The National Security Group, Inc.
661 East Davis Street
Post Office Box 703
Elba, Alabama 36323

PRESS RELEASE

FOR IMMEDIATE RELEASE

For Additional Information: Contact Brian R. McLeod - Chief Financial Officer @ (334) 897-2273 Ext. 241.

Elba, Alabama (February 25, 2005)—The National Security Group, Inc. (Nasdaq: NSEC) today announced its financial results for the year ended December 31, 2004. Total revenues for the year increased 13.1% to $63,246,000 compared to $55,917,000 for 2003. Leading the increase in total revenue was a fourth consecutive year of sequential double-digit growth in insurance premiums earned which increased 11.5% in 2004 to a Company record $52,985,000 compared to $47,536,000 for the year 2003. Net income for the year declined 23.9% to $3,113,000, or $1.26 per share, compared with net income of $4,090,000, or $1.66 per share for 2003. Third quarter losses from Hurricane Ivan were the primary reason for the decline in net income. Losses and related expenses from Hurricane Ivan reduced 2004 net income by approximately $3,611,000 or $1.47 per share.

	Three Months Ended December 31				Year Ended December 31
	2004		2003		2004		2003
Premium Earned	$	13,113,000	$	13,187,000	$	52,985,000	$	47,536,000
Investment Income		1,018,000		826,000		4,328,000		4,137,000
Realized Investment Gains		507,000		701,000		2,162,000		1,416,000
Revenues from Leasing Operations		567,000		403,000		2,459,000		1,433,000
Other Income		315,000		353,000		1,312,000		1,395,000
Total Revenues		15,520,000		15,470,000		63,246,000		55,917,000
Net Income	$	1,238,000	$	1,082,000	$	3,113,000	$	4,090,000
Net Income Per Share	$	0.50	$	0.43	$	1.26	$	1.66

The National Security Group, Inc., through three wholly owned subsidiaries, offers a range of personal lines life, accident and health, property and liability insurance in twelve states. The Company is listed on the NASDAQ National Market under the symbol: NSEC.

Contact: Brian McLeod, Treasurer
The National Security Group, Inc.
P.O. Box 703
Elba, Alabama 36323