What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-15 compared with 2023-03-08 · 754 added, 734 removed, 1248 unchanged (54% of the section changed)

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and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of NI Holdings,

and Subsidiaries (collectively, the “Company”) as of December 31, 2022, and 2021, and the related consolidated statements

of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year

period ended December 31, 2022, and the related notes and the schedule listed in Item 15(a)(2) (collectively referred to as the “consolidated

financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2022,

based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO).

We have audited the accompanying consolidated

balance sheets of NI Holdings, Inc.

and Subsidiaries (collectively, the “Company”) as of December 31, 2023, and 2022, and

the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows

for each of the years in the three-year period ended December 31, 2023, and the related notes and the schedule listed in Item 15(a)(2)

(collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control

over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the consolidated financial statements

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Framework (2013) issued by COSO.

Basis for Opinion

Basis for Opinions

The Company’s management is responsible

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We are a public accounting firm registered

with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect

to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

We conducted our audits in accordance with the

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We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal

Control over Financial Reporting

Definition and Limitations of Internal Control

over Financial Reporting

A company’s internal control over financial

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with the policies or procedures may deteriorate.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is

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below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of Losses and Loss Adjustment

Expenses Reserves

Evaluation of Losses and Loss Adjustment Expenses

Critical Audit Matter Description

On December 31, 2022, the Company’s

liability for unpaid losses and loss adjustment expenses was approximately $190 million.

As described in Note 3 and 9, the

Company’s property and casualty insurance loss and loss expenses reserves (referred to as “losses and loss expenses

reserves”), are determined by the Company using actuarial methods, models, assumptions, and judgment to estimate the reserves

required to pay for and settle all outstanding insured claims as of the financial statement date.

There is significant uncertainty

inherent in determining management’s best estimate of the losses and loss expenses reserves, requiring the use of informed

actuarially based estimates and management’s judgment.

The actuarial estimate of losses and loss expenses reserves is subject

to review and adjustment by Company management.

On December 31, 2023, the Company’s liability

for unpaid losses and loss adjustment expenses was approximately $217 million.

As described in Note 3 and 8, the Company’s property

and casualty insurance loss and loss expenses reserves (referred to as “losses and loss expenses reserves”), are determined

by the Company using actuarial methods, models, assumptions, and judgment to estimate the reserves required to pay for and settle all

outstanding insured claims as of the financial statement date.

There is significant uncertainty inherent in determining management’s

best estimate of the losses and loss expenses reserves, requiring the use of informed actuarially based estimates and management’s

The actuarial estimate of losses and loss expenses reserves is subject to review and adjustment by Company management.

Losses and loss expenses are inherently uncertain

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/s/ Mazars USA LLP

We have serves as the Company’s auditor since

We have served as the Company’s auditor since 2016.

Fort Washington, Pennsylvania

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Cash and cash equivalents

Fixed income securities, at fair value (net of allowance for expected credit losses of $0 at December 31, 2022)

Fixed income securities, at fair value (net of allowance for expected credit losses of $ 0 at December 31, 2023 and 2022)

Equity securities, at fair value

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Total cash and investments

Premiums and agents' balances receivable (net of allowance for expected credit losses of $ 425 at December 31, 2022)

Premiums and agents' balances receivable (net of allowance for expected credit losses of $ 402 at December 31, 2023 and $ 425 at December 31, 2022)

Deferred policy acquisition costs

Reinsurance premiums receivable

Reinsurance recoverables on losses (net of allowance for expected credit losses of $ 0 at December 31, 2022)

Reinsurance recoverables on losses (net of allowance for expected credit losses of $ 0 at December 31, 2023 and 2022)

Income tax recoverable

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Unearned premiums

Reinsurance premiums payable

Deferred income taxes

Payable to Federal Crop Insurance Corporation

Westminster consideration payable

Income tax payable

Accrued expenses and other liabilities

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Other underwriting and general expenses

Goodwill impairment charge

Total expenses

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Other comprehensive income (loss), net of income taxes

Share-based compensation

Purchase of treasury stock

Share-based compensation

Issuance of vested award shares

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Other comprehensive income (loss), net of income taxes

Share-based compensation

Purchase of treasury stock

Share-based compensation

Issuance of vested award shares

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Other comprehensive income (loss), net of income taxes

Share-based compensation

Purchase of treasury stock

Share-based compensation

Issuance of vested award shares

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December 31, 2023

The accompanying notes are an integral part of these consolidated financial

The accompanying notes are an integral part of these consolidated

financial statements.

NI Holdings, Inc.

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Amortization of intangibles

Goodwill impairment charge

Distribution of employee stock ownership plan shares

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Proceeds from sales of property and equipment

Acquisition of Westminster American Insurance Company (cash consideration paid net of cash and cash equivalents acquired)

Proceeds from sale of other investments and other

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Installment payment on Westminster consideration payable

Principal repayments of finance leases

Issuance of vested award shares

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Cash and cash equivalents at end of period

Non-cash item:

Present value of installment payable issued in connection with acquisition of Westminster American Insurance Company

Federal and state income taxes paid

Federal and state income taxes paid (net of refunds received)

The accompanying notes are an integral part of these consolidated financial

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As a result of the conversion, NI Holdings became the holding company for Nodak Insurance and its existing subsidiaries.

These consolidated financial statements include

the financial position and results of operations of NI Holdings and the following other entities:

These consolidated financial statements include the

financial position and results of operations of NI Holdings and the following other entities:

Nodak Insurance Company

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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.

writes private passenger auto, homeowners, and farm coverages in South Dakota.

American West also writes private passenger auto coverage

in North Dakota, as well as crop hail and Federal multi-peril crop insurance coverages in Minnesota and South Dakota.

Primero Insurance Company

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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 reflected as a non-controlling interest in shareholders’ equity

in our Consolidated Balance Sheets and its net income or loss is excluded from net income or loss attributed to NI Holdings in our Consolidated

Statements of Operations.

company writing private passenger 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 reflected as a non-controlling interest in shareholders’

equity in our Consolidated Balance Sheets for NI Holdings (“Consolidated Balance Sheets”) and its net income or loss is excluded

from net income or loss attributed to NI Holdings in our Consolidated Statements of Operations for NI Holdings (“Consolidated Statements

of Operations”).

Direct Auto Insurance Company

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Additionally, all of the Company’s

insurance subsidiary and affiliate companies are rated “A” Excellent by AM Best.

insurance subsidiary and affiliate companies are rated “A” Excellent by AM Best, a global credit rating agency specializing

in the insurance industry.

The same executive management team provides oversight

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However, beginning on December 31, 2022, we are

no longer an EGC and will no longer have the ability to delay adoption of these new or revised accounting standards, or to take advantage

of reduced corporate governance disclosures.

Premium Amortization on Callable Fixed Income Securities

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.

Fair Value Measurement of Assets and Liabilities

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.

no longer an EGC and are now unable to delay adoption of these new or revised accounting standards or take advantage of reduced corporate

governance disclosures.

Effective for the year ended December 31, 2022, the Company

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The adoption of the updated guidance resulted in the Company

recognizing a right-of-use asset of $ 1,637 as part of other assets, a lease liability of $ 1,837 as part of other liabilities, and an elimination

of the $ 200 deferred rent liability in the Consolidated Balance Sheet.

The cumulative effect adjustment to the opening balance of retained

earnings was zero .

The adoption of the updated guidance did not affect the Company’s results of operations or cash flows.

recognizing a right-of-use asset of $ 1,637 as part of other assets, a lease liability of $ 1,837 as part of accrued expenses and other

liabilities, and an elimination of the $ 200 deferred rent liability in the Consolidated Balance Sheet.

The cumulative effect adjustment

to the opening balance of retained earnings was zero .

The adoption of the updated guidance did not affect the Company’s results

of operations or cash flows.

Measurement of Credit Losses on Financial Instruments

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December 31, 2022.

The adoption of this guidance resulted in an allowance of expected credit losses of $ 425 for premiums and agents' balances

Based on the results of the receivable

analyses and management’s review of our

available-for-sale fixed income securities, it was determined that no allowance was required for reinsurance recoverables or available-for-sale

fixed income securities at this time.

Income Taxes – Simplifying the Accounting for Income

The adoption of this guidance resulted in an allowance for expected credit losses of $ 425 for premiums and agents'

balances receivable.

Based on the results of the receivable analyses and management’s review of our available-for-sale fixed income

securities, it was determined that no allowance was required for reinsurance recoverables or available-for-sale fixed income securities

at this time.

Income Taxes – Simplifying the Accounting for Income Taxes

In December 2022, the Company adopted amended guidance

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results of operations, or cash flows.

Not Yet Adopted

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued guidance related to improving disclosures

for reportable segments primarily through enhanced disclosures about significant segment expenses that

are provided to the chief operating decision maker (“CODM”).

This guidance also requires disclosure of the title and position

of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and

deciding how to allocate resources .

The amendments in this update are effective for fiscal years beginning after December 15, 2023,

and interim periods within fiscal years beginning after December 15, 2024.

We are currently evaluating the impact of the new standard

on our consolidated financial statements, which is expected to result in enhanced disclosures.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued guidance related to improving income

tax disclosures.

This guidance requires that an entity, on an annual basis, disclose additional income tax information, primarily related

to the rate reconciliation and income taxes paid.

