On October 29, 2011, the Board of Directors of The National Security Group, Inc. (NASDAQ:NSEC), declared a quarterly dividend of $.10 per share. This cash dividend is payable on November 30, 2011, to shareholders of record November 14, 2011.

The quarterly cash dividend was reduced by 33% compared to prior quarters of 2011. The dividend reduction was necessary primarily due to an increase in storm losses during the first six months of 2011. More specifically, during the month of April, we experienced the most severe spring tornado season in Company history with over $12 million in insured losses before reinsurance recoveries. While we maintain catastrophe reinsurance to mitigate risk associated with severe weather related events, the unprecedented frequency and severity of the April storms significantly impacted our net income and reduced capital levels in our property and casualty insurance subsidiaries. Additional details regarding the spring storms can be found in our latest Form 10-Q filed on August 15, 2011. Due to the adverse impact of these events, we have found it necessary to reduce the November 2011 quarterly dividend. Our dividend policy will remain under review in the coming quarters as we seek to rebuild capital lost in the tumultuous spring and early summer storm season.

With its home office in Elba, Alabama, The National Security Group, Inc. is an insurance holding company. Company shares are traded on the NASDAQ Global Market under the symbol NSEC.

This news release deals primarily with forward-looking statements based upon our estimates and expectations of future events. These statements are subject to certain risks and uncertainties that can cause actual results to vary materially from the expected results described in the forward-looking statements. Forward-looking statements are identified by words such as, but not limited to, “anticipate,” “believe,” “estimate,” “expect,” “hope,” “hopeful,” “intend,” “may,” “optimistic,” “potential,” “preliminary,” “project,” “should,” “will,” and other analogous expressions. Many factors can cause our actual results to differ materially from those in the forward-looking statements. Thus, because we are addressing forward looking statements through this news release, you should view it in its entirety as a forward looking statement providing our outlook on future business. Please see our SEC filings on Forms 10K, 10Q and 8-K for an additional discussion on important risk factors.

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