NI Holdings, Inc. Goodwill & Intangibles Disclosure
| 10. | Goodwill and Other Intangibles |
Goodwill
The following table presents the carrying amount of the Company’s and related impairment by segment:
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Non- Standard Auto | Com- mercial | Total | Non- Standard Auto | Com- mercial | Total | Non- Standard Auto | Com- mercial | Total | ||||||||||||||||||||||||||||
| Goodwill, beginning of year | $ | $ | $ | $ | 2,628 | $ | $ | 2,628 | $ | 2,628 | $ | 6,756 | $ | 9,384 | ||||||||||||||||||||||
| Impairment recognized during the period | (2,628 | ) | (2,628 | ) | (6,756 | ) | (6,756 | ) | ||||||||||||||||||||||||||||
| Goodwill, end of year | $ | $ | $ | $ | $ | $ | $ | 2,628 | $ | $ | 2,628 | |||||||||||||||||||||||||
We performed a quantitative assessment of the goodwill related to the Primero acquisition during the fourth quarter of 2024, which is allocated to our Non-Standard Auto segment, and concluded that the goodwill was fully impaired as of December 31, 2024, resulting in a non-cash impairment charge of $2,628 in the prior year. The determination of the fair value of the reporting unit was based on an income approach that utilized discounted cash flows. 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, 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 participant.
We performed a quantitative assessment of the goodwill related to the Westminster acquisition during the fourth quarter of 2023, which was allocated to our former 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 2023. 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 cash flows. 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 included, 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 were dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which were partly based upon our historical experience. Additionally, the discount rate and the terminal growth rate were based on our judgment of the rates that would be utilized by a hypothetical market participant.
Other Intangible Assets
The gross and net carrying value of the Company’s other intangible assets were $0 at December 31, 2025, and $100 at December 31, 2024, and consisted of the state insurance license for Direct Auto, which has an indefinite life.
Due to the strategic actions taken regarding Direct Auto, we determined during our reviews that these state insurance licenses were fully impaired as of December 31, 2025, and resulted in a non-cash impairment charge of $100 in 2025.
Amortization expense was $0, $211, and $455 during the years ended December 31, 2025, 2024, and 2023, respectively. Amortization expense for continuing operations was $0, $0, and $33 during the years ended December 31, 2025, 2024, and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 8, 2023 | |
| 2021 | Mar 9, 2022 | |
| 2020 | Mar 10, 2021 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.