FedNat Holding (FNHCQ) 10-Q 6 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 06, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	FEDERATED NATIONAL HOLDING CO
Entity Central Index Key	1,069,996
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		13,826,654
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016

CONSOLIDATED BALANCE SHEETS (UN

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments:
Debt securities, available-for-sale, at fair value	$ 339,245	$ 339,178
Debt securities, held-to-maturity, at amortized cost	6,218	6,619
Equity securities, available-for-sale, at fair value	40,830	38,534
Total investments	386,293	384,331
Cash and cash equivalents	72,562	53,038
Prepaid reinsurance premiums	113,117	120,771
Premiums receivable, net of allowance of $123 and $302, respectively	48,232	38,594
Reinsurance recoverable, net	17,924	12,714
Deferred acquisition costs	15,764	15,547
Income taxes receivable	1,171	2,691
Property and equipment, net	3,236	2,894
Other assets	7,829	7,605
Total assets	666,128	638,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Loss and loss adjustment expense reserves	101,615	97,340
Unearned premiums	261,885	253,960
Debt from consolidated variable interest entity	4,893	4,887
Deferred income taxes, net	8,900	5,627
Other liabilities	27,645	25,612
Total liabilities	404,938	387,426
Preferred stock, $0.01 par value: 1,000,000 shares authorized	0	0
Common stock, $0.01 par value: 25,000,000 shares authorized; 13,826,654 and 13,798,773 shares issued and outstanding, respectively	138	138
Additional paid-in capital	132,928	131,998
Accumulated other comprehensive income	6,367	3,985
Retained earnings	103,354	96,461
Total shareholders' equity attributable to Federated National Holding Company shareholders	242,787	232,582
Noncontrolling interest	18,403	18,177
Total shareholders' equity	261,190	250,759
Total liabilities and shareholders' equity	$ 666,128	$ 638,185

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Premiums receivable, allowance for credit losses	$ 123	$ 302
LIABILITIES AND SHAREHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	25,000,000	25,000,000
Common stock, shares issued (in shares)	13,826,654	13,798,773
Common stock, shares outstanding (in shares)	13,826,654	13,798,773

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue:
Net premiums earned	$ 54,997	$ 44,786
Net investment income	2,040	1,546
Net realized investment gains	927	1,704
Other income	10,996	6,900
Total revenue	68,960	54,936
Costs and expenses:
Losses and loss adjustment expenses	29,545	23,949
Commissions and other underwriting expenses	19,852	12,694
General and administrative expenses	4,081	3,798
Interest expense	84	11
Total costs and expenses	53,562	40,452
Income before income taxes	15,398	14,484
Income taxes	5,795	5,711
Net income	9,603	8,773
Net income (loss) attributable to noncontrolling interest	68	(511)
Net income attributable to Federated National Holding Company shareholders	$ 9,535	$ 9,284
Net income per share attributable to Federated National Holding Company shareholders:
Basic (in dollars per share)	$ 0.69	$ 0.68
Diluted (in dollars per share)	$ 0.68	$ 0.66

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract]
Net income	$ 9,603	$ 8,773
Change in net unrealized gains on investments, available-for-sale	4,084	1,965
Comprehensive income before income taxes	13,687	10,738
Income tax expense related to items of other comprehensive income	(1,544)	(758)
Comprehensive income	12,143	9,980
Comprehensive income (loss) attributable to noncontrolling interest	226	(511)
Comprehensive income attributable to Federated National Holding Company shareholders	$ 11,917	$ 10,491

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income [Member]	Retained Earnings [Member]	Total Shareholders' Equity Attributable to Federated National Holding Company Shareholders [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2015	$ 0	$ 138	$ 131,998	$ 3,985	$ 96,461	$ 232,582	$ 18,177	$ 250,759
Balance (in shares) at Dec. 31, 2015		13,798,773
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	$ 0	0	0	9,535	9,535	68	9,603
Other comprehensive income	0	0	0	2,382	0	2,382	158	2,540
Dividends paid	0	0	0	0	(1,565)	(1,565)	0	(1,565)
Issuance of common stock for share-based awards	0	$ 0	4	0	0	4	0	4
Issuance of common stock for share-based awards (in shares)		80,481
Common stock buyback	0	$ 0	0	0	(1,077)	(1,077)	0	$ (1,077)
Common stock buyback (in shares)		(52,600)						(52,600)
Shares based compensation	0	$ 0	926	0	0	926	0	$ 926
Balance at Mar. 31, 2016	$ 0	$ 138	$ 132,928	$ 6,367	$ 103,354	$ 242,787	$ 18,403	$ 261,190
Balance (in shares) at Mar. 31, 2016		13,826,654

