National Security Group Inc. (NSEC) filed Quarterly Report for the period ended 2009-09-30.
NATIONAL SECURITY GROUP, INC. is an insurance holding company. National Security Group Inc. has a market cap of $18.9 million; its shares were traded at around $7.63 with a P/E ratio of 6.8 and P/S ratio of 0.3. The dividend yield of National Security Group Inc. stocks is 7.8%. National Security Group Inc. had an annual average earning growth of 11.5% over the past 5 years.
Highlight of Business Operations:
Premium revenue increased $2.65 million to $14,357,000 compared to $11,707,000 for the three months ended September 30, 2008. Catastrophe reinsurance premium ceded decreased 2008 net premium revenue in the third quarter by an additional $1.6 million due to catastrophe reinstatement premium payments triggered by Hurricane Gustav.
For the three-month period ended September 30, 2009, the Company generated an income tax benefit of $103,000 compared to an income tax benefit of $3,367,000 in the same period last year. Pre-tax income of $548,000 included a non-taxable increase in value of company owned life insurance of $208,000. Also, an adjustment in expense allocation during the quarter between the life insurance subsidiary and the P&C subsidiaries resulted in a decline in the effective tax rate on a consolidated basis for the quarter due to the effects of the small life deduction. These two items resulted in a decrease in the Company’s current income tax accrual for the quarter.
For the nine months ended September 30, 2009, premiums earned were $44,950,000 compared to $42,261,000 for the same period last year; an increase of 6.4%. NSIC ended the first nine months of 2009 with premium revenue of $5,504,000 compared to $5,377,000 for the same period last year. Year-to-date premiums earned for NSIC were up due to a $278,000 increase related to increased production related to a new cancer product launched in July 2008. The P&C segment ended the first nine months of 2009 with year-to-date earned premiums of $39,446,000 compared to $36,884,000 for the same period last year; an increase of 6.9%. An increase in production associated with dwelling property lines of business and a decrease in ceded earned premium were the primary factors contributing to the increase in earned premium.
Realized capital losses were significantly less at $151,000 for the first nine months of 2009 compared to capital losses $1,026,000 for the same period last year. Net realized losses for the current period were primarily comprised of $286,000 in other-than-temporary impairments and $129,000 in net realized gains from the sale of investments. Likewise, realized losses for the same period last year were generated primarily from the recognition of $1,722,000 in other-than-temporary impairments which were partially offset by realized capital gain on equity investments of $418,000.
Invested assets at September 30, 2009 increased $10,472,000 compared to December 31, 2008. Much improved market conditions contributed to a recovery of approximately $4,968,000 in market value of fixed maturity available-for-sale securities. Approximately $1,093,000 of the increase in invested assets is attributable to a recovery in the value of equity investments. The value of the Company’s investment in company owned life insurance increased in value by $658,000.
At September 30, 2009, the Company had aggregate equity capital, unrealized investment gains (net of income taxes) and retained earnings of $40,425,000, up $5,777,000 compared to December 31, 2008. Recoveries in market values of fixed maturities and equity securities totaling $4,533,000 (net of tax) were the primary factors contributing to the improved equity position. Additional factors contributing to the change in equity were year-to-date net income of $2,224,000, a gain on the interest rate swap of $130,000 and dividends paid of $1,110,000.
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