,672		112,110
Redeemable preferred stocks						4,008		4,128
Total fixed income securities	$	303,905	$	320,410	$	357,942	$	364,651

	September 30, 2021
	Less than 12 Months					Greater than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Fixed income securities:
U.S. Government and agencies	$	2,603	$	(84	)	$	0-	$	0-		$	2,603	$	(84	)
Obligations of states and political subdivisions		10,285		(286	)		0-		0-			10,285		(286	)
Corporate securities		38,474		(628	)		535		(9	)		39,009		(637	)
Residential mortgage-backed securities		17,333		(195	)		0-		0-			17,333		(195	)
Commercial mortgage-backed securities		5,555		(49	)		0-		0-			5,555		(49	)
Asset-backed securities		14,700		(131	)		1,242		(4	)		15,942		(135	)
Total fixed income securities	$	88,950	$	(1,373	)	$	1,777	$	(13	)	$	90,727	$	(1,386	)

	Three Months Ended September 30, 2021									Nine Months Ended September 30, 2021
	Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total			Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total
Net income (loss)	$	(4,737	)	$	(122	)	$	(4,859	)	$	2,288		$	(99	)	$	2,189

Other comprehensive loss, before income taxes:
Holding losses on investments		(1,943	)		(58	)		(2,001	)		(5,674	)		(223	)		(5,897	)
Reclassification adjustment for net realized capital gain included in net income (loss)		(118	)		(2	)		(120	)		(544	)		(2	)		(546	)
Other comprehensive loss, before income taxes		(2,061	)		(60	)		(2,121	)		(6,218	)		(225	)		(6,443	)
Income tax benefit related to items of other comprehensive loss		433			12			445			1,306			47			1,353
Other comprehensive loss, net of income taxes		(1,628	)		(48	)		(1,676	)		(4,912	)		(178	)		(5,090	)

Comprehensive loss	$	(6,365	)	$	(170	)	$	(6,535	)	$	(2,624	)	$	(277	)	$	(2,901	)

	Three Months Ended September 30, 2020									Nine Months Ended September 30, 2020
	Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total			Attributable to NI Holdings, Inc.			Attributable to Non- Controlling Interest			Total
Net income	$	3,664		$	22		$	3,686		$	18,810		$	88		$	18,898

Other comprehensive income, before income taxes:
Holding gains on investments		2,038			11			2,049			8,851			119			8,970
Reclassification adjustment for net realized capital gain (loss) included in net income		(539	)		8			(531	)		(684	)		(2	)		(686	)
Other comprehensive income, before income taxes		1,499			19			1,518			8,167			117			8,284
Income tax expense related to items of other comprehensive income		(315	)		(4	)		(319	)		(1,715	)		(25	)		(1,740	)
Other comprehensive income, net of income taxes		1,184			15			1,199			6,452			92			6,544

Comprehensive income	$	4,848		$	37		$	4,885		$	25,262		$	180		$	25,442

Fair Value of Consideration:
Cash consideration transferred	$	20,000
Present value of future cash consideration		18,787
Total cash consideration	$	38,787

Fair Value of Identifiable Assets Acquired and Liabilities Assumed:
Identifiable net assets:
Cash and cash equivalents	$	19,297
Fixed income securities		12,073
Equity securities		2,705
Other investments		735
Premiums and agents' balances receivable		8,507
Reinsurance recoverables on losses		763
Accrued investment income		70
Property and equipment		2,376
Federal income tax recoverable		138
State insurance licenses (included in goodwill and other intangibles)		1,800
Distribution network (included in goodwill and other intangibles)		6,700
Trade name (included in goodwill and other intangibles)		500
Value of business acquired (included in goodwill and other intangibles)		4,750
Other assets		76
Unpaid losses and loss adjustment expenses		(8,568	)
Unearned premiums		(16,611	)
Deferred income taxes, net		(1,583	)
Reinsurance premiums payable		(565	)
Accrued expenses and other liabilities		(1,132	)
Total identifiable net assets	$	32,031

Goodwill	$	6,756

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Fixed income securities	$	2,104	$	2,065	$	6,227	$	6,655
Equity securities		275		278		820		903
Real estate		156		170		469		440
Cash and cash equivalents		1		1		3		27
Total gross investment income		2,536		2,514		7,519		8,025
Investment expenses		823		628		2,560		2,150
Net investment income	$	1,713	$	1,886	$	4,959	$	5,875

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Fixed income securities	$	2,406	$	2,112	$	4,567	$	4,123
Equity securities		395		280		724		545
Real estate		75		157		241		313
Cash and cash equivalents		10		1		12		2
Total gross investment income		2,886		2,550		5,544		4,983
Investment expenses		871		840		1,876		1,737
Net investment income	$	2,015	$	1,710	$	3,668	$	3,246