The guidance is intended to enhance the transparency and decision usefulness of income

tax disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2024.

We are currently evaluating

the impact of the new standard on our consolidated financial statements, which is expected to result in enhanced disclosures.

Summary of Significant Accounting Policies

Basis of Consolidation

Our consolidated financial statements, which we

have prepared in accordance with GAAP, include our accounts and those of our wholly-owned subsidiaries, as well as Battle Creek, an entity

Our consolidated financial statements, which we have

prepared in accordance with GAAP, include our accounts and those of our wholly-owned subsidiaries, as well as Battle Creek, an entity

we control via a surplus note agreement.

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Actual results could differ significantly from those estimates.

We make estimates and assumptions that can have

a significant effect on amounts and disclosures we report in our consolidated financial statements.

We make estimates and assumptions that can have a

significant effect on amounts and disclosures we report in our consolidated financial statements.

The most significant estimates relate

to our reserves for unpaid losses and loss adjustment expenses, earned premiums for crop insurance, valuation of investments, determination

of credit impairments, valuation allowances for deferred income tax assets, deferred policy acquisition costs, and the valuations used

to establish intangible assets acquired related to business combinations.

While we believe our estimates are appropriate, the ultimate

amounts may differ from the estimates provided.

We regularly review our methods for making these estimates as well as the continued appropriateness

of the estimated amounts, and we reflect any adjustment we consider necessary in our current results of operations.

of credit impairments, valuation allowances for deferred income tax assets, deferred policy acquisition costs, as well as valuation and

impairments of goodwill and other intangible assets.

While we believe our estimates are appropriate, the ultimate amounts may differ from

the estimates provided.

We regularly review our methods for making these estimates as well as the continued appropriateness of the estimated

amounts, and we reflect any adjustment we consider necessary in our current results of operations.

Variable-Interest Entities

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(“VIE”) is required to be consolidated by the primary beneficiary of the VIE.

We assess our investments in other entities at

inception to determine if any meet the qualifications of a VIE.

We assess our investments in other entities at inception

to determine if any meet the qualifications of a VIE.

We consider an investment in another company to be a VIE if:

(a) the total

equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support,

(a) the total equity

investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support,

(b) the characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other

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We evaluate whether we are the primary beneficiary

of each VIE and we consolidate the VIE if we have both (1) the power to direct the economically significant activities of the entity

and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity.

We consider the contractual agreements

that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights, and board

representation of the respective parties in determining whether we qualify as the primary beneficiary.

Our assessment of whether we are

the primary beneficiary of a VIE is performed at least annually.

of each VIE and we consolidate the VIE if we have both (1) the power to direct the economically significant activities of the entity and

(2) the obligation to absorb losses of, or the right to receive benefits from, the entity.

We consider the contractual agreements that

define the ownership structure, distribution of profits and losses, risks,

responsibilities, indebtedness, voting rights, and board representation

of the respective parties in determining whether we qualify as the primary beneficiary.

Our assessment of whether we are the primary beneficiary

of a VIE is performed at least annually.

We control Battle Creek via a surplus note which

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For more information,

see Part II, Item 8, Note 12 “Related Party Transactions”.

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 reflected as a non-controlling

interest in shareholders’ equity in our Consolidated Balance Sheet and its net income or loss is excluded from net income or loss

attributed to NI Holdings in our Consolidated Statement of Operations.

see Part II, Item 8, Note 11 “Royalties, Dividends, and Affiliations”.

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 reflected

as a non-controlling interest in shareholders’ equity in our Consolidated Balance Sheet and its net income or loss is excluded from

net income or loss attributed to NI Holdings in our Consolidated Statement of Operations.

Cash and Cash Equivalents

Cash and cash equivalents include certain investments

in highly liquid debt instruments with original maturities of three months or less.

Cost approximates fair value for these short-term

Investments :

The Company’s fixed income securities and equity securities

are classified as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or

a recognized independent pricing service at the reporting date for those or similar investments.

Cash and cash equivalents include cash, money market

accounts, and certain investments in highly liquid debt instruments.

Cost approximates fair value for these short-term investments.

The Company’s fixed income securities and equity securities are

classified as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or a

recognized independent pricing service at the reporting date for those or similar investments.

Changes in unrealized investment gains

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of other comprehensive income (loss) and, accordingly, have no effect on net income (loss).

Changes in unrealized investments gains or

Changes in unrealized investment gains or

losses on equity securities are reported in net income (loss).

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The carrying value of these other

invested assets was $ 2,005 at December 31, 2022 and 2021.

invested assets was $ 2,006 at December 31, 2023 and $ 2,005 at December 31, 2022.

Beginning on December 31, 2022, credit losses are recognized through

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adjustment to earnings.

For fixed income securities that the Company does not intend to

sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the

Company separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss

component in net realized investment gains (losses).

The impairment related to all other factors (non-credit factors) is reported in other

comprehensive income.

For fixed income securities that the Company does not intend to sell

or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the Company

separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss component

in net realized investment gains (losses).

The impairment related to all other factors (non-credit factors) is reported in other comprehensive

The allowance is adjusted for any additional credit losses and subsequent recoveries.

Upon recognizing a credit

loss, the cost basis is not adjusted.

Upon recognizing a credit loss, the cost

basis is not adjusted.

For fixed income securities the Company intends to sell or for which

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The new cost basis is not adjusted for any subsequent recoveries in fair value.

The Company reports investment income accrued

separately from fixed maturity investments, available for sale, and has elected not to measure an allowance for credit losses for investment

income accrued.

Investment income accrued is written off through net realized investment gains (losses) at the time the issuer of the

bond defaults or is expected to default on payments.

The Company reports investment income accrued separately from fixed

income investments, available for sale, and has elected not to measure an allowance for credit losses for investment income accrued.

income accrued is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected

to default on payments.

For more information on investment valuation measurements, see Part

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Revenue Recognition

We record premiums written at policy inception and recognize them

as revenue on a pro rata basis over the policy term or, in the case of crop insurance, over the period of risk.

The portion of premiums

that could be earned in the future is deferred and reported as unearned premiums.

When policies lapse, the Company reverses the unearned

portion of the written premium and removes the applicable unearned premium.

We record premiums written at policy inception and recognize them as

revenue on a pro rata basis over the policy term or, in the case of crop insurance, over the period of risk.

The portion of premiums that

could be earned in the future is deferred and reported as unearned premiums.

When policies lapse, the Company reverses the unearned portion

of the written premium and removes the applicable unearned premium.

Policy-related fee income is recognized when collected.

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December 15 (last date claims can be made for the most recent planting season).

Premiums and Agents’ Balances

Premiums and Agents’ Balances Receivable

Premiums and agents’ balances receivable include both direct

and agent billed premiums as well as crop notes receivable related to the multi-peril crop and crop hail insurance.

Accounts billed directly to the policyholder are provided grace

payment and cancellation notice periods per state insurance regulations.

Accounts billed directly to the policyholder are provided grace payment

and cancellation notice periods per state insurance regulations.

Direct Auto also provides for agency billing for a portion of their

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was no beginning balance of credit losses as of January 1, 2022, and all 2022 activity was the result of adoption.

As a result of the transition

from the previous accounting treatment, we did not record a cumulative effect adjustment to retained earnings at the time of adoption.

As a result of the

transition from the previous accounting treatment, we did not record a cumulative effect adjustment to retained earnings at the time of

Given the nature of these receivables, the Company has elected to use a loss-rate method to determine the expected credit losses.

allowance is based upon the Company’s ongoing review of amounts outstanding and write-offs.

The allowance is based upon the Company’s ongoing review of amounts outstanding and write-offs.

Management may also evaluate current

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Property and Equipment

We report property and equipment at cost less

accumulated depreciation.

Depreciation is computed using the straight-line method based upon estimated useful lives of the assets.

We report property and equipment at cost less accumulated

depreciation.

Depreciation is typically computed using the straight-line method based upon estimated useful lives of the assets.

Losses and Loss Adjustment Expenses

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We reflect any adjustments to our liabilities for unpaid losses and loss adjustment expenses in our operating results in

the period in which we determine the need for a change in the estimates.

the period in which we determine the need for a

change in the estimates.

We maintain liabilities for unpaid losses and loss adjustment expenses

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We establish these liabilities for the purpose of covering the ultimate costs of

settling all losses, including investigation and litigation costs.

We base the amount of our liability for reported losses primarily upon

a case-by-case evaluation of the type of risk involved, knowledge of the circumstances surrounding each claim, and the insurance policy

provisions relating to the type of loss our policyholder incurred.

We determine the amount of our liability for unreported losses and

loss adjustment expenses on the basis of historical information by line of insurance.

Inflation is not explicitly selected in the loss

reserve analysis.

settling all losses incurred through the reporting date, including investigation and litigation costs.

We base the amount of our liability

for reported losses primarily upon a case-by-case evaluation of the type of risk involved, knowledge of the circumstances surrounding

each claim, and the insurance policy provisions relating to the type of loss our policyholder incurred.

We determine the amount of our

liability for unreported losses and loss adjustment expenses on the basis of historical information by line of insurance.

not explicitly selected in the loss reserve analysis.

However, historical inflation is embedded in the estimated loss development factors.

