Schedule II. Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2019

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
($ in thousands)	December 31,
	2019		2018
Assets
Fixed maturities available-for-sale, at estimated fair value	$	294	$	932
Investment real estate, at book value	356		356
Cash	3,393		523
Investment in subsidiaries (equity method) eliminated upon consolidation	65,329		59,229
Income tax recoverable	491		1,012
Deferred income tax asset	714		601
Other assets	525		490
Total Assets	$	71,102	$	63,143
Liabilities and Shareholders' Equity
Liabilities
Accrued general expenses	$	3,412	$	2,691
Interest rate swaps	65		234
Short-term notes payable	500		2,200
Long-term debt	13,664		12,152
Total Liabilities	17,641		17,277
Total Shareholders' Equity	53,461		45,866
Total Liabilities and Shareholders' Equity	$	71,102	$	63,143

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF INCOME
($ in thousands)	Years Ended December 31,
	2019			2018
Income
Dividends (eliminated upon consolidation)	$	2,750		$	750
Net realized investment gains	16			—
Holding company management service fees	1,019			1,006
Other income	56			55
	3,841			1,811
Expenses
State taxes	51			43
Interest	1,122			1,187
Other expenses	1,077			266
	2,250			1,496
Income before income taxes and equity in undistributed earnings of subsidiaries	1,591			315
Income tax expense (benefit)	(243		)	151
Income before equity in undistributed earnings of subsidiaries	1,834			164
Equity in undistributed earnings of subsidiaries	2,233			615
Net income	$	4,067		$	779

THE NATIONAL SECURITY GROUP, INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
($ in thousands)
	Years Ended
	December 31,
	2019			2018
Cash Flows from Operating Activities:
Net income	$	4,067		$	779
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in undistributed earnings of subsidiaries	(2,233		)	(615		)
Net realized investment gains	(16		)	—
Income taxes	370			58
Other, net	750			(137		)
Net cash provided by operating activities	2,938			85
Cash Flows from Investing Activities:
Net sales of investments	663			490
Net cash provided by investing activities	663			490
Cash Flows from Financing Activities:
Net repayments of debt	(200		)	(1,300		)
Cash dividends	(531		)	(505		)
Net cash used in financing activities	(731		)	(1,805		)
Net change in cash and cash equivalents	2,870			(1,230		)
Cash and cash equivalents, at beginning of year	523			1,753
Cash and cash equivalents, at end of year	$	3,393		$	523

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 2019, cash dividends of $2,750,000 were paid to the Registrant by its subsidiaries ($750,000 in 2018).