~~Level II~~: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level II includes fixed income securities with quoted prices that are traded less frequently than exchange traded instruments. Valuation techniques include matrix pricing which is a mathematical technique used widely in the industry to value fixed income securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. ~~Level III: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).~~	Level I:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	Level II:	Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level II includes fixed income securities with quoted prices that are traded less frequently than exchange traded instruments. Valuation techniques include matrix pricing which is a mathematical technique used widely in the industry to value fixed income securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

	Level III:	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Direct losses and loss adjustment expenses	$	87,453		$	59,936		$	201,630		$	153,203		$	110,670		$	76,599		$	156,165		$	114,177
Assumed losses and loss adjustment expenses		2,308			2,436			5,216			3,538			1,535			1,960			1,545			2,908
Ceded losses and loss adjustment expenses		(24,019	)		(8,536	)		(41,297	)		(20,119	)		(3,610	)		(15,641	)		(8,986	)		(17,278	)
Net losses and loss adjustment expenses	$	65,742		$	53,836		$	165,549		$	136,622		$	108,595		$	62,918		$	148,724		$	99,807

	September 30, 2021		December 31, 2020
Case reserves	$	156,848	$	89,903
IBNR reserves		22,728		15,847
Liability for unpaid LAE	$	179,576	$	105,750
Reinsurance recoverables on losses		42,678		8,710
Net unpaid losses and LAE	$	136,898	$	97,040

	June 30, 2022			December 31, 2021			Estimated Useful Life
Cost:
Land	$	1,403		$	1,403		indefinite
Building and improvements		13,952			14,193		10–40 years
Electronic data processing equipment		1,554			1,518		5–7 years
Furniture and fixtures		2,321			2,885		5–7 years
Automobiles		1,195			1,228		2–3 years
Gross cost		20,425			21,227

Accumulated depreciation		(10,588	)		(11,358	)
Total property and equipment, net	$	9,837		$	9,869

	September 30, 2021			December 31, 2020			Estimated Useful Life
Cost:
Real estate	$	15,467		$	15,313		10-31 years
Electronic data processing equipment		1,547			1,271		5-7 years
Furniture and fixtures		2,908			2,867		5-7 years
Automobiles		1,271			1,275		2-3 years
Gross cost		21,193			20,726

Accumulated depreciation		(11,244	)		(10,827	)
Total property and equipment, net	$	9,949		$	9,899

September 30, 2021	Gross Carrying Amount		Accumulated Amortization		Net
June 30, 2022							Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization:
Trade names	$	748	$	241	$	507	$	748	$	315	$	433
Distribution network		6,700		651		6,049		6,700		931		5,769
Total subject to amortization		7,448		892		6,556		7,448		1,246		6,202

Not subject to amortization – state insurance licenses		1,900		0-		1,900
Not subject to amortization :
State insurance license								1,900		0-		1,900
Total	$	9,348	$	892	$	8,456	$	9,348	$	1,246	$	8,102

Year ending December 31,	Amortization Expense		Amount
2021	$	118
2022		472
2022 (six months remaining)			$	236
2023		455		455
2024		422		422
2025		422		422
2026				422
Thereafter		4,667		4,245
Total other intangible assets with finite lives	$	6,556	$	6,202

	Pool Percentage
Nodak Insurance Company	66.0	%
American West Insurance Company	7.0	%
Primero Insurance Company	3.0	%
Battle Creek Mutual Insurance Company	2.0	%
Direct Auto Insurance Company	13.0	%
Westminster American Insurance Company	9.0	%
Total	100.0	%

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	1,626	$	6,055	$	1,360	$	4,398
Investments		10,641		5,543		11,618		10,610
Premiums and agents’ balances receivable		5,144		4,738		5,799		5,038
Deferred policy acquisition costs		510		479		618		499
Pooling receivable ⁽¹⁾		0-		920
Reinsurance recoverables on losses ⁽²⁾		13,235		5,646		3,121		10,173
Accrued investment income		48		27		57		51
Deferred income tax asset		155		101
Property and equipment		328		337		325		325
Pooling receivable (1)						6,900		0-
Deferred income taxes						623		142
Other assets		49		49		58		52
Total assets	$	31,736	$	23,895	$	30,479	$	31,288

Liabilities:
Unpaid losses and loss adjustment expenses	$	3,297	$	2,445	$	3,941	$	2,937
Unearned premiums		2,535		2,381		3,458		2,544
Notes payable ⁽¹⁾		3,000		3,000		3,000		3,000
Pooling payable (1)						0-		5,580
Reinsurance losses payable ⁽²⁾		11,872		11,221		10,718		12,754
Pooling payable ⁽¹⁾		6,393		0-
Accrued expenses and other liabilities		371		303		6,790		264
Total liabilities		27,468		19,350		27,907		27,079