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flow from operating activities:
Net income	$ 9,603	$ 8,773
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Net realized investment gains	(927)	(1,704)
Amortization of investment premium or discount, net	1,313	1,253
Depreciation and amortization	187	152
Share-based compensation	926	1,282
Changes in operating assets and liabilities:
Prepaid reinsurance premiums	7,654	8,463
Premiums receivable, net	(9,638)	(2,535)
Reinsurance recoverable, net	(5,210)	(500)
Deferred acquisition costs	(217)	(2,156)
Income taxes receivable, net	1,274	(280)
Loss and loss adjustment expense reserves	4,275	6,145
Unearned premiums	7,925	11,009
Deferred income taxes, net of other comprehensive income	1,729	(202)
Other, net	1,809	(1,348)
Net cash provided by operating activities	20,703	28,352
Cash flow from investing activities:
Sales, maturities and redemptions of investment securities	72,669	56,264
Purchases of investment securities	(70,933)	(59,466)
Purchases of property and equipment	(523)	(122)
Net cash provided by (used in) investing activities	1,213	(3,324)
Cash flow from financing activities:
Noncontrolling interest equity investment	0	17,987
Tax benefit related to share-based compensation	246	530
Issuance of debt in consolidated variable interest entity	0	5,000
Purchases of FNHC common stock	(1,077)	0
Issuance of common stock for share-based awards	4	27
Dividends paid	(1,565)	(566)
Net cash (used in) provided by financing activities	(2,392)	22,978
Net increase in cash and cash equivalents	19,524	48,006
Cash and cash equivalents at beginning of period	53,038	40,157
Cash and cash equivalents at end of period	72,562	88,163
Cash paid during the period for:
Income taxes	2,300	5,662
Non-cash investing and finance activities:
Accrued dividends payable	$ 854	$ 567

