Schedule II. Condensed Financial Information of Registrant (Notes)

12 Months Ended

Dec. 31, 2014

Condensed Financial Information of Registrant [Abstract]

Scheule II. Condensed Financial Information of Registrant

Schedule II. Condensed Financial Information of Registrant

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
BALANCE SHEETS
(dollars in thousands)
	December 31,
	2014		2013
Assets
Fixed maturities available-for-sale, at estimated fair value	$	1,494	$	1,422
Investment real estate, at book value	356		356
Cash	271		948
Investment in subsidiaries (equity method) eliminated upon consolidation	57,541		49,565
Deferred income tax asset	5,071		5,866
Other assets	676		689
Total Assets	$	65,409	$	58,846
Liabilities and Shareholders' Equity
Liabilities
Accrued general expenses	$	1,842	$	1,722
Interest rate swaps	1,238		897
Notes payable	19,572		22,755
Total Liabilities	22,652		25,374
Total Shareholders' Equity	42,757		33,472
Total Liabilities and Shareholders' Equity	$	65,409	$	58,846

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF INCOME
(dollars in thousands)
	Years Ended December 31,
	2014		2013
Income
Dividends (eliminated upon consolidation)	$	2,500	$	1,250
Property transfer from subsidiary	—		—
Net realized investment gains (losses)	1		3,308
Holding company management service fees	958		929
Other income	76		76
	3,535		5,563
Expenses
State taxes	43		41
Interest	1,455		1,609
Other expenses	439		684
	1,937		2,334
Income before income taxes and equity in undistributed earnings of subsidiaries	1,598		3,229
Income tax expense	33		672
Income before equity in undistributed earnings of subsidiaries	1,565		2,557
Equity in undistributed earnings of subsidiaries	6,051		3,101
Net income	$	7,616	$	5,658

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(dollars in thousands)
	Years Ended
	December 31,
	2014			2013
Cash Flows from Operating Activities:
Net income	$	7,616		$	5,658
Adjustments to reconcile net income to net cash provided by (used in)operating activities:
Equity in undistributed earnings of subsidiaries	(6,051		)	(3,101		)
Net realized investment gains	(1		)	(3,308		)
Deferred income tax expense (benefit)	975			672
Other, net	267			246
Net cash provided by operating activities	2,806			167
Cash Flows from Investing Activities:
Net sales (purchases) of investments	—			4,847
Net cash provided by investing activities	—			4,847
Cash Flows from Financing Activities:
Net (repayments) proceeds from debt	(3,183		)	(3,876		)
Cash dividends	(300		)	(248		)
Net cash (used in) provided by financing activities	(3,483		)	(4,124		)
Net increase (decrease) in cash and cash equivalents	(677		)	890
Cash, at beginning of year	948			58
Cash, at end of year	$	271		$	948

Notes to Condensed Financial Information of Registrant

Note 1 - Basis of Presentation

Pursuant to the rules and regulations of the Securities and Exchange Commission, the Condensed Financial Information of the Registrant does not include all of the information and notes normally included with financial statements prepared in accordance with generally accepted accounting principles.  It is, therefore, suggested that this Condensed Financial Information be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Registrant’s Annual Report as referenced in Form 10-K, Part II, Item 8, page 42.

Note 2 - Cash Dividends and Asset Transfers from Insurance Subsidiaries

In 2014, cash dividends of $2.5 million were paid to the Registrant by its subsidiaries ($1.3 million in 2013).