We closely monitor our liabilities

and update them periodically using new information on reported claims and a variety of statistical techniques.

We do not discount our

liabilities for unpaid losses and loss adjustment expenses.

We closely monitor our liabilities and update them periodically using new information on reported claims and a variety of statistical

We do not discount our liabilities for unpaid losses and loss adjustment expenses.

Reserve estimates can change over time because of unexpected changes

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adjustment expenses will likely differ from the amount recorded.

Income Taxes :

With the exception of Battle Creek, which files a stand-alone federal

income tax return, we file a consolidated federal income tax return which includes NI Holdings and its wholly-owned subsidiaries.

Insurance companies typically pay state premium taxes rather than

state income taxes.

Insurance companies typically pay state premium taxes rather than state

income taxes.

However, Direct Auto is subject to state income taxes in the state of Illinois, in addition to state premium taxes.

Additionally, NI Holdings, on a stand-alone basis, pays state income taxes to the state of North Dakota for income or losses generated

as a separate financial entity.

Additionally,

NI Holdings, on a stand-alone basis, pays state income taxes to the state of North Dakota for income or losses generated as a separate

financial entity.

State premium taxes are included as a part of amortization of deferred policy acquisition costs.

income taxes are reported along with federal income taxes as income tax expense (benefit).

The Company did not have any material uncertain tax positions as

of December 31, 2022 and 2021.

State income taxes

are reported along with federal income taxes as income tax expense (benefit).

The Company did not have any material uncertain tax positions as of

December 31, 2023 and 2022.

The Company’s policy is to recognize tax-related interest and penalties accrued related to unrecognized

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when we realize or settle such amounts.

We re-measure existing deferred income tax assets (including loss

carryforwards) and liabilities when a change in tax rate occurs, and record an offset for the net amount of the change as a component

of income tax expense from continuing operations in the period of enactment.

We also record any change to a previously recorded valuation

allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from

continuing operations.

The Company has elected to reclassify any tax effects stranded in

accumulated other comprehensive income as a result of a change in income tax rates to retained earnings.

We re-measure existing deferred income tax assets (including loss carryforwards)

and liabilities when a change in tax rate occurs and record an offset for the net amount of the change as a component of income tax expense

from continuing operations in the period of enactment.

We also record any change to a previously recorded valuation allowance as a result

of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from continuing operations.

The Company has elected to reclassify any tax effects stranded in accumulated

other comprehensive income as a result of a change in income tax rates to retained earnings.

Earnings Per Share

Earnings per share are computed by dividing net income available

to common shareholders for the period by the weighted average number of common shares outstanding for the same period.

Earnings per share are computed by dividing net income available to

common shareholders for the period by the weighted average number of common shares outstanding for the same period.

Unearned shares related

to the Company’s ESOP are not considered outstanding until they are released and allocated to plan participants.

Unearned shares

related to the Company’s ESOP are not considered outstanding until they are released and allocated to plan participants.

shares related to the Company’s Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) are

not considered outstanding until they are earned by award participants.

See Part II, Item 8, Note 13 “Benefit Plans” and Note

19 “Share-Based Compensation”.

Credit Risk :

related to the Company’s Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) are not considered

outstanding until they are earned by award participants.

See Part II, Item 8, Note 12 “Benefit Plans” and Note 18 “Share-Based

Compensation”.

Our primary investment objective is to earn competitive

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we invest in any one security.

Property and liability insurance coverages are

marketed through captive agents in North Dakota and through independent insurance agencies located throughout all other operating areas.

All business, except for the majority of Direct Auto’s business, is billed directly to the policyholders.

Property and liability insurance coverages are marketed

through captive agents in North Dakota and through independent insurance agencies located throughout all other operating areas.

All business,

except for the majority of Direct Auto’s business, is billed directly to the policyholders.

We maintain cash balances primarily at one bank,

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market accounts that are insured by the Securities Investor Protection Corporation (“SIPC”) up to $ 500 .

On occasion, balances

for these accounts are maintained in excess of the SIPC insurance limit.

Reinsurance :

During the normal

course of business, balances for these accounts are often maintained in excess of the SIPC insurance limit.

The Company limits the maximum net loss that can

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Goodwill and Other Intangibles

Goodwill represents the excess of the purchase price over the underlying

fair value of acquired entities.

When completing acquisitions, we seek to identify separately identifiable intangible assets that we have

We assess goodwill and other intangibles with an indefinite useful life for impairment annually.

We also assess goodwill and

other intangibles for impairment upon the occurrence of certain events.

In making our assessment, we consider a number of factors including

operating results, business plans, economic projections, anticipated future cash flows, and current market data.

Inherent uncertainties

exist with respect to these factors and to our judgment in applying them when we make our assessment.

Impairment of goodwill and other

intangibles could result from changes in economic and operating conditions in future periods.

We did not record any impairments of goodwill

or other intangibles during the years ended December 31, 2022, 2021, or 2020.

Goodwill arising from the acquisition of Primero in 2014 represents

the excess of the purchase price over the fair value of the net assets acquired.

The purchase price in excess of the fair value of net

assets acquired was negotiated at arms-length with an unrelated party and was based upon the strategic decision by Company management

to expand both the geographic footprint and diversification of business written by the Company.

The nature of the business acquired was

such that there were limited intangibles not reflected in the net assets acquired.

The purchase price was paid with a combination of cash

and cancellation of obligations owed to the acquired company by the sellers.

The goodwill that arose from this transaction is included

in the basis of the net assets acquired and is not deductible for income tax purposes.

Goodwill assets arise from business combinations and consist of the

excess of the fair value of consideration paid over the tangible and intangible assets acquired and liabilities assumed.

We evaluate goodwill

and other intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate that it

is more likely than not that the carrying amount of goodwill and other intangible assets may exceed their fair value.

When performing our goodwill impairment analyses, we typically first

assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying

In making our assessment, we evaluate a number of factors including operating results, key changes in the reporting unit, business

plans, macroeconomic conditions, and industry considerations.

Inherent uncertainties exist with respect to these factors and to our judgment

in applying them when we make our assessment, and impairment of goodwill and other intangibles could result from changes in economic and

operating conditions in future periods.

We may also choose to bypass the qualitative assessment in any period for any reporting unit and

proceed directly to performing the quantitative assessment.

If our qualitative assessment indicates it is more likely than not

that the fair value of a reporting unit is less than its carrying amount or we choose to bypass the qualitative assessment, we will perform

a quantitative assessment that compares the reporting unit’s carrying value with its estimated fair value.

The determination of

the fair value of our reporting units is based on a combination of a market approach that considers benchmark company market multiples,

and an income approach that utilizes discounted cash flows.

The cash flows used to determine fair value are dependent on a number of significant

management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based

upon our historical experience.

Our estimates are subject to change given the inherent uncertainty in predicting future results.

we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected amounts.

the carrying value exceed the estimated fair value, a goodwill impairment charge will be recognized in the amount by which the reporting

unit’s carrying amount exceeds its fair value, not to exceed the total goodwill assigned to the reporting unit.

For the goodwill arising from the acquisition of Primero in 2014, we

performed the annual qualitative assessment as of the beginning of the fourth quarter of 2023 and concluded there was no impairment of

the goodwill.

We also did not record any impairments of goodwill for this reporting unit during the years ended December 31, 2022 or 2021.

For the goodwill arising from the acquisition of Westminster in 2020,

we determined that it was appropriate to perform a quantitative assessment during the fourth quarter of 2023.

Based on our quantitative

assessment as described above, we concluded that the goodwill related to Westminster was fully impaired as of December 31, 2023, primarily

due to Westminster’s actual and expected future performance being well below initial projections and expectations.

We did not record

any impairments of goodwill for this reporting unit during the years ended December 31, 2022 or 2021.

Intangible assets arising from the acquisition of Direct Auto in 2018

2018 represent the estimated fair values of certain intangible assets, including a favorable lease contract, a state insurance license,

the value of the Direct Auto trade name, and the VOBA.

The state insurance license asset has an indefinite life, while the Direct Auto

trade name is being amortized over five years from the August 31, 2018 acquisition/valuation date.

The favorable lease contract and VOBA

assets have been fully amortized.

Goodwill arising from the acquisition of Westminster

in January 2020 represents the excess of the purchase price over the fair value of the net assets acquired.

The purchase price in excess

of the fair value of net assets acquired was negotiated at arms-length with an unrelated party and was based upon the strategic decision

by Company management to expand both the geographic footprint and diversification of business written by the Company.

Other intangible

assets arising from the acquisition of Westminster represent the estimated fair values of certain intangible assets, including state

insurance licenses, the value of Westminster’s distribution network, the value of the Westminster trade name, and the VOBA.

state insurance license asset has an indefinite life, while the distribution networks asset and Westminster trade name are being amortized

over twenty years and ten years, respectively, from the January 1, 2020 acquisition/valuation date.

represent the estimated fair values of certain intangible assets, including a favorable lease contract, a state insurance license, the

value of the Direct Auto trade name, and the value of business acquired (“VOBA”).

The state insurance license asset has an

indefinite life, while the Direct Auto trade name was amortized over five years from the August 31, 2018 acquisition/valuation date.

favorable lease contract and VOBA assets have been fully amortized.