ORGANIZATION AND BUSINESS

ORGANIZATION AND BUSINESS	3 Months Ended
	Mar. 31, 2016
ORGANIZATION AND BUSINESS [Abstract]
ORGANIZATION AND BUSINESS	(1) ORGANIZATION AND BUSINESS This report should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2015 of Federated National Holding Company (“FNHC”, “Company”, “we”, “us”). FNHC is an insurance holding company that controls substantially all steps in the insurance underwriting, distribution and claims processes through our subsidiaries and our contractual relationships with our independent agents and general agents. We are authorized to underwrite, and/or place through our wholly owned subsidiaries, homeowners’ multi-peril (“homeowners”), commercial general liability, federal flood, personal auto and other lines of insurance in Florida and other states. We market, distribute and service our own and third-party insurers’ products and our other services through a network of independent agents. Our wholly owned insurance subsidiary is Federated National Insurance Company (“FNIC”), which is licensed as an admitted carrier in Florida, Alabama, Louisiana and South Carolina. We also serve as managing general agent for Monarch National Insurance Company (“MNIC”), which was founded in 2015 through the joint venture, described below, and is licensed as an admitted carrier in Florida. An admitted carrier is an insurance company that has received a license from the state department of insurance giving the company the authority to write specific lines of insurance in that state. These companies are also bound by rate and form regulations, and are strictly regulated to protect policyholders from a variety of illegal and unethical practices, including fraud. Admitted carriers are also required to financially contribute to the state guarantee fund, which is used to pay for losses if an insurance carrier becomes insolvent or unable to pay the losses due their policyholders. Monarch National Insurance Company Joint Venture On March 19, 2015, the Company entered into a joint venture to organize MNIC, which received its certificate of authority to write homeowners’ property and casualty insurance in Florida from the Florida Office of Insurance Regulation (the “Florida OIR”). The Company’s joint venture partners are a majority-owned limited partnership of Crosswinds Holdings Inc., a publicly traded Canadian private equity firm and asset manager (“Crosswinds”); and Transatlantic Reinsurance Company (“TransRe”). The Company and Crosswinds each invested $14.0 million in Monarch Delaware Holdings LLC (“Monarch Delaware”), the indirect parent company of MNIC, for a 42.4% interest in Monarch Delaware (each holding 50% of the voting interests in Monarch Delaware). TransRe invested $5.0 million for a 15.2% non-voting interest in Monarch Delaware and advanced an additional $5.0 million in debt evidenced by a six-year promissory note bearing 6% annual interest payable by Monarch National Holding Company (“MNHC”), a wholly owned subsidiary of Monarch Delaware and the direct parent company of MNIC.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES	3 Months Ended
	Mar. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES	(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (a) BASIS OF PRESENTATION The financial statements contained in this Quarterly Report on Form 10-Q are unaudited, but reflect all adjustments that, in the opinion of management, are necessary for a fair statement of results of the interim periods covered thereby. The accompanying unaudited consolidated financial statements are prepared in accordance with US generally accepted accounting principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below. The results of operations for any interim period are not necessarily indicative of results for the full year. (b) PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of FNHC and all other entities in which we have a controlling financial interest and any variable interest entities (“VIE”) in which we are the primary beneficiary. All material inter-company accounts and transactions have been eliminated in consolidation. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements. In connection with the investment in Monarch Delaware, we have determined that we are the primary beneficiary of this VIE, as we possess both the power to direct the activities of the VIE that most significantly impact its economic performance. Accordingly, we consolidate the VIE in our consolidated financial statements. Refer to note 12 for additional information on the VIE. (c) ACCOUNTING ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates. Similar to other property and casualty insurers, our liability for loss and loss adjustment expense reserves, although supported by actuarial projections and other data is ultimately based on management's reasoned expectations of future events. Although considerable variability is inherent in these estimates, we believe that this liability is adequate. Estimates are reviewed regularly and adjusted as necessary. Such adjustments are reflected in current operations. (d) RECLASSIFICATIONS Certain amounts in prior year’s consolidated financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no effect on the reported results of operations, financial condition, and cash flows. In the current period, the Company concluded it was appropriate to reclassify certain revenue accounts that do not have material balances and include them within other income in the consolidated statements of operations. In addition, during the current period, the Company reclassified certain costs and expenses, principally, operating and underwriting expenses, salaries and wages and amortization of deferred policy acquisition costs. These respective account balances are now included in commissions and other underwriting expenses and general and administrative expenses in the consolidated statements of operations. The Company believes this reclassification provide greater clarity and insight into the consolidated financial statements for the periods presented. (e) ADJUSTMENTS During our third quarter 2015 analysis of actual experience to date under the July 1, 2014 quota share reinsurance contract, we re-evaluated the accounting treatment for quota share reinsurance contracts with retrospective rating provisions. As a result of this re-evaluation, we concluded reinsurance contracts which have retrospective rating provisions should be accounted for under Accounting Standards Codification 944, Financial Services — Insurance The adjustments to our accounting for the July 1, 2014 quota share reinsurance treaty, inclusive of other adjustments, are not material in any prior quarter or annual period based on an analysis of quantitative and qualitative factors in accordance with SEC guidance. As a result, we recorded these adjustments during the year ended December 31, 2015. The prior period adjustments increased net income by $1.3 million for the three months ended March 31, 2015. (f) RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosures about Short-Duration-Contracts Financial Services—Insurance In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

