NI Holdings, Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. NI Holdings, Inc. is a North Dakota-based holding company for Nodak Insurance Company and its subsidiaries, including Direct Auto, American West, Battle Creek, and Primero. The company operates five reportable segments: Private Passenger Auto, Non-Standard Auto, Home and Farm, Crop, and All Other. The company is an accelerated filer and is not a shell company.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | YTD 2026 (6 Months) | Q2 2025 (3 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Net Premiums Earned | $65,017 | $120,130 | $73,005 | $140,502 |
| Total Revenues | $70,234 | $129,836 | $76,057 | $147,491 |
| Net Income (Loss) | $146 | $12,654 | $(12,051) | $(5,591) |
| Earnings Per Share (Diluted) | $0.01 | $0.61 | $(0.57) | $(0.27) |
| Underwriting Gain (Loss) | $(4,987) | $6,234 | $(18,376) | $(14,564) |
| Combined Ratio | 107.7% | 94.8% | 125.1% | 110.3% |
| Net Investment Income | $2,810 | $5,465 | $3,146 | $5,984 |
| Net Investment Gains | $2,063 | $3,767 | $(410) | $459 |
| Cash and Cash Equivalents | $51,609 | $51,609 | $56,784 | $56,784 |
| Total Assets | $543,134 | $543,134 | $506,002 | $506,002 |
| Shareholders' Equity | $249,376 | $249,376 | $240,337 | $240,337 |
Note: All dollar amounts in thousands, except per share data.
Material Changes vs. Prior Period
- Profitability Turnaround: The company reported a net income of $146k for Q2 2026, a significant improvement from a net loss of $12.1M in Q2 2025. Year-to-date net income was $12.7M compared to a loss of $5.6M in the prior year.
- Premium Decline: Net premiums earned decreased 10.9% in Q2 and 14.5% YTD compared to 2025. This was primarily driven by a strategic decision to stop writing non-standard auto business in Illinois, Arizona, and South Dakota, resulting in a 93.5% drop in premiums for that segment in Q2.
- Loss Ratio Improvement: The combined ratio improved significantly to 107.7% in Q2 (from 125.1% in 2025) and 94.8% YTD (from 110.3% in 2025). This improvement was driven by favorable prior year reserve development ($6.1M in Q2) and lower catastrophe losses compared to the significant event in Q2 2025.
- Investment Performance: Net investment gains were $2.1M in Q2 2026, compared to a loss of $0.4M in Q2 2025. This was driven by realized gains from the sale of fixed income securities to fund operational liquidity and unrealized gains on equity securities.
- Cash Flow: Operating cash flows were negative ($0.96M) for the six months ended June 30, 2026, compared to positive $16.3M in the prior year, largely due to lower premium collections.
Guidance, Outlook, and Risks
- Strategic Run-off: Management anticipates further reductions in net premiums earned in the near term as the company continues to run off non-standard auto operations in specific states.
- Segment Performance: The Home and Farm segment saw a 22.6% increase in premiums but still reported an underwriting loss due to weather-related losses, though improved from the prior year. The Private Passenger Auto segment remained profitable with a combined ratio of 91.7%.
- Capital Allocation: The company repurchased 169,757 shares of common stock for $2.3M during the first six months of 2026. Approximately $2.26M remains available under the current repurchase authorization.
- Liquidity: The company maintains a $3.0M line of credit with Wells Fargo, which had no outstanding balance as of June 30, 2026. Dividend availability from subsidiaries is restricted by state insurance laws but remains sufficient for current needs.
- Risks: Key risks include the uncertainty of litigation, the impact of macroeconomic conditions on the investment portfolio, and the potential for adverse loss development in the run-off non-standard auto book.
Investor Verification Checklist
- Non-Standard Auto Run-off: Verify the timeline and financial impact of the complete cessation of non-standard auto business in targeted states.
- Reserve Development: Assess the sustainability of the $10.1M favorable prior year reserve development reported YTD 2026.
- Home and Farm Exposure: Review the specific exposure to weather-related catastrophes in North Dakota and the adequacy of reinsurance coverage.
- Investment Portfolio: Confirm the duration and credit quality of the fixed income portfolio, noting the $17M in gross unrealized losses.
- Dividend Restrictions: Monitor regulatory constraints on dividend payments from Nodak Insurance to the holding company.