SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2022

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
	March 31,
	2022		2021
	(In thousands)
Restricted stock	$	196	$	322
Performance stock	—		85
Total share-based compensation expense	$	196	$	407
Recognized tax benefit	$	—	$	85
Intrinsic value of options exercised	—		—
Fair value of restricted stock vested	837		1,442

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 March 31, 2022, the Company had outstanding stock options exercisable for 19,832 shares of common stock at a weighted average exercise price of $4.40 per share. During the three months ended March 31, 2022 and 2021, no stock options were granted, exercised or 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 three months ended March 31, 2022 and 2021, the Board of Directors granted 0 and 171,576 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, 2022	343,683	$	9.98
Granted	—	—
Vested	(72,307)	11.57
Cancelled	(54,647)	10.13
Outstanding at March 31, 2022	216,729	$	9.41

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 March 31,
	2022						2021
	Before Tax		Income Tax		Net		Before Tax		Income Tax		Net
	(In thousands)
Accumulated other comprehensive income (loss), beginning-of-period	$	2,671	$	(3,705)	$	(1,034)	$	15,086	$	(3,700)	$	11,386
Other comprehensive income (loss) before reclassification	(16,050)		—		(16,050)		(9,397)		2,306		(7,091)
Reclassification adjustment for realized losses (gains) included in net income	14,496		25		14,521		(144)		35		(109)
	(1,554)		25		(1,529)		(9,541)		2,341		(7,200)
Accumulated other comprehensive income (loss), end-of-period	$	1,117	$	(3,680)	$	(2,563)	$	5,545	$	(1,359)	$	4,186