FAIR VALUE

FAIR VALUE	3 Months Ended
	Mar. 31, 2016
FAIR VALUE [Abstract]
FAIR VALUE	(3) FAIR VALUE Fair value measurements are generally based upon observable and unobservable inputs. Observable inputs are based on market data from independent sources, while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. All assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market is defined as a market where transactions for the financial statement occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Quoted market prices for similar assets or liabilities and valuations, using models or other valuation techniques that use observable market data. All significant inputs are observable, or derived from observable information in the marketplace, or are supported by observable levels at which transactions are executed in the market place. Level 3 — Instruments that use non-binding broker quotes or model driven valuations that do not have observable market data or those that are estimated based on an ownership interest to which a proportionate share of net assets is attributed. Currently, the Company has no level 3 investments. The Company’s financial instruments measured at fair value and the level of the fair value hierarchy of inputs used were as follows: March 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Debt securities: United States government obligations and authorities $ 26,578 $ 26,895 $ - $ 53,473 Obligations of states and political subdivisions - 124,310 - 124,310 Corporate - 148,926 - 148,926 International - 12,536 - 12,536 26,578 312,667 - 339,245 Equity securities 38,302 2,528 - 40,830 Total investments $ 64,880 $ 315,195 $ - $ 380,075 December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Debt securities: United States government obligations and authorities $ 34,733 $ 26,820 $ - $ 61,553 Obligations of states and political subdivisions - 110,702 - 110,702 Corporate - 154,620 - 154,620 International - 12,303 - 12,303 34,733 304,445 - 339,178 Equity securities 38,012 522 - 38,534 Total investments $ 72,745 $ 304,967 $ - $ 377,712

