The National Security Group, Inc. (NASDAQ:NSEC) financial results for
the three months and twelve months ended December 31, 2013 and 2012,
were reported today as follows:
For the three months ended December 31, 2013, the Company had net income
of $1,763,000, $0.71 per share, compared to net income of $731,000,
$0.30 per share, for the same period last year. On a pretax basis,
fourth quarter of 2013 income was $2,326,000 compared to income of
$1,220,000 during the fourth quarter of 2012. Pretax income consisted of
income from operations of $2,241,000 and realized capital gains of
$85,000. In the fourth quarter of 2012, pretax income consisted of
income from operations of $1,197,000 and realized investment gains and
other income of $23,000.
There were two primary reasons for the improved fourth quarter 2013
operating results. First, our fourth quarter premium revenue increased
$321,000, driven by growth in our property and casualty segment's
dwelling fire line of business. Second, improved weather patterns
contributed to a $497,000 reduction in claims related expenses in the
fourth quarter of 2013 compared to last year.
For the year ended December 31, 2013, the Company had net income
totaling $5,658,000, $2.28 per share, compared to a net loss of
$6,671,000, $2.70 loss per share, for the year ended December 31, 2012.
On a pretax basis, for the year ended December 31, 2013, we had income
of $7,323,000 compared to a loss of $11,064,000 for the year in 2012.
Our pretax income for the year ended December 31, 2013, consisted of
income from operations of $2,884,000 and realized investment gains of
$4,439,000. The pretax loss for the year ended December 31, 2012,
consisted of a loss from operations of $526,000, realized investment
gains of $2,790,000 and expenses associated with a non-insurance related
litigation settlement (Mobile Attic Litigation) of $13,328,000.
For the year ended December 31, 2012, pretax income was adversely
impacted by litigation related settlement expenses of $13,328,000. This
settlement was associated with previously disclosed litigation stemming
from the sale of a holding company investment, Mobile Attic Inc., and
was not associated with either of our insurance segments. Since this
action was settled in 2012, our 2013 results were not impacted by this
The significant improvement in income from operations in 2013 compared
to the prior year was primarily associated with improved underwriting
results in the property and casualty segment. Favorable weather patterns
during 2013, particularly in the second half of the year, contributed to
a $1,918,000 decrease in non-catastrophe related wind and hail claims.
In addition, fire related losses were down $725,000 compared to 2012.
Our 2012 results were adversely impacted by losses from Hurricane Isaac.
Losses from Isaac increased our incurred losses in 2012 by $3,390,000.
Realized capital gains were $4,439,000 in 2013 compared to $2,790,000
for the same period last year. The $1,649,000 increase in year over year
realized capital gains was primarily due to the September 2013 sale of
2,739 acres of investment real estate consisting of timber property in
Alabama. Capital gains in 2012 were primarily associated with the sale
of debt and equity investments held by the insurance subsidiaries.
Shareholders' equity as of December 31, 2013 was $33,472,000 up
$3,245,000 compared to $30,227,000 as of December 31, 2012. Book value
per share increased $1.17 per share for the period ended December 31,
2013 to $13.42 per share compared to $12.25 per share at December 31,
2012. The primary reason for the increase in book value per share was
the significant turnaround in net income due to both improved operating
results in the insurance subsidiaries and the increase in equity due to
the realized capital gain on the sale of timber property mentioned
The National Security Group, Inc. (NASDAQ Symbol: NSEC), through its
property & casualty and life insurance subsidiaries, offers property,
casualty, life, accident and health insurance in ten states. The Company
writes primarily personal lines property coverage including dwelling
fire, homeowners, and mobile homeowners 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. Additional information about the Company, including
additional details of recent financial results, can be found on our
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