We did not record any impairments of the intangible assets for this

reporting unit during the years ended December 31, 2023, 2022 or 2021.

Other intangible assets arising from the acquisition of Westminster

represent the estimated fair values of certain intangible assets, including state insurance licenses, the value of Westminster’s

distribution network, the value of the Westminster trade name, and the VOBA.

The state insurance license asset has an indefinite life,

while the distribution networks asset and Westminster trade name are being amortized over twenty years and ten years , respectively, from

the January 1, 2020 acquisition/valuation date.

The VOBA asset has been fully amortized.

Acquisition of Westminster American Insurance Company

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

Westminster is a property and casualty insurance company specializing in multi-peril commercial insurance in 11 states and the

District of Columbia.

Westminster is headquartered in Owings Mills, Maryland, and continues

to be led by its president and other key management in place at the time of the acquisition.

The financial results of Westminster have

been included in the consolidated financial statements and the Company’s commercial business segment following the acquisition close

We account for business acquisitions in accordance with the acquisition

method of accounting, which requires that most assets acquired, liabilities assumed, and contingent consideration be recognized at their

fair values as of the acquisition date, which is 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.

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 paid $ 20,000 in cash consideration to the private shareholder

of Westminster as of the closing date, and an additional $ 20,000 to be paid in three 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 two

installments were paid in January 2021 and January 2022, and the final installment was paid in December 2022 with no adjustments from

the originally anticipated amount.

The following table summarizes the consideration transferred to

acquire Westminster and the amounts of identified assets acquired and liabilities assumed at the acquisition date:

Fair Value of Consideration:

Cash consideration transferred

Present value of future cash consideration

Total cash consideration

Fair Value of Identifiable Assets Acquired and Liabilities Assumed:

Identifiable net assets:

Cash and cash equivalents

Fixed income securities

Equity securities

Other investments

Premiums and agents' balances receivable

Reinsurance recoverables on losses

Accrued investment income

Property and equipment

Federal income tax recoverable

State insurance licenses (included in goodwill and other intangibles)

Distribution network (included in goodwill and other intangibles)

Trade name (included in goodwill and other intangibles)

Value of business acquired (included in goodwill and other intangibles)

Unpaid losses and loss adjustment expenses

Unearned premiums

Deferred income taxes, net

Reinsurance premiums payable

Accrued expenses and other liabilities

Total identifiable net assets

The fair value of the assets acquired included premiums and agents’

balances receivable of $ 8,507 and reinsurance recoverables on losses of $ 763 .

These were 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 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 their 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 December 31, 2022 and 2021, were as follows:

We did not record any impairments of the other

intangible assets for this reporting unit during the years ended December 31, 2023, 2022 or 2021.

The amortized cost and estimated fair value of fixed

income securities as of December 31, 2023 and 2022, were as follows:

December 31, 2023

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Total fixed income securities

The amortized cost and estimated fair value of

fixed income securities by contractual maturity are shown below.

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

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any assets to secure any obligations.

The investment category and duration of the Company’s

gross unrealized losses on fixed income securities 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.

The investment category and duration of the Company’s gross

unrealized losses on fixed income securities 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.

December 31, 2023

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credit losses are recognized through an allowance account.

The Company considers a number of factors when determining if an allowance

for credit losses is necessary including payment and default history, credit spreads, credit ratings and rating actions, and probability

The Company determines the credit loss component of fixed maturity investments by utilizing discounted cash flow modeling

to determine the present value of the security and comparing the present value with the amortized cost of the security.

We did not recognize

any credit losses for fixed income securities at the time of adoption.

Therefore, there was no beginning balance of credit losses as

of January 1, 2022, or activity during the year ended December 31, 2022.

See Item II, Part 8, Note 3 “Summary of Significant Accounting

Policies” for additional information.

We consider a number of factors when determining if an allowance for credit

losses is necessary, including payment and default history, credit spreads, credit ratings and rating actions, and probability of default.

We determine the credit loss component of fixed income securities by utilizing discounted cash flow modeling to determine the present

value of the security and comparing the present value with the amortized cost of the security.

We did not recognize any credit losses

for fixed income securities at the time of adoption of the new credit loss accounting standard or during the year ended December 31,

Therefore, there was no beginning or ending balance of credit losses for the years ended December 31, 2022 and 2023.

Part 8, Note 3 “Summary of Significant Accounting Policies” for additional information.

Net investment income consisted of the following:

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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.

Level 2 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.

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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, 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;

and, therefore, are based primarily upon the estimates of the Company or other third-parties, 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 we could have 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 consolidated 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.

Therefore, for

substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts which we could

have 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 consolidated financial statements subsequent to those respective

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

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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.

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.

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 the Company 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.

value estimate, we would first attempt to obtain a fair value estimate from our third-party investment advisors who utilize different

independent pricing services.

If unsuccessful, 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.

where the Company 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 3 investment.

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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

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 independent pricing service.

In its review, management

did not identify any such discrepancies, and no adjustments were made to the estimates provided by the independent pricing service, for

the years ended December 31, 2022, 2021, or 2020.

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 1 inputs, which use the market-approach valuation technique.

The valuation of our fixed income securities

generally incorporates significant Level 2 inputs using the market and income approach techniques.

We may assign a lower level to inputs

typically considered to be Level 2 based on our assessment of liquidity and relative level of uncertainty surrounding inputs.

no assets or liabilities classified at Level 3 at December 31, 2022 or 2021.

The following tables set forth our assets which

are measured on a recurring basis by the level within the fair value hierarchy in which fair value measurements fall:

We also use information from our third-party investment

advisors who utilize different independent pricing services to further validate the reasonableness of the valuation of our fixed income

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 independent pricing service.

In its review, management did not identify

any such discrepancies and no adjustments were made to the estimates provided by the independent pricing service for the years ended December

31, 2023, 2022, or 2021.

The classification within the fair value hierarchy is then confirmed based on the final conclusions from the

pricing review.

The valuation of money market accounts and equity

securities are generally based on Level 1 inputs, which use the market-approach valuation technique.

The valuation of certain cash equivalents

and our fixed income securities generally incorporates significant Level 2 inputs using the market and income approach techniques.

may assign a lower level to inputs typically considered to be Level 2 based on our assessment of liquidity and relative level of uncertainty

surrounding inputs.

There were no assets or liabilities classified at Level 3 at December 31, 2023 or 2022.

The following tables set forth our assets which are

measured on a recurring basis by the level within the fair value hierarchy in which fair value measurements fall:

December 31, 2023

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Total equity securities

Cash equivalents

Money market accounts and cash equivalents

Total assets at fair value

12 unchanged sentences

Total equity securities

Cash and cash equivalents

Money market accounts and cash equivalents

Total assets at fair value

no liabilities measured at fair value on a recurring basis at December 31, 2022 or 2021.

There were no liabilities measured

at fair value on a recurring basis at December 31, 2023 or 2022.

External Reinsurance

The Company’s consolidated financial statements

reflect the effects of assumed and ceded reinsurance transactions.

Assumed reinsurance refers to the acceptance of certain insurance

risks that other insurance companies have underwritten.

Ceded reinsurance involves transferring certain insurance risks (along with the

related written and earned premiums) the Company has underwritten to other insurance companies who agree to share these risks.

purpose of these agreements is to protect the Company, at a cost, from losses in excess of the amount it is prepared to accept and to

protect the Company’s capital.

Our ceded reinsurance is placed either on an automatic basis under general reinsurance contracts

known as treaties or through facultative contracts placed on substantial individual risks.

These contracts do not relieve the Company

from its obligations to policyholders.

Assumed reinsurance refers to the acceptance of certain insurance risks

that other insurance companies have underwritten.

Ceded reinsurance involves transferring certain insurance risks (along with the related

written and earned premiums) the Company has underwritten to other insurance companies who agree to share these risks.

The primary purpose

of these agreements is to protect the Company, at a cost, from losses in excess of the amount it is prepared to accept and to protect

the Company’s capital.

Our ceded reinsurance is placed either on an automatic basis under general reinsurance contracts known as

treaties or through facultative contracts placed on substantial individual risks.

These contracts do not relieve the Company from its

obligations to policyholders.

During the year ended December 31, 2023, the Company

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aggregate covers, underlying multi-peril crop reinsurance was provided through the FCIC.

The Company experienced multiple catastrophe events

during 2022 which have resulted in estimated reinsurance recoveries of $ 5,372 as of December 31, 2022.

During the years ended December 31, 2021 and 2020,

the Company maintained property catastrophe reinsurance protection covering $ 117,000 and $ 97,000 , respectively, in excess of a $ 10,000

The remaining significant components of the Company’s reinsurance program were consistent for 2021 and 2020.

excess of loss treaties provided coverage of $ 4,300 in excess of $ 700 for property risks and $ 11,300 in excess of $ 700 for casualty risks,

During the year ended December 31, 2022, the Company

maintained property catastrophe reinsurance protection covering $ 125,000 in excess of a $ 15,000 retention.

Additionally, per risk excess

of loss treaties provided coverage of $ 4,000 in excess of $ 1,000 for property risks and $ 11,000 in excess of $ 1,000 for casualty risks,

with facultative contracts in place to provide coverage up to $ 20,000 in excess of $ 5,000 per property.

6 unchanged sentences

aggregate covers, underlying multi-peril crop reinsurance was provided through the FCIC.