INVESTMENTS

INVESTMENTS	3 Months Ended
	Mar. 31, 2016
INVESTMENTS [Abstract]
INVESTMENTS	(4) INVESTMENTS Unrealized Gains and Losses The amortized cost and the fair value of debt and equity securities as of March 31, 2016 and December 31, 2015 are summarized as follows: Amortized Cost or Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) March 31, 2016 Debt Securities - available-for-sale: United States government obligations and authorities $ 52,406 $ 1,075 $ 8 $ 53,473 Obligations of states and political subdivisions 122,143 2,206 39 124,310 Corporate 146,571 2,854 499 148,926 International 12,448 176 88 12,536 333,568 6,311 634 339,245 Debt Securities - held-to-maturity: United States government obligations and authorities 4,238 65 82 4,221 Corporate 1,849 33 6 1,876 International 131 4 - 135 6,218 102 88 6,232 Equity securities 36,312 6,297 1,779 40,830 Total investments $ 376,098 $ 12,710 $ 2,501 $ 386,307 Amortized Cost or Gross Unrealized Gross Unrealized Fair Value (in thousands) December 31, 2015 Debt Securities - available-for-sale: United States government obligations and authorities $ 61,384 $ 489 $ 320 $ 61,553 Obligations of states and political subdivisions 109,152 1,590 40 110,702 Corporate 154,957 1,153 1,490 154,620 International 12,528 18 243 12,303 338,021 3,250 2,093 339,178 Debt Securities - held-to-maturity: United States government obligations and authorities 4,275 30 204 4,101 Corporate 2,253 14 20 2,247 International 91 - - 91 6,619 44 224 6,439 Equity securities 33,581 6,809 1,856 38,534 Total investments $ 378,221 $ 10,103 $ 4,173 $ 384,151 Contractual Maturity The amortized cost and estimated fair value of debt securities as of March 31, 2016 and December 31, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2016 December 31, 2015 Securities with maturity dates: Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) Debt securities, available-for-sale: One year or less $ 30,152 $ 30,177 $ 24,470 $ 24,488 Over one through five years 173,698 175,777 170,797 171,113 Over five through ten years 129,692 133,258 142,728 143,545 Over ten years 26 33 26 32 333,568 339,245 338,021 339,178 Debt securities, held-to-maturity: One year or less 478 480 486 487 Over one through five years 1,927 1,976 1,899 1,915 Over five through ten years 3,813 3,776 4,234 4,037 6,218 6,232 6,619 6,439 Total $ 339,786 $ 345,477 $ 344,640 $ 345,617 Net Investment Income Net investment income was as follows: Three Months Ended March 31, 2016 2015 (in thousands) Interest income $ 1,853 $ 1,440 Dividends income 187 106 Net investment income $ 2,040 $ 1,546 Net Realized Gains and Losses The amount of gross realized gains and losses were as follows: Three Months Ended March 31, 2016 2015 (in thousands) Gross realized gains: Debt securities $ 1,304 $ 515 Equity securities 738 1,395 Total gross realized gains 2,042 1,910 Gross realized losses: Debt securities (540 ) (103 ) Equity securities (575 ) (103 ) Total gross realized losses (1,115 ) (206 ) Net realized gains on investments $ 927 $ 1,704 During the three months ended March 31, 2016 and 2015, the proceeds from sales of available-for-sale investment securities were $66.7 million and $53.5 million, respectively. Aging of Gross Unrealized Losses As of March 31, 2016 and December 31, 2015, gross unrealized losses and related fair values for debt and equity securities, grouped by duration of time in a continuous unrealized loss position, were as follows: Less than 12 months 12 months or longer Total March 31, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Debt securities: United States government obligations and authorities $ 1,058 $ 2 $ 660 $ 6 $ 1,718 $ 8 Obligations of states and political subdivisions 15,750 38 1,032 1 16,782 39 Corporate 31,204 466 2,935 33 34,139 499 International 2,092 60 603 28 2,695 88 50,104 566 5,230 68 55,334 634 Equity securities 10,905 1,777 25 2 10,930 1,779 Total investments $ 61,009 $ 2,343 $ 5,255 $ 70 $ 66,264 $ 2,413 Less than 12 months 12 months or longer Total December 31, 2015 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Debt securities: United States government obligations and authorities $ 30,464 $ 303 $ 659 $ 17 $ 31,123 $ 320 Obligations of states and political subdivisions 16,652 40 - - 16,652 40 Corporate 87,176 1,420 3,590 70 90,766 1,490 International 8,660 191 281 52 8,941 243 142,952 1,954 4,530 139 147,482 2,093 Equity securities 11,790 1,850 84 6 11,874 1,856 Total investments $ 154,742 $ 3,804 $ 4,614 $ 145 $ 159,356 $ 3,949 The Company holds its equity and debt securities as available-for-sale and as such, these securities are recorded at fair value. The Company continually monitors the difference between cost and the estimated fair value of its investments, which involves uncertainty as to whether declines in value are temporary in nature. If the decline of a particular investment is deemed temporary, the Company records the decline as an unrealized loss in shareholders’ equity. If the decline is deemed to be other than temporary, the Company writes its cost-basis or amortized cost-basis down to the fair value of the investment and records an other than temporarily impaired ("OTTI") loss on its statement of operations. In addition, any portion of such decline related to debt securities that is believed to arise from factors other than credit is recorded as a component of other comprehensive income rather than charged against income. The Company’s assessment of equity securities initially involves an evaluation of all securities that are in an unrealized loss position, regardless of the duration or severity of the loss, as of the applicable balance sheet date. Such initial review consists primarily of assessing whether: (i) there has been a negative credit or news event with respect to the issuer that could indicate the existence of an OTTI; and (ii) the Company has the ability and intent to hold an equity security for a period of time sufficient to allow for an anticipated recovery (generally considered to be one year from the balance sheet date). To the extent that an equity security in an unrealized loss position is not impaired based on the initial review described above, the Company then further evaluates such equity security by considering qualitative and quantitative factors, including facts and circumstances specific to individual securities, asset classes, the financial condition of the issuer, changes in dividend payment, the length of time fair value had been less than cost, the severity of the decline in fair value below cost, industry outlook and our ability and intent to hold each position until its forecasted recovery. If the Company intends to sell, or it is more likely than not that, the Company will sell, a debt security before recovery of its amortized cost basis, the total amount of the unrealized loss position is recognized as an OTTI loss in income. To the extent that a debt security that is in an unrealized loss position is not impaired based on the preceding, the Company will consider a debt security to be impaired when it believes it to be probable that the Company will not be able to collect the entire amortized cost basis. During the three months ended March 31, 2016 and 2015, we did not have any material OTTI losses. Collateral Deposits As of March 31, 2016, investments with fair values of approximately $12.0 million, the majority of which were debt securities, were deposited with governmental authorities and into custodial bank accounts as required by law or contractually obligated.