Equity:
Non-controlling interest		4,268		4,545		2,572		4,209
Total equity		4,268		4,545		2,572		4,209

Total liabilities and equity	$	31,736	$	23,895	$	30,479	$	31,288


(1)	Amount fully eliminated in consolidation.
	(2)	Amount ~~partly~~partially eliminated in consolidation.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenues:
Net premiums earned	$	1,690		$	1,832		$	3,082		$	3,095
Fee and other income (expenses)		(2	)		1			(7	)		(2	)
Net investment income		27			15			40			23
Total revenues		1,715			1,848			3,115			3,116

Expenses:
Losses and loss adjustment expenses		2,171			1,531			2,974			2,269
Amortization of deferred policy acquisition costs		325			397			637			669
Other underwriting and general expenses		157			31			274			147
Total expenses		2,653			1,959			3,885			3,085

Income (loss) before income taxes		(938	)		(111	)		(770	)		31
Income tax expense (benefit)		(212	)		(21	)		(174	)		8
Net income (loss)	$	(726	)	$	(90	)	$	(596	)	$	23

Year ending December 31,	Estimated Future Minimum Commitments		Estimated Future Minimum Commitments
2021	$	63
2022		319
2022 (six months remaining)			$	192
2023		358		358
2024		320		320
2025		286		286
2026				291
Thereafter		1,066		775
Total minimum future commitments	$	2,412	$	2,222

	RSUs			Weighted-Average Grant-Date Fair Value Per Share
Units outstanding and unearned at January 1, 2020		96,540		$	16.47
RSUs granted during 2020		66,000			14.27
RSUs earned during 2020		(46,760	)		16.33
Units outstanding and unearned at December 31, 2020		115,780		$	15.27

RSUs granted during 2021		58,700			18.76
RSUs earned during 2021		(60,720	)		15.73
Units outstanding and unearned at September 30, 2021		113,760		$	16.83

	PSUs			Weighted-Average Grant-Date Fair Value Per Share		PSUs			Weighted-Average Grant-Date Fair Value Per Share
Units outstanding at January 1, 2020		111,000		$	15.27
PSUs granted during 2020 (at target)		63,600			14.26
Units outstanding at December 31, 2020		174,600		$	15.15

Units outstanding at January 1, 2021							174,600		$	15.15
PSUs granted during 2021 (at target)		64,600			18.64		64,600			18.64
PSUs earned during 2021		(70,363	)		16.25		(70,363	)		16.25
Performance adjustment⁽¹⁾		24,300			16.25		24,300			16.25
Forfeitures		(2,537	)		16.25		(2,537	)		16.25
Units outstanding at September 30, 2021		190,600		$	16.06
Units outstanding at December 31, 2021							190,600			16.06

PSUs granted during 2022 (at target)							61,800			18.10
PSUs earned during 2022							(86,684	)		15.21
Performance adjustment (1)							31,200			15.21
Forfeitures							(6,916	)		15.21
Units outstanding at June 30, 2022							190,000			17.00

Period in 2021	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾		Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ⁽¹⁾ (in thousands)
July 1-31, 2021		16,734	$	19.33		16,734	$	172
August 1-31, 2021		12,735		19.42		12,735		4,925
September 1-30, 2021		20,393		18.35		20,393		4,551
Total		49,862	$	18.95		49,862	$	4,551

Period in 2022	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) (in thousands)
April 1-30, 2022		20,466	$	16.40		20,466	$	2,111
May 1-31, 2022		20,596		16.39		20,596		11,772
June 1-30, 2022		15,310		16.88		15,310		11,514
Total		56,372	$	16.58		56,372	$	11,514


⁽¹⁾	Shares purchased pursuant to ~~the May 4, 2020 publicly announced share repurchase authorization of up to approximately $10,000 of the Company’s outstanding common stock, and~~ the August 11, 2021 publicly announced share repurchase authorization of up to approximately $5,000 of the Company’s outstanding common stock.

(2)	Maximum dollar value of shares that may yet be purchased consist of up to approximately $1,514 under the August 11, 2021, publicly announced repurchase authorization and up to approximately $10,000 under the May 9, 2022, publicly announced share repurchase authorization.

Exhibit Number		Description
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Linkbase Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	NI HOLDINGS, INC.

	/s/ Michael J. Alexander
	Michael J. Alexander
	President and Chief Executive Officer (Principal Executive Officer)


	/s/ Seth C. Daggett
	Seth C. Daggett
	Chief Financial Officer (Principal Financial ~~Officer)~~


	~~/s/ Timothy J. Milius~~
	~~Timothy J. Milius~~
	~~Chief Accounting~~ Officer ( and Principal Accounting Officer)