The National Security Group, Inc. Releases Second Quarter Results

ELBA, Ala. -- Results for the three months and six months ended June 30, 2011 and 2010, based on accounting principles generally accepted in the United States of America, were reported today as follows:

[Table Omitted][Table Omitted]The following table is the calculation of EBITDA for the periods indicated (in thousands):Liquidity and Capital ResourcesThe Company ended the quarter ended June 30, 2011 with a net loss of $4,945,000, $2.00 per share, compared to a net income of $814,000, $0.33 per share, for the same period last year. The primary reason for the decline in net income was an increase in incurred losses and incurred adjustment expenses in the P&C segment from several severe weather related events during April of 2011. The month of April, 2011 was one of the most active spring storm seasons in history. According to statistics from the National Weather Service and Storm Prediction Center, there were 753 Tornadoes nationwide during the month of April, four of which were rated EF5. All four of the EF5 tornadoes occurred on April 27, 2011. As a result of the tornado, severe wind and hail activity occurring April 25-27, 2011 (hereafter referred to as CAT 46) in the Company’s coverage area, the P&C segment incurred losses and loss adjustment expenses, before reinsurance of $9,936,000. Net income, net of reinsurance, for the three and six month periods ended June 30, 2011, was reduced by $3,777,000 ($1.53 per share) due to storm related losses from this event.Forward-Looking StatementsPremium revenue for the six-months ended June 30, 2011, decreased $2,750,000 compared to the same period last year. The primary reason for the decrease in net earned premium was an increase in ceded premium from catastrophe reinstatement. Also impacting the decline were decreases in the homeowners and personal lines auto business.

The National Security Group, Inc., through its property & casualty and life insurance subsidiaries, offers property, casualty, life, accident and health insurance in thirteen states. The Company writes primarily personal lines property coverage including dwelling fire and windstorm, homeowners, mobile homeowners and personal non-standard automobile lines of insurance. The Company also offers life, accident and health, supplemental hospital and cancer insurance products. The Company was founded in 1947 and is based in Elba, Alabama.