Schedule II. Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2018

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,
	2018		2017
Assets
Fixed maturities available-for-sale, at estimated fair value	$	932	$	1,446
Investment real estate, at book value	356		356
Cash	523		1,753
Investment in subsidiaries (equity method) eliminated upon consolidation	59,229		61,001
Income tax recoverable	1,012		—
Deferred income tax asset	601		1,745
Other assets	490		494
Total Assets	$	63,143	$	66,795
Liabilities and Shareholders' Equity
Liabilities
Accrued general expenses	$	2,691	$	2,923
Interest rate swaps	234		608
Short-term notes payable	2,200		1,300
Long-term debt	12,152		14,339
Total Liabilities	17,277		19,170
Total Shareholders' Equity	45,866		47,625
Total Liabilities and Shareholders' Equity	$	63,143	$	66,795

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF INCOME
(dollars in thousands)
	Years Ended December 31,
	2018		2017
Income
Dividends (eliminated upon consolidation)	$	750	$	900
Holding company management service fees	1,006		1,019
Other income	55		65
	1,811		1,984
Expenses
State taxes	43		43
Interest	1,187		1,234
Other expenses	266		792
	1,496		2,069
Income (loss) before income taxes and equity in undistributed earnings of subsidiaries	315		(85		)
Income tax expense (benefit)	151		74
Income (loss) before equity in undistributed earnings of subsidiaries	164		(159		)
Equity in undistributed earnings of subsidiaries	615		(1,044		)
Net income (loss)	$	779	$	(1,203	)

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(dollars in thousands)
	Years Ended
	December 31,
	2018			2017
Cash Flows from Operating Activities:
Net income	$	779		$	(1,203	)
Adjustments to reconcile net income to net cash provided by (used in)operating activities:
Equity in undistributed earnings of subsidiaries	(615		)	1,044
Income taxes	58			210
Other, net	(137		)	2,016
Net cash provided by operating activities	85			2,067
Cash Flows from Investing Activities:
Net sales (purchases) of investments	490			—
Net cash provided by investing activities	490			—
Cash Flows from Financing Activities:
Net (repayments) proceeds from debt	(1,300		)	(1,500		)
Cash dividends	(505		)	(504		)
Net cash used in financing activities	(1,805		)	(2,004		)
Net change in cash and cash equivalents	(1,230		)	63
Cash and cash equivalents, at beginning of year	1,753			1,690
Cash and cash equivalents, at end of year	$	523		$	1,753

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 45.

Note 2 - Cash Dividends and Asset Transfers from Insurance Subsidiaries

In 2018, cash dividends of $750,000 were paid to the Registrant by its subsidiaries ($900,000 in 2017).