During the year ended December 31, 2021, the Company

maintained property catastrophe reinsurance protection covering $ 117,000 in excess of a $ 10,000 retention.

Additionally, per risk excess

of loss treaties provided coverage of $ 4,300 in excess of $ 700 for property risks and $ 11,300 in excess of $ 700 for casualty risks, with

facultative contracts in place to provide coverage up to $ 20,000 in excess of $ 5,000 per property.

Aggregate stop loss reinsurance agreements

were placed for both crop hail and multi-peril crop coverage.

The crop hail aggregate attached at a 100 % net loss ratio providing 50 points

The multi-peril crop aggregate attached at a 105 % net loss ratio providing 45 points of cover.

In addition to the aggregate

covers, underlying multi-peril crop reinsurance was provided through the FCIC.

The Company experienced multiple catastrophe events

during 2022 which resulted in reinsurance recoveries of $ 5,362 as of December 31, 2023.

The Company experienced one catastrophe event

during 2021 in excess of the retention level, resulting in a reinsurance recovery of $ 5,985 , and did not experience any catastrophe events

during 2020 which exceeded the retention level.

during 2021 which resulted in a reinsurance recovery of $ 5,764 as of December 31, 2023.

For 2024, the Company’s catastrophe retention

limit increased to $ 133,000 in excess of a $ 20,000 retention, while there were no changes made to limit, retention, or attachment point

and retention limit will remain consistent with the prior year, and there were no changes made to limits, retentions, or attachment points

in our other reinsurance contracts.

The Company actively monitors and evaluates the

financial condition of the reinsurers and develops estimates of the uncollectible amounts due from reinsurers.

Beginning on December 31,

2022, credit losses are recognized through an allowance account developed using the CECL model.

See Part II, Item 8, Note 2 “Recent

Accounting Pronouncements” for additional information.

Credit loss estimates are made based on periodic evaluation of balances due

from reinsurers, changes in reinsurer credit standing, 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 by entering into reinsurance arrangements only with reinsurers that have strong credit ratings and statutory

surplus above certain levels.

At December 31, 2022, management has concluded that it is not necessary to record an allowance for expected

credit losses related to reinsurance recoverables.

All of our significant reinsurance partners are rated “A-” (Excellent)

or better by AM Best, and there is no history of write-offs.

A reconciliation of direct to net premiums on

both a written and an earned basis is as follows:

The Company actively monitors and evaluates the financial

condition of the reinsurers and develops estimates of the uncollectible amounts due from reinsurers.

Beginning on December 31, 2022, credit

losses are recognized through an allowance account developed using the CECL model.

See Part II, Item 8, Note 2 “Recent Accounting

Pronouncements” for additional information.

Credit loss estimates are made based on periodic evaluation of balances due from reinsurers,

changes in reinsurer credit standing, 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.

risk is mitigated by entering into reinsurance arrangements only with reinsurers that have strong financial strength ratings.

31, 2023, and December 31, 2022, management has concluded that it is not necessary to record an allowance for expected credit losses related

to reinsurance recoverables.

All of our significant reinsurance partners are rated “A-” (Excellent) or better by AM Best,

and there is no history of write-offs.

A reconciliation of direct to net premiums on both

a written and an earned basis is as follows:

Year Ended December 31,

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Net losses and loss adjustment expenses

If 100 % of our ceded reinsurance was cancelled

as of December 31, 2022, no ceded commissions would need to be returned to the reinsurers.

If 100 % of our ceded reinsurance was cancelled as

of December 31, 2023, no ceded commissions would need to be returned to the reinsurers.

Reinsurance contracts are typically effective

from January 1 through December 31 each year.

Intercompany Reinsurance Pooling Arrangement

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.

For the years ended December 31, 2023, 2022, and 2021, the

pooling share percentages by insurance company were:

Pool Percentage

Nodak Insurance Company

American West Insurance Company

Primero Insurance Company

Battle Creek Mutual Insurance Company

Direct Auto Insurance Company

Westminster American Insurance Company

Deferred Policy Acquisition Costs

Expenses directly related to successfully acquire

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.

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Unpaid Losses and Loss Adjustment Expenses

Activity in the liability for unpaid losses and

loss adjustment expenses is summarized as follows:

Activity in the liability for unpaid losses and loss

adjustment expenses is summarized as follows:

Year Ended December 31,

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Net balance, beginning of year

Acquired unpaid losses and loss adjustment expenses related to:

Total acquired

Incurred related to:

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incurred reported losses and loss adjustment expenses included $ 20,452 of net unfavorable development on prior accident years, primarily

attributable to unfavorable development for the Westminster commercial and Direct Auto non-standard auto businesses partially offset by

favorable development for Battle Creek, American West, and Nodak Insurance.

During the year ended December 31, 2022, the Company’s

incurred reported losses and loss adjustment expenses included $ 1,149 of net unfavorable development on prior accident years, primarily

attributable to unfavorable development for the Westminster commercial business partially offset by favorable development for Battle Creek

and Nodak Insurance.

During the year ended December 31, 2021, the Company’s incurred reported losses and loss adjustment expenses

included $ 4,138 of net favorable

development on prior accident years, primarily attributable to the Direct Auto non-standard auto business.

During the year ended December 31, 2020, incurred reported losses and loss adjustment expenses included $ 3,292 of net unfavorable development

on prior accident years, primarily attributable to our 2019 multi-peril crop business.

During the year ended December 31, 2021, incurred reported losses and loss adjustment expenses included $ 4,138 of

net favorable development on prior accident years, primarily attributable to the Direct Auto non-standard auto business.

Changes in unpaid losses and loss adjustment expense

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is prior to the effects of the intercompany reinsurance pooling arrangement.

The tables include unaudited information about

incurred and paid claims development (a) for the years ended December 31, 2013 through 2015 for the Private Passenger Auto, Primero Non-Standard

Auto, Home and Farm, and Crop segments, (b) through 2017 for the Direct Auto Non-Standard Auto information, and (c) through 2019 for

the Westminster Commercial information, which we present as supplementary information.

The tables include unaudited information about incurred

and paid claims development for the years ended December 31, 2014 (a) through 2015 for the Private Passenger Auto, Primero Non-Standard

Auto, Home and Farm, and Crop segments, (b) through 2017 for the Direct Auto Non-Standard Auto information, and (c) through 2019 for the

Westminster Commercial information, which we present as supplementary information.

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

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(in thousands, except claim

(1) Prior years unaudited

(1) Prior years

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

(1) Prior years unaudited

(1) Prior years

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

(in thousands, except claim

(1) Prior years unaudited

years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

(1) Prior years unaudited

years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

(in thousands, except claim

(1) Prior years unaudited

years unaudited

(Direct Auto)

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Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

(1) Prior years unaudited

years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

3 unchanged sentences

(in thousands, except claim

years unaudited

(1) Prior years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

years unaudited

(1) Prior years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

3 unchanged sentences

(in thousands, except claim

(1) Prior years unaudited

years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

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(in thousands, except claim

(1) Prior years unaudited

years unaudited

(Westminster)

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Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

(1) Prior years unaudited

years unaudited

Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

(in thousands, except claim

(1) Prior years unaudited

years unaudited

Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance

2 unchanged sentences

Liabilities for Unpaid Losses and Loss Adjustment Expenses, net of reinsurance

years unaudited

The following table presents a reconciliation

of the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in our Consolidated

(1) Prior years unaudited

The following table presents a reconciliation of

the net incurred and paid claims development tables to the liability for unpaid losses and loss adjustment expenses in our Consolidated

Balance Sheet:

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Net liability for unpaid losses and loss adjustment expenses

The following table presents required supplementary information

about average historical claims duration as of December 31, 2022:

The following table presents required supplementary information about

average historical claims duration as of December 31, 2023:

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance

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Total property and equipment, net

Depreciation expense was $ 708 , $ 694 , and $ 709

during the years ended December 31, 2022, 2021, and 2020, respectively.

Depreciation expense was $ 826 , $ 708 , and $ 694 during

the years ended December 31, 2023, 2022, and 2021, respectively.

Goodwill and Other Intangibles

The following table presents the carrying

amount of the Company’s goodwill by segment:

Non-standard auto from acquisition of Primero

Commercial from acquisition of Westminster

amount of the Company’s goodwill and related impairment by segment:

Year Ended December 31,

Goodwill, beginning of year

Impairment recognized during the period

Goodwill, end of year

Based on the qualitative analysis performed

for the goodwill related to our non-standard auto segment as of the beginning of the fourth quarter of 2023, we concluded that goodwill

was not impaired.

We performed a quantitative assessment of the goodwill related to the Westminster acquisition during the fourth quarter

of 2023, which is allocated to our commercial segment, and concluded that the goodwill was fully impaired as of December 31, 2023, resulting

in a non-cash impairment charge of $ 6,756 in the current year.

The determination of the fair value of the reporting unit was based on

a combination of a market approach that considered benchmark company market multiples, and an income approach that utilized discounted

Under the income approach, we determined fair value based on the present value of the most recent cash flow projections for

the reporting unit as of the date of the analysis and calculated a terminal value utilizing a terminal growth rate.

The significant assumptions

under this approach include, among others:

income projections, new product introductions, customer behavior, competitor pricing, operating

expenses, the discount rate, and the terminal growth rate.

