SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

SHAREHOLDERS' EQUITY

10. SHAREHOLDERS' EQUITY

Common Stock Repurchases

The Company may repurchase shares in open market transaction or under Rule 10b5-1 trading plans from time to time in its discretion, based on ongoing assessments of the Company’s capital needs, the market price of its common stock and general market conditions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors.

In March 2017, the Company’s Board of Directors authorized a program to repurchase shares of common stock of FNHC, at such times and at prices as management determined advisable, up to an aggregate of $10.0 million of common stock through March 31, 2018. This authorization was fully expended as of March 31, 2018.

In December 2017, the Company’s Board of Directors authorized an additional share repurchase program under which the Company may repurchase up to $10.0 million (plus $0.8 million remaining from previous authorization) of its outstanding shares of common stock through December 31, 2018. During the three months ended March 31, 2018, the Company repurchased 322,865shares of its common stock at a total cost of $5.0 million, which is an average price per share of $15.49.  As of March 31, 2018, the remaining availability for future repurchases of our common stock under this program was $5.8 million.

Stock Compensation Plan

In April 2012, the Company’s Board of Directors adopted, and in September 2012 the Company’s shareholders approved, the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). The 2012 Plan permits the issuance of up to 1,000,000 shares of the Company’s common stock, subject to adjustment as provided for in the 2012 Plan, in connection with the grant of a variety of equity incentive awards, such as stock options and restricted stocks. Officers, directors, executive management and all other employees of the Company and its subsidiaries are eligible to participate in the 2012 Plan. Awards may be granted singly, in combination, or in tandem. The 2012 Plan will expire on April 5, 2022.

Share-Based Compensation Expense

Share-based compensation arrangements include the following:

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	Three Months Ended
	March 31,
	2018		2017
	(in thousands)
Restricted stock	$	665	$	667
Stock options	—		—
Total share-based compensation expense	$	665	$	667
Intrinsic value of options exercised	$	—	$	7
Fair value of restricted stock vested	$	1,187	$	1,350

The intrinsic value of options exercised represents the difference between the stock option exercise price and the weighted average closing stock price of FNHC common stock on the exercise dates, as reported on the NASDAQ Global Market.

Stock Option Awards

A summary of the Company’s stock option activity includes the following:

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	Number of Shares	Weighted Average Option Exercise Price
Outstanding at January 1, 2018	50,351	$	3.72
Granted	—	—
Exercised	—	—
Cancelled	—	—
Outstanding at March 31, 2018	50,351	$	3.72

Restricted Stock Awards

The Company recognizes share-based compensation expense for all restricted stock awards (“RSAs”) held by the Company’s directors, executives and other key employees. For all RSA awards, excluding relative total shareholder return ("TSR"), the accounting charge is measured at the grant date as the fair value of FNHC common stock and expensed as non-cash compensation over the vesting term using the straight-line basis for service awards and over successive one-year requisite service periods for performance‑based awards.  Our expense for our performance awards depends on achievement of specified results, therefore the ultimate expense can range from 0% to 250% of target. Our TSR cliff vesting awards contain performance criteria which are tied to the achievement of certain market conditions. The TSR grant date fair value was determined using a Monte Carlo simulation and unlike the performance condition awards, the expense is not reversed if the performance condition is not met. This value is recognized as expense over the requisite service period using the straight‑line recognition method.

During the three months ended March 31, 2018 and 2017, the Board of Directors granted 130,458 and 96,454 RSAs, respectively, vesting over three or five years, to the Company’s directors, executives and other key employees.

RSA activity includes the following:

	Number of Shares		Weighted Average
Outstanding at January 1, 2018	297,543		$	20.57
Granted	130,458		$	16.25
Vested	(53,571	)	$	22.15
Cancelled	(16,539	)	$	18.25
Outstanding at March 31, 2018	357,891		$	18.86

The weighted average grant date fair value is measured using the closing price of FNHC common stock on the grant date, as reported on the NASDAQ Global Market.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income consisted of the following:

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	Three Months Ended March 31,
	2018									2017
	Before Tax			Income Tax			Net			Before Tax		Income Tax			Net
	(in thousands)
Accumulated other comprehensive income, beginning of period	$	2,287		$	(593	)	$	1,694		$	3,324	$	(1,201	)	$	2,123
Cumulative effect of new accounting standards	(1,349		)	355			(994		)	—		—			—
Other comprehensive (loss) income before reclassification	(7,200		)	1,825			(5,375		)	3,605		(1,404		)	2,201
Reclassification adjustment for realized and unrealized losses (gains) included in net income	1,052			(238		)	814			105		(41		)	64
	(6,148		)	1,587			(4,561		)	3,710		(1,445		)	2,265
Accumulated other comprehensive (loss) income, end of period	$	(5,210	)	$	1,349		$	(3,861	)	$	7,034	$	(2,646	)	$	4,388