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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

Commission File Number: 0-18649

THE NATIONAL SECURITY GROUP, INC.
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code       (334) 897-2273

Not Applicable
(Former name, address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes (X) No ( )

        Number of Shares of Common Stock outstanding as of May 8, 2004: 2,466,600

        Exhibit index is located on page 17.

Page 1 of 22 pages

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THE NATIONAL SECURITY GROUP, INC

INDEX

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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements
THE NATIONAL SECURITY GROUP, INC.

CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
(In thousands, except per share amounts)

The Notes to Financial Statements are an integral part of these statements.

3

THE NATIONAL SECURITY GROUP, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amount)

The Notes to the Financial Statements are an integral part of these statements.

4

THE NATIONAL SECURITY GROUP, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share amounts)

The Notes to the Financial Statements are an integral part of these statements.

5

THE NATIONAL SECURITY GROUP, INC.

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
(In thousands)

The Notes to the Financial Statements are an integral part of these statements.

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THE NATIONAL SECURITY GROUP, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1-Basis of Presentation

The consolidated unaudited financial statements have been prepared in conformity with generally accepted accounting principles. The interim financial statements include all adjustments necessary, in the opinion of management, for fair statement of financial position, results of operations and cash flows for the periods reported. These adjustments are all normal recurring adjustments. A summary of the more significant accounting policies are set forth in the notes to the audited consolidated financial statements for the year ended December 31, 2003.

The accompanying consolidated unaudited financial statements include the accounts of The National Security Group, Inc. (the Company) and its wholly owned subsidiaries: National Security Insurance Company (NSIC), National Security Fire and Casualty Company (NSFC) and Natsco, Inc. (Natsco). NSFC includes a wholly owned subsidiary, Omega One Insurance Company.

The accompanying consolidated unaudited financial statements also include an investment in affiliate, which consists of a fifty percent interest in The Mobile Attic, Inc and its wholly owned subsidiary established in January of 2004, Mobile Attic Franchising Company (MAFCO). The Mobile Attic, Inc. is a portable storage leasing company that began operations in 2001. MAFCO was established in the first quarter of 2004 to conduct the business of selling Mobile Attic portable storage leasing franchises. Effective in the first quarter of 2004 the Company consolidates the accounts Mobile Attic Inc and subsidiary MAFCO according to guidance in Financial Accounting Standards Board Interpretation 46 as revised December 2003 (FIN 46R).

Changes in financial statement presentation as a result of the adoption of recently issued accounting standards: As disclosed in the notes to the audited consolidated financial statements for the year ended December 31, 2003, the Company adopted Financial Accounting Standards Board Interpretation 46 as revised December 2003 (FIN 46R), in the first quarter of 2004. As a result of the adoption of FIN 46R, triggered by previously existing and disclosed guarantees of Mobile Attic debt by the Company, the Company consolidated an investment in a subsidiary Mobile Attic, Inc. Further details of the debt guarantees are discussed in Note 6 to these consolidated financial statements.

Mobile Attic was previously reported using the equity method of accounting. For comparative purposes, the Company made adjustments to the December 31, 2003 Balance Sheet shown in this Form 10-Q and the Income Statement for the period ended March 31, 2003. These adjustments increased December 31, 2003 assets by $15,109,000 and liabilities by $13,394,000. The adjustment had no effect on consolidated stockholders equity. Certain accounts in the Income Statement for the period ended March 31, 2003 were adjusted as a result of the consolidation of Mobile Attic, but because the results of Mobile Attic were previously reported under the equity method, the adjustments had no effect on the consolidated results of operations for the period ended March 31, 2003.

Note 2-Reinsurance

National Security Fire and Casualty Company (“NSFC”), Omega One Insurance Company (“OMEGA”), and National Security Insurance Company (“NSIC”) wholly owned subsidiaries of the Company, reinsure certain portions of insurance risk, which exceed various retention limits. NSFC, OMEGA, and NSIC are liable for these amounts in the event assuming companies are unable to meet their obligations.

Note 3-Calculation of Earnings Per Share

Earnings per share were based on net income divided by the weighted average common shares outstanding. The weighted average number of shares outstanding for the period ending March 31, 2004 was 2,466,600 and for the period ending March 31, 2003 was 2,466,600.

Note 4-Changes in Shareholder’s Equity (in thousands)

During the three months ended March 31, 2004 and 2003, there were no changes in shareholders’ equity except for net income of $1,053,000 and $770,000 respectively; dividends paid of $518,000 and $506,000 respectively; and unrealized investment gains (losses), net of applicable taxes, of $590,000 and $71,000 respectively.