The cash flows used to determine fair value are dependent on a number of significant

management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based

upon our historical experience.

Our estimates are subject to change given the inherent uncertainty in predicting future results.

Additionally,

the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market

We determined during our reviews that there

were no impairments of goodwill for any reporting units during the years ended December 31, 2022 and 2021.

Other Intangible Assets

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Not subject to amortization – state insurance licenses

We determined during our reviews that there were

no impairments of other indefinite-lived intangible assets or finite-lived intangible assets during the years ended December 31, 2023,

2022, and 2021.

Amortization expense was $ 455 , $ 472 , and $ 472

during the years ended December 31, 2023, 2022, and 2021, respectively.

The VOBA intangible asset of $ 4,750 acquired in the Westminster

transaction was fully amortized during 2020.

Other intangible assets that have finite lives, including

trade names and distribution networks, are amortized over their useful lives.

As of December 31, 2022, the estimated amortization of other

intangible assets with finite lives for the next five years in the period ended December 31, 2027, and thereafter is as follows:

Other intangible assets that have finite lives, including trade

names and distribution networks, are amortized over their useful lives.

As of December 31, 2023, the estimated amortization of other intangible

assets with finite lives for the next five years in the period ending December 31, 2028, and thereafter is as follows:

Year ending December 31,

Total other intangible assets with finite lives

Related Party Transactions

Intercompany Reinsurance Pooling Arrangement

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 years ended December 31, 2022, 2021, and 2020, the pooling share

percentages by insurance company were:

Pool Percentage

Nodak Insurance Company

American West Insurance Company

Primero Insurance Company

Battle Creek Mutual Insurance Company

Direct Auto Insurance Company

Westminster American Insurance Company

Royalties, Dividends, and Affiliations

North Dakota Farm Bureau

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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 $ 1,453 , $ 1,369 , and $ 1,370 during the years ended December 31, 2022, 2021, and 2020, respectively.

Royalty amounts payable of

$ 119 and $ 113 were accrued as a liability to the NDFB at December 31, 2022 and 2021, respectively.

During 2020, Nodak Insurance paid $ 1,129

of membership dues on behalf of its NDFB members in North Dakota in response to the COVID-19 pandemic.

and provides royalties to the NDFB based on the premiums written on Nodak Insurance’s policies.

Royalties paid to the NDFB were

$ 1,603 , $ 1,453 , and $ 1,369 during the years ended December 31, 2023, 2022, and 2021, respectively.

Royalty amounts payable of $ 131 and

$ 119 were accrued as a liability to the NDFB at December 31, 2023 and 2022, respectively.

State insurance laws require our insurance

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that restrict the payment of dividends from statutory surplus and may require prior approval from their domiciliary insurance regulatory

Our insurance subsidiaries are also subject to risk-based capital

requirements that may further affect their ability to pay

Our insurance subsidiaries statutory capital and surplus at December 31, 2022, exceeded the amount of statutory capital and

Our insurance subsidiaries are also subject to risk-based capital requirements that may further affect their ability to pay

Our insurance subsidiaries statutory capital and surplus at

December 31, 2023, exceeded the amount of statutory capital and

surplus necessary to satisfy risk-based capital requirements by a significant margin.

There is no amount available for payment of dividends from Nodak

Insurance to NI Holdings during 2023 without the prior approval of the North Dakota Insurance Department based upon the net loss of Nodak

Insurance for the year ended December 31, 2022.

Prior to its payment of any 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.

restrictions or any subsequently imposed restrictions may affect our future liquidity.

The Nodak Insurance Board of Directors declared

and paid dividends of $ 3,000 and $ 6,000 to NI Holdings during the years ended December 31, 2022 and 2020, respectively.

No dividends were

declared or paid by Nodak Insurance during the year ended December 31, 2021.

There is no amount available for payment of dividends from Nodak Insurance

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department.

Prior to its payment of any 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.

The Nodak Insurance Board of Directors declared and paid dividends of $ 3,000 to NI Holdings during the year ended December 31, 2022.

dividends were declared or paid by Nodak Insurance during the years ended December 31, 2023 and 2021.

Direct Auto re-domesticated from Illinois to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

There is no amount available for payment of dividends from

Direct Auto to NI Holdings during 2023 without the prior approval of the North Dakota Insurance Department based upon the net loss of

Direct Auto for the year ended December 31, 2022.

No dividends were declared or paid by Direct Auto during the years ended December 31,

2022, 2021, or 2020.

The amount available for payment of dividends from Direct

Auto to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department is approximately $ 90 as of December

No dividends were declared or paid by Direct Auto during the years ended December 31, 2023, 2022, or 2021.

Westminster re-domesticated from Maryland to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

There is no amount available for payment of dividends

from Westminster to NI Holdings during 2023 without the prior approval of the North Dakota Insurance Department based upon the net loss

of Westminster for the year ended December 31, 2022.

No dividends were declared or paid by Westminster during the years ended December

31, 2021 or 2020.

The amount available for payment of dividends from Westminster

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department is approximately $ 1,200 as of December

No dividends were declared or paid by Westminster during the years ended December 31, 2023, 2022 or 2021.

Battle Creek Mutual Insurance Company

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sheets and statements of operations of Battle Creek, prior to intercompany eliminations, to illustrate the impact of including Battle

Creek in our Consolidated Balance Sheets and Statements of Operations:

Creek in our Consolidated Balance Sheets and Consolidated Statements of Operations:

Cash and cash equivalents

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Fee and other income (expense)

Net investment income (loss)

Net investment income

Net investment gains (losses)

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an automatic and matching contribution for eligible employees at Nodak Insurance, Primero, and Direct Auto.

Nodak Insurance also contributes

an additional elective amount of employee compensation as a profit-sharing contribution for eligible employees.

Westminster also sponsors

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American West and Battle Creek have no employees.

The Company reported expenses related to

the 401(k) plans totaling $ 693 , $ 722 , and $ 651 during the years ended December 31, 2022, 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 $ 672 , $ 697 , and $ 900 during years ended

December 31, 2022, 2021, and 2020, respectively.

The Company reported expenses related to these plans totaling

$ 806 , $ 693 , and $ 1,365 during the years ended December 31, 2023, 2022, and 2021, respectively.

All fees associated with the plans are deducted

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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 $ 325 , $ 914 , and $ 308 during the years

ended December 31, 2022, 2021, and 2020, respectively.

In connection with our initial public offering

in March 2017, the Company established its 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

plan by amounts that represent the excess of the maximum contribution allowed by the Employee Retirement Income Security Act over the

key executives’ allowable 401(k) contribution.

The plan also allows employee-directed deferral of key executives’ compensation

or incentive payments.

The Company reported expenses related to this plan totaling $ 368 , $ 325 , and $ 914 during the years ended December

31, 2023, 2022, and 2021, respectively.

In connection with our IPO in March 2017, the

Company established its ESOP, which 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 ESOP, Nodak Insurance

loaned $ 2,400 to the ESOP’s related trust (the “ESOP Trust”).

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The ESOP Trust used the proceeds

of the loan to purchase shares in our initial public offering, which resulted in the ESOP Trust owning approximately 1.0 % of the Company’s

authorized shares.

of the loan to purchase shares in our IPO, which resulted in the ESOP Trust owning approximately 1.0 % of the Company’s authorized

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.

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

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of terminating the plan.

It is anticipated that the only assets held

by the ESOP will be shares of the Company’s common stock.

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

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Employees are not permitted to make any contributions to the

Participants in the ESOP receive annual reports from the Company showing the number of shares of common stock of the Company allocated

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.

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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.

basis of those shares was set at $ 10.00 per share as part of the IPO.

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.

of those shares was set at $ 10.00 per share as part of the IPO.

As shares are released from the ESOP suspense account, the contra-equity

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multiplied by the average market value of the Company’s stock during the period.

The Company recognized compensation expense

of $ 380 , $ 460 , and $ 373 during the years ended December 31, 2022, 2021, and 2020, respectively, related to the ESOP.

The Company recognized compensation expense related

to the ESOP of $ 322 , $ 380 , and $ 460 during the years ended December 31, 2023, 2022, and 2021, respectively.

Through December 31, 2023, the Company had released

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Line of Credit

Nodak Insurance has a $ 5,000 line of credit with

Wells Fargo Bank, N.A.

The terms of the line of credit include a floating interest rate of the bank’s Prime Rate with a floor rate

NI Holdings has a $ 3,000 line of credit with Wells

Fargo Bank, N.A.

The terms of the line of credit include a floating interest rate of 2.50 % above the daily simple secured overnight financing

There were no outstanding amounts during the years ended December 31, 2023, 2022, or 2021.

This line of credit is scheduled

to expire on May 31, 2023 .

The components of our provision for income tax

expense (benefit) were as follows:

This line of credit is scheduled to expire

on December 13, 2024 .

