Schedule II. Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2017

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,
	2017		2016
Assets
Fixed maturities available-for-sale, at estimated fair value	$	1,446	$	1,466
Investment real estate, at book value	356		356
Cash	1,753		1,690
Investment in subsidiaries (equity method) eliminated upon consolidation	61,001		61,108
Deferred income tax asset	1,745		1,826
Other assets	494		2,058
Total Assets	$	66,795	$	68,504
Liabilities and Shareholders' Equity
Liabilities
Accrued general expenses	$	2,923	$	2,296
Interest rate swaps	608		1,030
Short-term notes payable	1,300		1,800
Long-term debt	14,339		15,326
Total Liabilities	19,170		20,452
Total Shareholders' Equity	47,625		48,052
Total Liabilities and Shareholders' Equity	$	66,795	$	68,504

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF INCOME
(dollars in thousands)
	Years Ended December 31,
	2017			2016
Income
Dividends (eliminated upon consolidation)	$	900		$	1,750
Holding company management service fees	1,019			1,011
Other income	65			64
	1,984			2,825
Expenses
State taxes	43			43
Interest	1,234			1,274
Other expenses	792			626
	2,069			1,943
Income (loss) before income taxes and equity in undistributed earnings of subsidiaries	(85		)	882
Income tax expense (benefit)	74			(274		)
Income (loss) before equity in undistributed earnings of subsidiaries	(159		)	1,156
Equity in undistributed earnings of subsidiaries	(1,044		)	1,907
Net income (loss)	$	(1,203	)	$	3,063

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(dollars in thousands)
	Years Ended
	December 31,
	2017			2016
Cash Flows from Operating Activities:
Net income	$	(1,203	)	$	3,063
Adjustments to reconcile net income to net cash provided by (used in)operating activities:
Equity in undistributed earnings of subsidiaries	1,044			(1,907		)
Deferred income tax expense	210			1,481
Other, net	2,016			(643		)
Net cash provided by operating activities	2,067			1,994
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	(1,500		)	(843		)
Cash dividends	(504		)	(452		)
Net cash used in financing activities	(2,004		)	(1,295		)
Net change in cash and cash equivalents	63			699
Cash and cash equivalents, at beginning of year	1,690			991
Cash and cash equivalents, at end of year	$	1,753		$	1,690

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 44.

Note 2 - Cash Dividends and Asset Transfers from Insurance Subsidiaries

In 2017, cash dividends of $900,000 were paid to the Registrant by its subsidiaries ($1,750,000 in 2015).