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THE NATIONAL SECURITY GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
(Continued)

Note 5 — Deferred Taxes

The tax effect of significant temporary differences representing deferred tax assets and liabilities are as follows: (in thousands)

Deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of the enacted tax laws.

Note 6-Contingencies

Financial Guarantee

At March 31, 2004, the Company guaranteed $13 million lines of credit of its affiliate, Mobile Attic, Inc. The Company is paid a guaranty fee based on the average balance of the lines of credit. The guarantees expire in April 2004 and May 2006. The Company expects to continue the guarantee expiring in April 2004 for an additional year upon refinancing of the debt, which is currently in progress. Credit risk represents the accounting loss that would be recognized at the reporting date if Mobile Attic, Inc. failed to perform completely as contracted. The maximum credit risk of $13 million assumes that no amounts could be recovered from other parties. The book value of mobile storage units, which serves as collateral on the lines of credit, was $14.1 million at March 31, 2004. As a result of the existence of the guarantees, the Company consolidated the accounts of Mobile Attic, Inc. in March 2004 financial statements according to the provisions of FASB Interpretation 46 (revised December 2003) of Accounting Research Bulletin No. 51.

Litigation

The Company and its subsidiaries continue to be named as parties to litigation related to the conduct of their insurance operations. These suits involve alleged breaches of contracts, torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of agents of the Company’s subsidiaries, and miscellaneous other causes of action. Most of these lawsuits include claims for punitive damages in addition to other specified relief.

In two separately filed actions, NSIC is named as a defendant in purported class actions relating to the past sale of industrial burial insurance. The actions address whether the premiums charged were “excessive” relative to the benefit provided and whether the premiums charged were in any manner discriminatory relative to the race of the person insured. In addition, several individual actions on behalf of specifically named persons have been filed with similar allegations. No class has been certified in either of the purported class actions although a Motion for Class Certification has been filed in one of the actions. While NSIC did at one time sell industrial burial insurance, no such plans have been sold for several decades.

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THE NATIONAL SECURITY GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
(Continued)

The company establishes and maintains reserves on contingent liabilities to the extent losses are probable and amounts are estimable. In many instances, however, it is not feasible to predict the ultimate outcome with any degree of accuracy. While a resolution of these matters may significantly impact consolidated earnings and the Company’s consolidated financial position, it remains management’s opinion, based on information presently available, that the ultimate resolution of these matters will not have a material impact on the Company’s consolidated financial position. However, it should be noted that instances of class action lawsuits against insurance companies appear to be increasing in several states in which insurance subsidiaries of the company operate.

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ACCOUNTANTS’ REVIEW REPORT

Board of Directors
The National Security Group, Inc.
Elba, Alabama

We have reviewed the accompanying consolidated balance sheet of The National Security Group, Inc. as of March 31, 2004, and the related consolidated statements of income, shareholders’ equity and cash flows for the period then ended in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of The National Security Group, Inc.

A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.

/s/Barfield, Murphy, Shank & Smith, P.C.

May 14, 2004

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Item 2.

MANAGEMENTS’DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following discussion addresses the financial condition of The National Security Group, Inc. as of March 31, 2004, compared with December 31, 2003 and its results of operations and cash flows for the quarter ending March 31, 2004, compared with the same period last year.

The reader is assumed to have access to the Company’s 2003 Annual Report. This discussion should be read in conjunction with the Annual Report and with consolidated financial statements on pages 3 through 6 of this form 10-Q.

Information is presented in whole dollars.

CONSOLIDATED RESULTS OF OPERATIONS

Premium revenues:

Premium revenue of the Company is generated by three wholly owned subsidiaries, National Security Insurance Company (NSIC), National Security Fire & Casualty Company (NSFC), and Omega One Insurance Company (Omega). NSIC is a life, accident and health insurance company. NSFC and Omega write property and casualty lines of insurance, primarily dwelling fire, homeowners, and private passenger auto.

The following table sets forth premium revenue by major line of business for the three months ended March 31, 2004 compared to the same period last year:

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Premium revenue in the life insurance subsidiary, NSIC accounts for 11% of total premium income of the Company. NSIC has two primary methods of distribution of insurance products, employee agents and independent agents. Employee agents primarily consist of home service agents that sell policies and collect premium primarily in the insured’s home. Changing demographics has necessitated a need to diversify to alternative means of distribution. In an effort to increase production of new business and penetrate markets in states outside of Alabama, NSIC began appointing independent agents in 1998. Independent agents now account for over 90% of all new business production in NSIC. Gross premium revenue produced by independent agents was up 25% in the first quarter of 2004 compared to the same period last year.

