The National Security Group, Inc. Releases Third Quarter Earnings

  
    
  
  
    
      The National Security Group, Inc. (the Company) (Nasdaq: NSEC), today 
      reported results for the quarter and nine months ended September 30, 
      2008 and 2007, based on accounting principles generally accepted in the 
      United States of America, as follows:
    
    
      
        
        
        
           
        
        
        
        
          Three Months Ended September 30
        
        
           
        
        
        
        
          Nine Months Ended September 30
        
      
      
        
        
        
        
        
        
        
        
        
           
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
        
        
        
      
      
        
        
        
        
        
        
        
          2008
        
        
           
        
        
        
        
        
        
          2007
        
        
           
        
        
        
        
        
        
          2008
        
        
           
        
        
        
        
        
        
          2007
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Premium Income
        
        
        
        
          $
        
        
          11,707,000
        
        
        
        
        
        
          $
        
        
          15,913,000
        
        
        
        
        
        
          $
        
        
          42,261,000
        
        
        
        
        
        
          $
        
        
          46,362,000
        
      
      
        
          Investment Income
        
        
        
        
        
        
          1,332,000
        
        
        
        
        
        
        
        
          1,216,000
        
        
        
        
        
        
        
        
          3,894,000
        
        
        
        
        
        
        
        
          3,629,000
        
      
      
        
          Realized Investment (Losses) Gains
        
        
        
        
        
        
          (1,174,000
        
        
          )
        
        
        
        
        
        
          (4,000
        
        
          )
        
        
        
        
        
        
          (1,026,000
        
        
          )
        
        
        
        
        
        
          529,000
        
      
      
        
          Other Income
        
        
        
        
        
        
          254,000
        
        
           
        
        
        
        
        
        
          261,000
        
        
           
        
        
        
        
        
        
          927,000
        
        
           
        
        
        
        
        
        
          820,000
        
      
      
        
          Total Revenues
        
        
        
        
          $
        
        
          12,119,000
        
        
           
        
        
        
        
          $
        
        
          17,386,000
        
        
           
        
        
        
        
          $
        
        
          46,056,000
        
        
           
        
        
        
        
          $
        
        
          51,340,000
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (Loss) Income from Continuing Operations
        
        
        
        
          $
        
        
          (6,945,000
        
        
          )
        
        
        
        
          $
        
        
          1,505,000
        
        
        
        
        
        
          $
        
        
          (6,199,000
        
        
          )
        
        
        
        
          $
        
        
          3,169,000
        
      
      
        
          Income (Loss) from Discontinued Operations
        
        
        
        
        
        
          -
        
        
           
        
        
        
        
        
        
          -
        
        
           
        
        
        
        
        
        
          -
        
        
           
        
        
        
        
        
        
          1,319,000
        
      
      
        
          Net (Loss) Income
        
        
        
        
          $
        
        
          (6,945,000
        
        
          )
        
        
        
        
          $
        
        
          1,505,000
        
        
           
        
        
        
        
          $
        
        
          (6,199,000
        
        
          )
        
        
        
        
          $
        
        
          4,488,000
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          (Loss) Earnings Per Share from Continuing Operations
        
        
        
        
          $
        
        
          (2.82
        
        
          )
        
        
        
        
          $
        
        
          0.61
        
        
        
        
        
        
          $
        
        
          (2.51
        
        
          )
        
        
        
        
          $
        
        
          1.28
        
      
      
        
          Earnings Per Share from Discontinued Operations
        
        
        
        
        
        
          -
        
        
           
        
        
        
        
        
        
          -
        
        
           
        
        
        
        
        
        
          -
        
        
           
        
        
        
        
        
        
          0.54
        
      
      
        
          Net (Loss) Earnings Per Common Share
        
        
        
        
          $
        
        
          (2.82
        
        
          )
        
        
        
        
          $
        
        
          0.61
        
        
           
        
        
        
        
          $
        
        
          (2.51
        
        
          )
        
        
        
        
          $
        
        
          1.82
        
      
    
    
      For the three months ended September 30, 2008, the Company reported a 
      net loss of $(6,945,000) or $(2.82) per share, as compared to net income 
      of $1,505,000, or $0.61 per share in the same three month period last 
      year. Primary factors contributing to the loss for the three months 
      ended September 30, 2008 are investment write downs due to “Other 
      Than Temporary Impairments” in the investment 
      portfolio and catastrophe losses from Hurricane Gustav and Hurricane 
      Ike. Investment write downs totaled $(1,277,000) net of tax, or $(0.52) 
      per share. Hurricane losses from insurance claims incurred from 
      Hurricane Gustav and Hurricane Ike totaled $(5,900,000) net of tax, or 
      $(2.39) per share.
    
    
      Premium revenue for the three month period ended September 30, 2008 
      declined 26% compared to the same period last year. The most significant 
      factor contributing to the decline in premium revenue for the quarter 
      was an increase in ceded premium due to the payment of catastrophe 
      reinstatement premium triggered by Hurricane Gustav. However, the 
      Company has experienced a decline in core premium revenue of 7% during 
      2008.
    
    
      For the nine months ended September 30, 2008, the Company reported a net 
      loss of $(6,199,000) or $(2.51) per share, as compared to net income of 
      $4,488,000, or $1.82 per share in the same nine month period last year. 
      Third quarter hurricane and investment losses were the primary factors 
      contributing to the year to date loss in 2008.
    
    
      Shareholders’ equity as of September 30, 3008 
      totaled $35,106,000, a decline of 22% for the quarter. Hurricane losses 
      and realized investment losses due to impairment write downs were the 
      primary factors contributing to the decline in the Company’s 
      capital position. However, a decline in market value of the Company’s 
      investment portfolio of approximately 5% led to a decline in accumulated 
      unrealized capital gains of $5,346,000 further reducing the capital 
      position of the Company at September 30, 2008. While the decline in the 
      Company’s capital position due to these 
      unprecedented events of the last quarter have been significant, the 
      Company remains well capitalized at levels that are sufficient to 
      support current business plans.
    
    
      The National Security Group, Inc., through its property & casualty and 
      life insurance subsidiaries, offers property, casualty, life, accident 
      and health insurance in twelve states.