Schedule II. Condensed Financial Information of Registrant (Notes)

12 Months Ended

Dec. 31, 2016

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,
	2016		2015
Assets
Fixed maturities available-for-sale, at estimated fair value	$	1,466	$	1,482
Investment real estate, at book value	356		356
Cash	1,690		991
Investment in subsidiaries (equity method) eliminated upon consolidation	61,108		58,986
Deferred income tax asset	1,826		3,435
Other assets	2,058		957
Total Assets	$	68,504	$	66,207
Liabilities and Shareholders' Equity
Liabilities
Accrued general expenses	$	2,296	$	1,948
Interest rate swaps	1,030		1,419
Short-term notes payable	1,800		857
Long-term debt	15,326		17,100
Total Liabilities	20,452		21,324
Total Shareholders' Equity	48,052		44,883
Total Liabilities and Shareholders' Equity	$	68,504	$	66,207

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF INCOME
(dollars in thousands)
	Years Ended December 31,
	2016			2015
Income
Dividends (eliminated upon consolidation)	$	1,750		$	2,000
Holding company management service fees	1,011			1,001
Other income	64			75
	2,825			3,076
Expenses
State taxes	43			43
Interest	1,274			1,331
Other expenses	626			312
	1,943			1,686
Income before income taxes and equity in undistributed earnings of subsidiaries	882			1,390
Income tax expense (benefit)	(274		)	422
Income before equity in undistributed earnings of subsidiaries	1,156			968
Equity in undistributed earnings of subsidiaries	1,907			3,729
Net income	$	3,063		$	4,697

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(dollars in thousands)
	Years Ended
	December 31,
	2016			2015
Cash Flows from Operating Activities:
Net income	$	3,063		$	4,697
Adjustments to reconcile net income to net cash provided by (used in)operating activities:
Equity in undistributed earnings of subsidiaries	(1,907		)	(3,729		)
Deferred income tax expense	1,481			1,701
Other, net	(643		)	(190		)
Net cash provided by operating activities	1,994			2,479
Cash Flows from Investing Activities:
Net sales (purchases) of investments	—			—
Net cash provided by investing activities	—			—
Cash Flows from Financing Activities:
Net (repayments) proceeds from debt	(843		)	(1,357		)
Cash dividends	(452		)	(402		)
Net cash used in financing activities	(1,295		)	(1,759		)
Net change in cash and cash equivalents	699			720
Cash and cash equivalents, at beginning of year	991			271
Cash and cash equivalents, at end of year	$	1,690		$	991

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 41.

Note 2 - Cash Dividends and Asset Transfers from Insurance Subsidiaries

In 2016, cash dividends of $1,750,000 were paid to the Registrant by its subsidiaries ($2,000,000 in 2015).