Premium revenue in NSIC consists of traditional life insurance products and supplemental accident and health products. As set forth in the preceding table, traditional life insurance premium revenue increased over 11% in the first three months of 2004 compared to the same period last year. Accident and health insurance premium revenue increased 3.4%. Increased sales of simplified and guaranteed issue life insurance products and lump sum cancer and critical illness health products through independent agents are the primary factors contributing to the increase in NSIC premium revenue.

Premium revenue in the property/casualty insurance subsidiaries continued to grow with an increase of 43.79% in the first three months of 2004 compared to the same period last year. The property/casualty subsidiaries have sustained significant growth rates of 40% plus over the last two years. The rate of growth is expected to decline to more sustainable levels over the next year with total property and casualty premium revenue expected to be up in the range of 25 to 30% for the year in 2004. Ultimately Company management expects core lines of business to settle into a healthy and sustainable growth rate of between 10 and 20%. These growth estimates are subject to market conditions, which can swing quite dramatically in the property and casualty insurance industry.

Over 85% of first quarter premium revenue in the property/casualty insurance subsidiaries was produced in two primary lines of business, dwelling fire and homeowners (including mobile homeowners). A summary of the performance of these two primary lines of business in the first quarter of 2004 follows:

Dwelling fire insurance premium, which accounts for 50% of total property/casualty premium revenue, increased 60.14% in the first three months of 2004 compared to the same period in 2003. The Company has experienced significant growth in this core line of business due to increased marketing efforts and the exodus of some competitors in certain markets for this line of business. The Company has also experienced good underwriting results from the dwelling fire line of business with a combined ratio of under 90% in the first quarter of 2004 compared to a 100% combined ratio in the first quarter of 2003.

Homeowners insurance premium, which accounts for 38.7% of total property/casualty premium revenue, increased 52.76% in the first quarter of 2004 compared to the same period last year. The homeowners line of business as it exists today is a new product line for the property/casualty subsidiaries and does not have the mature profitable renewal base of business the dwelling fire program has in place so underwriting results have suffered as a result. However, underwriting results in this program have improved significantly over the last year. The combined ratio of the homeowners program was 105% in the first quarter of 2004 indicating an underwriting loss, but has shown signs of significant improvement compared to a combined ratio in excess of 120% in the first quarter of 2003. Company management has and will continue to monitor rates and seek rate increases when warranted to insure long term viability of this product.

        Increased marketing efforts, modernization of product lines including increases in policy limits, decreased competition in several markets, and rate increases implemented in several states are the primary contributing factors to the increase in dwelling property premium revenue. The remaining primary lines of insurance contributing to the increased growth in property/casualty premium revenue are automobile liability and physical damage. In the year 2000 the property/casualty subsidiaries began a non-standard auto program in Alabama with a monthly premium payment option. The program was expanded into Mississippi in the fourth quarter of 2001. This program was acquired through the acquisition on Liberty Southern Insurance Company of Mobile, Alabama. This non-standard auto program is the primary contributor to the increase in automobile premium revenue.

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Rental Revenue:

Rental revenue is generated by the Company’s 50% owned subsidiary, Mobile Attic, Inc. As discussed in the notes to the financial statements, Mobile Attic was previously accounted for using the equity method. Mobile Attic rental revenue is generated from the rental of portable storage containers for industrial and household consumers. In the first quarter of 2004 rental revenues were up 45% compared to the same quarter last year. Due to the very early stages of this business, utilization rates of storage units have not reached optimum levels, but early results have been encouraging and the business is generating positive cash flow from operations.

Net investment income:

Net investment income is virtually unchanged compared to last year. Due to growth in insurance operations, primarily in the property/casualty subsidiaries, the Company has generated significant increases in cash flow and invested assets. However, due to the historically low interest rate environment, overall investment income has not increased at the pace of invested assets. Currently most major economic indicators point to a significant increase in market interest rates over the next two years. The bond investment portfolio is being positioned to take advantage of the expected higher interest rate environment.

Realized capital gains and losses:

Realized capital gains were up significantly in the first quarter of 2004 compared to the same period last year primarily due to capital gains generated from sales of fixed income securities in the companies investment portfolio.

Other income:

Other income is down $23,000 compared to last year. Other income primarily consists of billing fees from the non-standard monthly pay automobile programs in Alabama and Mississippi.

