10. SHAREHOLDERS' EQUITY

Common Stock Repurchases

The Company may repurchase shares in open market transactions in accordance with Rule 10b-18 or under Rule 10b5-1 of the Exchange Act 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 six months ended June 30, 2018, the Company repurchased 326,708 shares of its common stock at a total cost of $5.1 million, which is an average price per share of $15.49. As of June 30, 2018, the remaining availability for future repurchases of our common stock under this program was $5.7 million.

Securities Offerings

In June 2018, the Company filed with the Securities and Exchange Commission (“SEC”) on Form S-3, a shelf registration statement enabling the Company to offer and sell, from time to time, up to an aggregate of $150.0 million of securities.

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.

In June 2018, the Company filed with the SEC on Form S-8, a registration statement registering 800,000 shares of common stock reserved for issuance under the Company’s 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”). The 2018 Plan, which was approved by the Company’s shareholders at the 2018 annual meeting, is an equity compensation plan that may be used for our employees, non-employee directors, consultants and advisors.

Share-Based Compensation Expense

Share-based compensation arrangements include the following:

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(In thousands)
Restricted stock	$	698	$	745	$	1,363	$	1,412
Stock options	—		—		—		—
Total share-based compensation expense	$	698	$	745	$	1,363	$	1,412

Intrinsic value of options exercised	$	78	$	7	$	78	$	7
Fair value of restricted stock vested	$	289	$	155	$	1,476	$	1,505

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	(4,667	)	3.39
Cancelled	—		—
Outstanding at June 30, 2018	45,684		$	3.75

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 six months ended June 30, 2018 and 2017, the Board of Directors granted 133,208 and 106,454 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	133,208		16.30
Vested	(65,571	)	22.51
Cancelled	(20,559	)	18.60
Outstanding at June 30, 2018	344,621		$	18.67

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 (Loss)

Accumulated other comprehensive income (loss) consisted of the following:

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	Three Months Ended June 30,
	2018								2017
	Before Tax			Income Tax		Net			Before Tax			Income Tax			Net
	(In thousands)
Accumulated other comprehensive income (loss), beginning-of-period	$	(5,210	)	$	1,349	$	(3,861	)	$	7,034		$	(2,646	)	$	4,388

Other comprehensive income (loss) before reclassification	(1,748		)	443		(1,305		)	3,862			(1,543		)	2,319
Reclassification adjustment for realized and unrealized losses (gains) included in net income	(208		)	24		(184		)	(2,648		)	1,023			(1,625		)
	(1,956		)	467		(1,489		)	1,214			(520		)	694
Accumulated other comprehensive income (loss), end-of-period	$	(7,166	)	$	1,816	$	(5,350	)	$	8,248		$	(3,166	)	$	5,082



	Six Months Ended June 30,
	2018									2017
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
	(In thousands)
Accumulated other comprehensive income (loss), 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 income (loss) before reclassification	(8,948		)	2,268			(6,680		)	7,467			(2,947		)	4,520
Reclassification adjustment for realized and unrealized (gains) losses included in net income	844			(214		)	630			(2,543		)	982			(1,561		)
	(8,104		)	2,054			(6,050		)	4,924			(1,965		)	2,959
Accumulated other comprehensive income (loss), end-of-period	$	(7,166	)	$	1,816		$	(5,350	)	$	8,248		$	(3,166	)	$	5,082