Company: NODK
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001174947-25-000721
Chunk: 112

Company: NI Holdings, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 112
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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 $2,093 and $2,506 at March 31, 2025 and
December 31, 2024, respectively.

At March 31, 2025, and December 31, 2024, we had no unrecognized
tax benefits, no accrued interest and penalties, and no significant uncertain tax positions. No interest and penalties were recognized
during the three-month period ended March 31, 2025, or the year ended December 31, 2024.

23 

Our effective tax rate for the three months ended March
31, 2025, was 16.6%, which was impacted by the $413 change in the recorded valuation allowance noted above. The effective tax rate for
continuing operations was 21.5% for the three months ended March 31, 2024. Federal income taxes were allocated to discontinued operations
at a 21.0% effective tax rate for the three months ended March 31, 2024.

  14.
  Leases

Primero leases a facility in Spearfish, South Dakota under
a non-cancellable operating lease expiring in 2028. 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 2029.
In addition, Nodak Insurance leases server equipment under a non-cancellable finance lease expiring in 2026.

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