Policyholder benefits and settlement expenses:

Policyholder benefits and settlement expenses increased $1,860,000, but as a percent of earned premium decreased compared to last year, 57.36% versus 60.97%. Property/casualty underwriting results were much improved in the first quarter of 2004 with a statutory combined ratio of less than 95%. A decrease in loss frequency in 2004 compared to 2003 was the primary factor contributing to the improved underwriting results.

Policy acquisition costs:

Policy acquisition costs are up $745,000 compared to last year. Policy acquisition cost are directly related to the production of earned premium and as a percentage of premium earned, policy acquisition costs are virtually unchanged from last year.

General insurance expenses:

General expenses as a percent of earned premium were 16.5% in the first quarter of 2004 compared to 15.8% in the first quarter of 2003. The Company has realized greater efficiencies through economies of scale over the last two years with the increase in premium revenue. Management continues to improve upon processes and systems to achieve greater efficiency in insurance operations.

Insurance taxes, licenses, and fees:

Insurance taxes, licenses and fees are 5.17% of premium revenue in the first quarter of 2004 compared to 4.48% in the first quarter of last year. The 69 basis point increase is primarily associated with premium revenue growth in higher tax rate states.

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Summary:

The Company has a year to date net income of $1,053,000 versus net income of $770,000 in the first quarter of 2003. As discussed in previous paragraphs, continued improvement in underwriting results in the property/casualty subsidiaries and an increase in unrealized capital gains were the primary factor contributing to the improved earnings.

Investments:

Investments at March 31, 2004 were down $64,000 compared to December 31, 2002, a decline of less than 1%.

Invested assets tend to rise as cash flow from operations increase. Net cash used in operations was ($131,000) in the first quarter of 2004.

The Company considers any fixed income investment with a Standard & Poor’s rating of BB+ or lower to be below investment grade (Commonly referred to as “Junk Bonds”). At March 31, 2004 less than 1% of the Company’s investment portfolio was invested in fixed income investments rated below investment grade. The Company currently has no bonds in the investment portfolio in default.

The Company monitors its level of investments in debt and equity securities held in issuers of below investment grade debt securities. Management believes the level of such investments is not significant to the Company’s financial condition.

Income taxes:

The effective tax rate in the first three months of 2004 was 30.12% compared to 34.9% for the first three months of 2003. Generally the property/casualty subsidiaries pay a higher effective tax rate due to several factors, including, but not limited to, a tax on 20% of unearned premiums, the discounting of loss reserves for federal income tax purposes, and tax on a portion of income from otherwise “tax-free” bonds. A higher percentage of earnings from property/casualty operations compared to life insurance operations generally lead to a higher effective tax rate.

Liquidity and capital resources:

At March 31, 2004, the Company had aggregate equity capital, unrealized investment gains (net of income taxes) and retained earnings of $46,997,000 up $1,125,000 compared to December 31, 2003. The increase reflects net income of $1,053,000, an increase in accumulated unrealized investment gains of $590,000, and dividends paid of $518,000.

The Company has $2.9 million in notes from local banks which management intends to repay over the next five years.

Due to the implementation of FIN 46R as disclosed in the notes to these consolidated financial statements, the Company has consolidated a 50% owned subsidiary Mobile Attic. Mobile Attic has current debt due of $5,000,000, which will be refinanced in the second quarter of 2004. Mobile Attic also has long-term debt due in 2006 of $7.9 million. Due to the existence of debt guarantees made by the Company in 2002, the Company consolidated the accounts of Mobile Attic under the provisions of FIN 46R issued in December of 2003. Assets of Mobile Attic primarily consisting of $15,000,000 in portable storage units secure the debt of Mobile Attic.

Mobile Attic is only in its third year of operations and utilization rates of existing portable storage containers have yet to reach optimum level, but cash flow from operations in Mobile Attic is sufficient to cover current debt service requirements. Mobile Attic is expected to realize a significant increase in cash from operations over the next year from the operations of its leasing business and also from the operations of a wholly owned subsidiary MAFCO which will begin offering Mobile Attic portable storage leasing franchises across the United States in 2004. The increased cash flow from Mobile Attic operations will allow for the commencement of principal pay downs of existing debt. Management expects that, as operations of Mobile Attic reach a level of greater maturity over the coming months, Mobile Attic will be able to obtain financing without the support of financial guarantees by the Company. Management does not expect the Company to make any additional capital contributions to support Mobile Attic operations and considers the likelihood of the financial guarantees to be invoked to be remote.

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The Company had $765,000 in cash and cash equivalents at March 31, 2004. Net cash used in operating activities was $131,000 for the current period, compared to net cash used of $464,000 for the period ended March 31, 2003. Cash provided by investing activities was $501,000. Cash dividends paid to stockholders’ of $518,000 was the primary component of cash used in financing activities.