The components of our provision for income tax expense

(benefit) were as follows:

Year Ended December 31,

Current tax provision

Current income tax expense (benefit)

Total current

Deferred tax (benefit) provision

Total provision for income taxes

The provision for income taxes differs from the

amount that would be computed by applying the statutory federal rate to income before provision for income taxes as a result of the following:

Deferred income tax expense (benefit)

Total income tax expense (benefit)

The provision for income tax expense (benefit) differs

from the amount that would be computed by applying the statutory federal rate to income (loss) before income taxes as a result of the

Year Ended December 31,

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Dividends received deduction

Section 832(b)(5)(B) proration amount

Compensation-related expenses

Goodwill impairment

Research and development credit

Change in valuation allowance

Total provision for income taxes

Total income tax expense (benefit)

We re-measure existing deferred income tax assets

(including loss carryforwards) and liabilities when a change in tax rate occurs and record an offset for the net amount of the change

as a component of income tax expense from continuing operations in the period of enactment.

We record any change to a previously recorded

valuation allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense

from continuing operations.

The valuation allowance against certain deferred income tax assets was $ 694 , $ 1,008 , and $ 931 at December

31, 2022, 2021, and 2020, respectively.

The income tax effects of temporary differences

that give rise to significant portions of our deferred income tax assets and deferred income tax liabilities at December 31, 2022 and

as a component of income tax expense (benefit) from continuing operations in the period of enactment.

We record any change to a previously

recorded valuation allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income

tax expense (benefit) from continuing operations.

The valuation allowance against certain deferred income tax assets was $ 505 , $ 694 , and

$ 1,008 at December 31, 2023, 2022, and 2021, respectively.

The income tax effects of temporary differences that

give rise to significant portions of our deferred income tax assets and deferred income tax liabilities at December 31, 2023 and 2022,

were as follows:

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Net operating loss carryovers

Deferred compensation

Total deferred income tax assets

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Deferred policy acquisition costs

Net unrealized gains on investments

Total deferred income tax liabilities

Net deferred income tax asset (liability)

Net deferred income tax asset

Valuation allowance

Deferred income tax asset (liability), net

Deferred income tax asset, net

At December 31, 2023 and 2022, we had no unrecognized

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At December 31, 2023 and 2022, the Company, other

than Battle Creek and Westminster, had no income tax related carryovers for net operating losses, alternative minimum tax credits, or

capital losses.

than Battle Creek and Westminster, had no income tax related carryforwards for net operating losses, alternative minimum tax credits,

or capital losses.

Battle Creek, which files its federal income tax

returns on a stand-alone basis, had net operating loss carryovers of $ 3,963 and $ 3,215 at December 31, 2022 and 2021, respectively.

net operating loss carryforward began expiring in 2021 and will continue through 2032.

returns on a stand-alone basis, had net operating loss carryforwards of $ 3,756 and $ 3,963 at December 31, 2023 and 2022, respectively.

The net operating loss carryforwards expire through 2032.

Westminster, which became part of the Company’s

consolidated federal income tax return beginning in 2020, had $ 1,270 and $ 2,122 of net operating loss carryover at December 31, 2022

and 2021, respectively.

This net operating loss carryforward expires in 2023.

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.

Effective for the year ended December 31, 2022,

the Company adopted the updated guidance for leases.

consolidated federal income tax return beginning in 2020, had $ 1,270 of net operating loss carryforward at December 31, 2022.

operating loss carryforward expired in 2023.

Primero leases a facility in Spearfish, South Dakota under

a non-cancellable operating lease expiring in 2028, and leases a facility in Las Vegas, Nevada on a month-to-month basis.

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.

In addition, Nodak Insurance leases server equipment under

a non-cancellable finance lease expiring in 2026.

Effective for the year ended December 31, 2022, the

Company adopted the updated guidance for leases.

See Part II, Item 8, Note 2 “Recent Accounting Pronouncements” for additional

Under the new guidance, lease expense for these operating leases is recognized on a straight-line basis over the term of

the lease, and a right-of-use asset and lease liability is recognized as part of other assets and other liabilities, respectively, in

the Consolidated Balance Sheet at the origination of the lease.

The Company currently does not have leases that include options to purchase

or provisions that would automatically transfer ownership of the leased property to the Company.

The Company determines whether a contract is or

contains a lease at the inception of the contract.

A contract will be deemed to be or contain a lease if the contract conveys the right

to control and directs the use of identified property or equipment for a period of time in exchange for consideration.

The Company generally

must also have the right to obtain substantially all of the economic benefits from the use of the property and equipment.

Operating lease

assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates based on the floating

interest rate on our Line of Credit with Wells Fargo Bank, N.A.

at the lease commencement date, as rates are not implicitly stated in

We determine whether a contract is or contains a lease at the inception of the contract.

A contract will be deemed to be

or contain a lease if the contract conveys the right to control and directs the use of identified property or equipment for a period of

time in exchange for consideration.

We generally must also have the right to obtain substantially all of the economic benefits from the

use of the property and equipment.

Lease assets and liabilities are recognized at the lease commencement date based on the present value

of lease payments over the lease term.

To determine the present value of lease payments not yet paid, we estimate incremental borrowing

rates based on the floating interest rate on our Line of Credit with Wells Fargo Bank, N.A.

at the lease commencement date, as rates are

not implicitly stated in most leases.

Lease liabilities are included in accrued expenses and other liabilities and right-of-use assets

are included in other assets in the Consolidated Balance Sheet.

There were expenses of $ 407 , $ 391 , and $ 250 related

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leases are as follows:

Year Ended December 31, 2022

As of and For the Year Ended December 31,

Operating lease cost

Other information on operating leases

Operating cash outflow from operating leases

Right-of-use assets obtained in exchange for new lease liabilities

Weighted average discount rate

Weighted average remaining lease term in years

Finance lease cost:

Amortization of right-of-use assets

Interest on lease liabilities

Finance lease cost

Total lease cost

Other information on leases:

Cash payments included in operating cash flows from operating leases

Cash payments included in operating cash flows from finance leases

Cash payments included in financing cash flows from finance leases

Right-of-use assets obtained in exchange for new operating lease liabilities

Right-of-use assets obtained in exchange for new finance lease liabilities

Weighted average discount rate – operating leases

Weighted average discount rate – finance leases

Weighted average remaining lease term in years – operating leases

Weighted average remaining lease term in years – finance leases

The following table presents the contractual maturities of the Company’s

lease liabilities:

lease liabilities for each of the five years in the period ending December 31, 2028, and thereafter, reconciled to our lease liability

at December 31, 2023:

Year ending December 31,

Lease Liability

Operating Leases

Finance Leases

Total undiscounted lease payments

present value adjustment

Operating lease liability at December 31, 2022

Lease liability at December 31, 2023

Contingencies

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.

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.

Common and Preferred Stock

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Shares outstanding, ending

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 authorization for the repurchase of up to approximately $ 10,000 of the Company’s outstanding common stock.

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.

The net loss per diluted common share for the year ended December 31, 2023, excluded the weighted

average effects of 76,532 shares of stock awards since the impacts of these potential shares of common stock were anti-dilutive.

loss per diluted common share for the year ended December 31, 2022, excluded the weighted average effects of 155,463 shares of stock awards

since the impacts of these potential shares of common stock were anti-dilutive.

On 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.

During the year ended

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an authorization for the repurchase of up to approximately $ 5,000 of the Company’s outstanding common stock.

During the six months

ended December 31, 2021, we completed the repurchase of 81,095 shares of our common stock for $ 1,554 under this new authorization.

the year ended December 31, 2022, we completed the repurchase of 214,937 shares of our common stock for $ 3,446 to close out this authorization.

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.

During the year ended

December 31, 2021, we completed the repurchase of 81,095 shares of our common stock for $ 1,554 under this authorization.

The cost of this treasury stock is a reduction

of shareholders’ equity within our Consolidated Balance Sheets.

During the year

ended December 31, 2022, we completed the repurchase of 214,937 shares of our common stock for $ 3,446 to close out this authorization.

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.

During the year ended

December 31, 2022, we completed the repurchase of 54,223 shares of our common stock for $ 734 under this authorization.

During the year

ended December 31, 2023, we completed the repurchase of 548,549 shares of our common stock for $ 7,278 , including the applicable excise

tax discussed below.

At December 31, 2023, $ 2,052 remains available under this authorization.

The cost of this treasury stock is a reduction of

shareholders’ equity within our Consolidated Balance Sheets.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction

Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“AMT”) based on adjusted

financial statement income and imposes a 1 % excise tax on corporate stock repurchases.

The effective date of these provisions is January

The Company is not expected to be subject to the AMT based on its reported GAAP earnings for the past three years.

While we periodically

repurchase our stock, it is expected that any excise tax incurred on corporate stock repurchases will be recognized as part of the cost

basis of the treasury stock acquired and not reported as part of income tax or other expense.

Based on our evaluation, the Company does

not expect this legislation to have a significant impact on our financial position, results of operations, and cash flows.

government enacted the

Inflation Reduction Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“AMT”)

based on adjusted financial statement income and imposes a 1 % excise tax on corporate stock repurchases, subject to certain adjustments.

The effective date of these provisions was January 1, 2023.

The Company is not currently subject to the AMT based on our reported GAAP

earnings for the past three years.

For periods subsequent to the effective date of the IRA, the cost of treasury stock acquired will include

any 1 % excise tax imposed by the IRA.

The Company does not expect the IRA to have a material impact on the Company’s financial position

and results of operations.

Preferred Stock

The Company’s Articles of Incorporation

provide authority to issue up to five million shares of preferred stock.

