SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

SHAREHOLDERS' EQUITY

11. SHAREHOLDERS' EQUITY

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. On March 15, 2021, the Company closed an underwritten public offering of 3,500,000 shares of its common stock at a price of $4.75 per share for gross proceeds of $16.6 million. The offering generated net proceeds to the Company of approximately $15.1 million, after deducting the underwriter’s discount and offering expenses payable by the Company. In April 2021, the Company sold an additional 100,650 shares upon partial exercise of the underwriter's overallotment option and received net proceeds of $0.4 million.

Share-Based Compensation Expense

Share-based compensation arrangements include the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
	(In thousands)
Restricted stock	$	211	$	344	$	871	$	1,066
Performance stock	—		42		85		128
Total share-based compensation expense	$	211	$	386	$	956	$	1,194
Recognized tax benefit	$	—	$	95	$	—	$	293
Intrinsic value of options exercised	2		106		2		110
Fair value of restricted stock vested	—		19		1,700		1,659

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

As of September 30, 2021, the Company had outstanding stock options exercisable for 20,332 shares of common stock at a weighted average exercise price of $4.40 per share. During the nine months ended September 30, 2021, no stock options were granted, 4,085 were exercised and 1,000 were canceled.

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 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.

During the nine months ended September 30, 2021 and 2020, the Board of Directors granted 171,576 and 210,272 RSAs, respectively, vesting over three or five years, to the Company’s directors, executives and other key employees. These RSA grants include performance-based RSAs, which reflect the number of shares that would vest based on achieving the "Target" level of performance (as opposed to "Threshold" or "Maximum" performance levels). The actual number of performance-based RSAs that will vest depend on the Company's achievement of specified performance criteria in the future.

RSA activity includes the following:

	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2021	375,728	$	14.32
Granted	171,576	4.63
Vested	(124,287)	13.68
Cancelled	(63,468)	15.06
Outstanding at September 30, 2021	359,549	$	9.79

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) associated with debt securities - available-for-sale consisted of the following:

	Three Months Ended September 30,
	2021						2020
	Before Tax		Income Tax		Net		Before Tax		Income Tax		Net
	(In thousands)
Accumulated other comprehensive income (loss), beginning-of-period	$	8,737	$	(3,664)	$	5,073	$	19,065	$	(4,675)	$	14,390
Other comprehensive income (loss) before reclassification	(1,304)		—		(1,304)		2,618		(642)		1,976
Reclassification adjustment for realized losses (gains) included in net income	(1,315)		(12)		(1,327)		(798)		195		(603)
	(2,619)		(12)		(2,631)		1,820		(447)		1,373
Accumulated other comprehensive income (loss), end-of-period	$	6,118	$	(3,676)	$	2,442	$	20,885	$	(5,122)	$	15,763

	Nine Months Ended September 30,
	2021						2020
	Before Tax		Income Tax		Net		Before Tax		Income Tax		Net
	(In thousands)
Accumulated other comprehensive income (loss), beginning-of-period	$	15,086	$	(3,700)	$	11,386	$	13,621	$	(3,340)	$	10,281
Other comprehensive income (loss) due to debt securities - held to maturity reclassified to available-for-sale	—		—		—		(58)		14		(44)
Other comprehensive income (loss) before reclassification	(7,507)		—		(7,507)		16,422		(4,027)		12,395
Reclassification adjustment for realized losses (gains) included in net income	(1,461)		24		(1,437)		(9,100)		2,231		(6,869)
	(8,968)		24		(8,944)		7,264		(1,782)		5,482
Accumulated other comprehensive income (loss), end-of-period	$	6,118	$	(3,676)	$	2,442	$	20,885	$	(5,122)	$	15,763