The liquidity requirements of the Company are primarily met by funds provided from operations of the life insurance and property/casualty subsidiaries. The Company receives funds from its subsidiaries consisting of dividends, payments for federal income taxes, and reimbursement of expenses incurred at the corporate level for the subsidiaries. These funds are used to pay stockholder dividends, corporate interest, corporate administrative expenses, federal income taxes, and for funding investments in subsidiaries.

The Company’s subsidiaries require cash in order to fund policy acquisition costs, claims, other policy benefits, interest expense, general expenses, and dividends to the Company. Premium and investment income, as well as maturities, calls, and sales of invested assets, provide the primary sources of cash for both subsidiaries. A significant portion of the Company’s investment portfolio consists of readily marketable securities, which can be sold for cash.

The Company’s business is concentrated primarily in the Southeastern United States. Accordingly, unusually severe storms or other disasters in the Southeastern United States might have a more significant effect on the Company than on a more geographically diversified insurance company. Unusually severe storms, other natural disasters and other events could have an adverse impact on the Company’s financial condition and operating results. However, the Company maintains a catastrophe reinsurance program to limit the effect of such catastrophic events on the Company’s financial condition.

Information about Forward-Looking Statements

Any statement contained in this report which is not a historical fact, or which might otherwise be considered an opinion or projection concerning the Company or its business, whether expressed or implied, is meant as and should be considered a forward-looking statement as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions and opinions concerning a variety of known and unknown risks, including but not limited to changes in market conditions, natural disasters and other catastrophic events, increased competition, changes in availability and cost of reinsurance, changes in governmental regulations, technological changes, political and legal contingencies and general economic conditions, as well as other risks and uncertainties more completely described in the Company’s filings with the Securities and Exchange Commission. If any of these assumptions or opinions prove incorrect, any forward-looking statements made on the basis of such assumptions or opinions may also prove materially incorrect in one or more respects and may cause future results to differ materially from those contemplated, projected, estimated or budgeted in such forward-looking statements.

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Item 3. Market Risk Disclosures

The Company’s primary objectives in managing its investment portfolio are to maximize investment income and total investment returns while minimizing overall credit risk. Investment strategies are developed based on many factors including changes in interest rates, overall market conditions, underwriting results, regulatory requirements, and tax position. Investment decisions are made by management and reviewed and approved by the Board of Directors. Market risk represents the potential for loss due to adverse changes in fair value of securities. The three potential risks related to the Company’s fixed maturity portfolio are interest rate risk, prepayment risk, and default risk. The primary risk related to the Company’s equity portfolio is equity price risk. There have been no material changes to the Company’s market risk for the three months ended March 31, 2004. For further information reference is made to the Company’s Form 10-K for the year ended December 31, 2003.

Item 4. Controls and Procedures

Company management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.

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Part     II. OTHER INFORMATION

Item     6. Exhibits and Reports on Form 8-K

a. Exhibits

11.     Computation of Earnings Per Share Filed Herewith, See Note 3 to Consolidated Financial Statements

99.1     Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

99.2     Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

99.3     Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.4     Certification Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

b.     Reports on Form 8-K during the quarter ended March 31, 2004

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned duly authorized officer, on its behalf and in the capacity indicated.

The National Security Group, Inc.

Dated: May 14, 2004

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The National SecurityGroup, Inc.
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, William L. Brunson, Jr. certify that:

1.     I have reviewed this quarterly report on Form 10-Q of The National Security Group, Inc.;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statement were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)     designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)     all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weakness in internal controls: and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.     The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness.

Date: May 14, 2004

/s/William L. Brunson, Jr.

William L. Brunson, Jr.
Chief Executive Officer

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The National Security Group, Inc.
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Brian R. McLeod certify that:

1.     I have reviewed this quarterly report on Form 10-Q of The National Security Group, Inc.;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statement were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)     designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)     all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weakness in internal controls: and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.     The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness.

Date: May 14, 2004

/s/Brian R. Mcleod

Brian R. McLeod, CPA
Chief Financial Officer

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The National Security Group, Inc.

CERTIFICATION PURSUANT TO
SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I, William L. Brunson, Jr. certify that:

Date: May 14, 2004

/s/William L. Brunson

William L. Brunson, Jr.
Chief Executive Officer

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The National Security Group, Inc.

CERTIFICATION PURSUANT TO
SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I, Brian R. McLeod certify that:

Date: May 14, 2004

/s/Brian R. Mcleod

Brian R. McLeod, CPAChief
Financial Officer

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