The Company’s Articles of Incorporation provide

authority to issue up to five million shares of preferred stock.

No preferred shares are issued or outstanding.

Share-Based Compensation

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”).

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 may be issued under the Plan shall not exceed 1,000,000 shares, subject to adjustments as provided in the Plan.

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 in value.

Directors who are not also employees of the Company may not be granted awards denominated in shares

that exceed $ 150 in any calendar year.

2020 Stock and Incentive Plan

(the “Plan”) is designed 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 may be issued under the Plan shall not exceed 1,000,000 shares, 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 aggregate amount payable pursuant to all performance awards denominated in cash to any eligible person in any calendar year

is limited to $ 1,000 in value.

Directors who are not also employees of the Company may not be granted awards denominated in shares that

exceed $ 150 in any calendar year.

Restricted Stock Units

The Compensation Committee has awarded RSUs to

non-employee directors and select executives.

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 % per year over a five -year period, while RSUs granted to

non-employee directors vest 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.

The RSUs granted

to executives under the Plan were based on salary and vest 20 % per year over a five-year period, while RSUs granted to non-employee directors

vest 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

Participants do not have voting rights with respect to RSUs.

The Company recognizes stock-based compensation

costs for RSUs based on the grant date fair value.

The compensation costs are normally expensed over the vesting periods to each vesting

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.

The Company recognizes stock-based compensation costs

for RSUs 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.

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Performance Share Units

The Compensation Committee has awarded PSUs to

select executives.

The Compensation Committee has awarded PSUs to select

PSUs are promises to issue actual shares of common stock at the end of a vesting period, if certain performance conditions

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.

The PSUs granted to employees under the Plan were based on salary and include a three-year adjusted 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 for PSUs 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 estimates represent the Company’s forecasted performance against cumulative

growth targets.

The Company recognizes stock-based compensation costs

for PSUs 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 estimates represent the Company’s forecasted performance against cumulative growth targets.

A summary of the Company’s outstanding PSUs

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PSUs granted during 2021 (at target)

PSUs earned during 2021

Performance adjustment (1)

Units outstanding at December 31, 2021

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The cost estimates for PSU grants represent initial

target awards until the Company can reasonably forecast the financial performance of each PSU award grant.

As of December 31, 2022, the

previously recognized compensation expense related to the PSU awards granted during 2020 and 2021 was eliminated due to the Company’s

expectation that the threshold performance goal will not be met, and the compensation expense related to the PSU awards granted during

2022 was decreased to the threshold level due to Company’s expectations that the target goal will likely not be achieved.

number of shares to be issued at the end of each performance period will range from 0 % to 150 % of the initial target awards.

target awards until we can reasonably forecast the financial performance of each PSU award grant.

As of December 31, 2023, the previously

recognized compensation expense related to the PSU awards granted during 2022 was eliminated due to the Company's expectation that the

threshold performance goal will not be met.

The compensation expense related to the PSU awards granted during 2021 was previously eliminated.

The actual number of shares to be issued at the end of each performance period will range from 0 % to 150 % of the initial target awards.

At December 31, 2023, there was $ 828 of unrecognized

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That cost is expected to be recognized over a weighted-average period of 2.16 years.

Allowance for Expected Credit Losses

Premiums Receivable

Beginning on December 31, 2022, credit losses are

recognized through an allowance account developed using the new CECL model.

The adoption of this guidance resulted in an allowance for

expected credit losses of $ 425 for premiums and agents' balances receivable as of December 31, 2022.

See Part II, Item 8, Note 2 “Recent

Accounting Pronouncements” for additional information.

The following table presents the balances of premiums and agents’ receivable

balances, net of the allowance for expected credit losses as of December 31, 2023, and the changes in the allowance for expected credit

losses for the year ended December 31, 2023.

December 31, 2023

Agents’ Balances

Receivable, Net of

Allowance for

Expected Credit

Allowance for

Expected Credit

Balance, beginning of period

Current period charge for expected credit losses

Write-offs of uncollectible premiums receivable

Balance, end of period

Segment Information

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for the years ended December 31, 2023, 2022, and 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 Consolidated Statement of Operations or Consolidated Balance Sheet to our operating segments.

Those line items include investment

income, net investment gains (losses), other income excluding non-standard auto insurance fees, and income tax expense (benefit) within

the Consolidated Statement of Operations.

For the Consolidated Balance Sheet, those items include cash and investments, property and

equipment, other assets, accrued expenses, income taxes recoverable or payable, and shareholders’ equity.

For purposes of evaluating profitability of the non-standard

auto segment, we combine 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

Consolidated Statement of Operations or Consolidated Balance Sheet to our operating segments.

Those line items include investment income,

net investment gains (losses), fee and other income excluding non-standard auto, and income tax expense (benefit) within the Consolidated

Statement of Operations.

For the Consolidated Balance Sheet, those items include cash and investments, property and equipment, other

assets, accrued expenses and other liabilities, income taxes recoverable or payable, and shareholders’ equit y.

Year Ended December 31, 2023

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Fee and other income

Goodwill impairment charge

Net investment income

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Reinsurance recoverables on losses

Goodwill and other intangibles

Receivable from Federal Crop Insurance Corporation

Goodwill and other intangibles

Unpaid losses and loss adjustment expenses

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Reinsurance recoverables on losses

Receivable from Federal Crop Insurance Corporation

Goodwill and other intangibles

1 unchanged sentence

Unearned premiums

Payable to Federal Crop Insurance Corporation

Year Ended December 31, 2021

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Deferred policy acquisition costs

Reinsurance recoverables

Receivable from Federal Crop Insurance Corporation

Reinsurance recoverables on losses

Goodwill and other intangibles

1 unchanged sentence

Unearned premiums

Payable to Federal Crop Insurance Corporation

Statutory Net Income (Loss), Capital and Surplus, and Dividend Restrictions

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necessary to satisfy risk-based capital requirements by a significant margin.

Amounts available for distribution in 2023 to

Nodak Insurance as dividends from its insurance subsidiaries without prior approval of insurance regulatory authorities are $ 0 from American

Amounts available for distribution in 2024 to Nodak

Insurance as dividends from its insurance subsidiaries without prior approval of insurance regulatory authorities are $ 134 from American

West and Primero.

No dividends were paid to Nodak Insurance from either entity during the years ended December 31, 2023, 2022, or 2021.

There is no amount available for payment of dividends from Nodak

Insurance to NI Holdings during 2023 without the prior approval of the North Dakota Insurance Department based upon the net loss of Nodak

Insurance for the year ended December 31, 2022.

Prior to its payment of any 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.

restrictions or any subsequently imposed restrictions may affect our future liquidity.

The Nodak Insurance Board of Directors declared

and paid dividends of $ 3,000 and $ 6,000 to NI Holdings during the years ended December 31, 2022 and 2020, respectively.

No dividends were

declared or paid by Nodak Insurance during the year ended December 31, 2021.

There is no amount available for payment of dividends from Nodak Insurance

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department.

Prior to its payment of any 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 years ended December 31, 2023 and 2021.

The Nodak Insurance Board of

Directors declared and paid dividends of $ 3,000 to NI Holdings during the year ended December 31, 2022.

Direct Auto re-domesticated from Illinois to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

There is no amount available for payment of dividends from

Direct Auto to NI Holdings during 2023 without the prior approval of the North Dakota Insurance Department based upon the net loss of

Direct Auto for the year ended December 31, 2022.

No dividends were declared or paid by Direct Auto during the years ended December 31,

2022, 2021, or 2020.

The amount available for payment of dividends from Direct Auto

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department is approximately $ 90 as of December 31,

No dividends were declared or paid by Direct Auto during the years ended December 31, 2023, 2022, or 2021.

Westminster re-domesticated from Maryland to North Dakota during 2021

and is now subject to the same dividend restrictions as Nodak Insurance.

There is no amount available for payment of dividends

from Westminster to NI Holdings during 2023 without the prior approval of the North Dakota Insurance Department based upon the net loss

of Westminster for the year ended December 31, 2022.

No dividends were declared or paid by Westminster during the years ended December

31, 2022, 2021 or 2020.

The amount available for payment of dividends from Westminster

to NI Holdings during 2024 without the prior approval of the North Dakota Insurance Department is approximately $ 1,200 as of December

No dividends were declared or paid by Westminster during the years ended December 31, 2023, 2022 or 2021.

Subsequent Event

As of January 2, 2024, the North Dakota Secretary of State

approved the conversion of Battle Creek Mutual Insurance Company from a mutual insurance company to a stock insurance company.

In accordance

with the approved plan of conversion, the name of Battle Creek Mutual Insurance Company has become Battle Creek Insurance Company.

As of the conversion date, the outstanding principal of

the surplus note due from Battle Creek Mutual Insurance Company to Nodak Insurance Company was $ 3,000,000 .

There was no accrued interest

as of the conversion date.

Battle Creek Insurance Company has issued 300,000 shares of its common stock to Nodak Insurance Company at

a $ 10.00 per share par value and has become a 100 % wholly-owned subsidiary of Nodak Insurance Company.

The surplus note is considered

paid in full as of the conversion date.

We are currently in the process of finalizing the accounting

for this transaction, which will be reflected in the consolidated financial statements for the three months ended March 31, 2024, to be

included in the first quarter 2024 Form 10-Q.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data