Shareholders’ Equity

At December 31, 2017 and 2016, ProAssurance had 100 million shares of authorized common stock and 50 million shares of authorized preferred stock. The Board has the authority to determine provisions for the issuance of preferred shares, including the number of shares to be issued, the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of such shares. To date, the Board has not approved the issuance of preferred stock.

The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2017, 2016 and 2015:



(In thousands)	2017	2016		2015
Issued and outstanding shares - January 1	53,251	53,101		56,534
Repurchase of shares, at cost of $2 million and $170 million for 2016 and 2015, respectively	—	(44	)	(3,680	)
Shares issued due to exercise of options and vesting of share-based compensation awards	132	108		150
Other shares issued for compensation and shares reissued to stock purchase plan*	74	86		97
Issued and outstanding shares - December 31	53,457	53,251		53,101
* Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue).

As of December 31, 2017, approximately 2.1 million of ProAssurance's authorized common shares were reserved by the Board for award or issuance under the incentive compensation plans described in Note 12 and an additional 0.6 million of authorized common shares were reserved for the issuance of currently outstanding restricted share and performance share unit awards.

ProAssurance declared cash dividends during 2017, 2016 and 2015 as follows:



	Cash Dividends Declared, per Share
	2017		2016		2015
First Quarter	$	0.31	$	0.31	$	0.31
Second Quarter	$	0.31	$	0.31	$	0.31
Third Quarter	$	0.31	$	0.31	$	0.31
Fourth Quarter*	$	5.00	$	5.00	$	1.31

* Includes special dividends of $4.69 per share in both 2017 and 2016 and $1.00 per share in 2015.

Quarterly dividends were paid in the month following the quarter in which they were declared. Dividends declared during 2017, 2016 and 2015 totaled $316.9 million, $315.0 million and $119.9 million, respectively.

ProAssurance's ability to pay dividends to its shareholders is limited by its holding company structure, to the extent of the net assets held by its insurance subsidiaries, as discussed in Note 17. Otherwise, there are no other regulatory restrictions on ProAssurance's retained earnings or net income that materially impact its ability to pay dividends. Based on shareholders' equity at December 31, 2017, total equity of $239.1 million was free of debt covenant restrictions regarding the payment of dividends. However, any decision to pay future cash dividends is subject to the Board’s final determination after a comprehensive review of financial performance, future expectations and other factors deemed relevant by the Board.

As of December 31, 2017, Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $109.6 million remained available for use. The timing and quantity of purchases depends upon market conditions and changes in ProAssurance's capital requirements and is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations as well as the rules of the NYSE.

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

For the years ended December 31, 2017, 2016 and 2015, OCI was primarily comprised of unrealized gains and losses, including non-credit impairment losses, arising during the period related to available-for-sale securities, less reclassification adjustments as shown in the table that follows, net of tax. For the year ended December 31, 2016, OCI included $1.0 million of unrecognized losses reclassified to earnings, net of tax, due to the termination of one of the defined benefit plans assumed in the Eastern acquisition. The remaining plan is frozen as to the earnings of additional benefits, and the unrecognized plan benefit liability is reestimated annually. For the year ended December 31, 2015, OCI included a loss of $1.0 million, net of tax, related to unrecognized changes from the reestimation of both the defined benefit plan liabilities.

At December 31, 2017 and 2016, AOCI was primarily comprised of unrealized gains and losses from available-for-sale securities, including accumulated non-credit impairments recognized through OCI of $0.5 million and $0.3 million, respectively, net of tax. During 2016, as discussed above, one of the defined benefit plans assumed in the Eastern acquisition was terminated and the related unrecognized losses were reclassified from AOCI to earnings (see following table). At December 31, 2017 and 2016, unrecognized changes in the remaining defined benefit plan liability were nominal in amount. All tax effects were computed using a 35% rate, with the exception of unrealized gains and losses on available for sale securities held at our U.K. and Cayman Island entities which were immaterial in amount.

Amounts reclassified from AOCI to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows:



(In thousands)	2017			2016			2015
Reclassifications from AOCI to net income:
Realized investment gains (losses)	$	2,512		$	2,417		$	(4,475	)
Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss	(3		)	(3,641		)	(2,279		)
Unrecognized losses in defined benefit plan liabilities reclassified to earnings, due to the termination and settlement of the plan	—			(1,500		)	—
Total gains (losses) reclassified, before-tax effect	2,509			(2,724		)	(6,754		)
Tax effect (at 35%)	(878		)	953			2,364
Net reclassification adjustments	$	1,631		$	(1,771	)	$	(4,390	)

Deferred tax expense (benefit) included in OCI	$	(4,676	)	$	(3,078	)	$	(18,370	)