REINSURANCE

REINSURANCE	3 Months Ended
	Mar. 31, 2016
REINSURANCE [Abstract]
REINSURANCE	(5) REINSURANCE Overview The Company reinsures (cedes) a portion of written premiums on an excess of loss or a quota share basis to nonaffiliated insurance companies in order to limit our loss exposure. To the extent that reinsuring companies are unable to meet their obligations assumed under these reinsurance agreements, we remain primarily liable to our policyholders. Reinsurance Recoverables Amounts recoverable from reinsurers are recognized in a manner consistent with the claims liabilities associated with the reinsurance placement and presented on the balance sheet as reinsurance recoverables. The following reinsurance recoverable is reflected in the consolidated balance sheets as of the dates presented as follows: March 31, 2016 December 31, 2015 (in thousands) Reinsurance recoverable on paid losses $ 6,767 $ 5,218 Reinsurance recoverable on unpaid losses 11,157 7,496 Reinsurance recoverable, net $ 17,924 $ 12,714 Premiums Written and Earned The following table indicates premiums written and earned as follows: Three Months Ended March 31, 2016 2015 (in thousands) Premiums written: Direct $ 136,025 $ 106,702 Ceded (43,570 ) (25,958 ) $ 92,455 $ 80,744 Premiums earned: Direct $ 128,099 $ 95,693 Ceded (73,102 ) (50,907 ) $ 54,997 $ 44,786 Significant Reinsurance Contracts FNIC operates primarily by underwriting and accepting risks for their direct account on a gross basis and reinsuring a portion of the exposure on either an individual risk or an aggregate basis to the extent those exceed the desired retention level. We continually evaluate the relative attractiveness of different forms of reinsurance contracts and different markets that may be used to achieve our risk and profitability objectives. MNIC does not have any material reinsurance contracts as of March 31, 2016. All of our reinsurance contracts do not relieve FNIC from their direct obligations to insured. The Company’s reinsurance program, which runs either from June 1 to May 31 or from July 1 to June 30 of the following year, consists of excess of loss placed with the private market and the Florida Hurricane Catastrophe Fund (“FHCF”) and quota share, which is a form of proportional reinsurance, treaties which insure the homeowners’ property lines from catastrophes in Florida and other states. The excess of loss and FHCF treaties, which became effective on July 1, 2015, insures for approximately $1.82 billion of aggregate catastrophic losses and loss adjustment expenses (“LAE”) with a maximum single event coverage totaling approximately $1.26 billion, with the Company retaining the first $12.9 million in Florida and $5.0 million in Louisiana, Alabama and South Carolina for losses and LAE from each event. The FHCF treaty only affords coverage for losses sustained in Florida and represents only a portion of the reinsurance coverage in Florida. The Company’s quota share treaties, which are included in the reinsurance program, runs from July 1 to June 30 of the following year. The quota share treaties consist of two different treaties, one for 30% which became effective July 1, 2014 and the other for 10% which became effective July 1, 2015. The combined treaties provide a 40% quota share reinsurance treaty on the first $100 million of covered losses for the homeowners’ insurance program in Florida. The treaties are accounted for as retrospectively rated contracts whereby the estimated ultimate premium or commission is recognized over the period of the contracts. The quota share reinsurance agreements require FNIC to secure the credit, regulatory and business risk. Fully funded trust agreements securing these risks totaled $3.5 million, as of March 31, 2016 and December 31, 2015.

LOSS AND LAE RESERVES

LOSS AND LAE RESERVES	3 Months Ended
	Mar. 31, 2016
LOSS AND LAE RESERVES [Abstract]
LOSS AND LAE RESERVES	(6) LOSS AND LAE RESERVES The liability for loss and LAE reserves is determined on an individual-case basis for all incidents reported. The liability also includes amounts for unallocated expenses, anticipated future claim development and IBNR. Activity in the liability for loss and LAE reserves is summarized as follows: Three Months Ended March 31, 2016 Year Ended December 31, 2015 (in thousands) Gross reserves, beginning of period $ 97,340 $ 78,330 Less: reinsurance recoverable (1) (7,496 ) (10,394 ) Net reserves, beginning of period 89,844 67,936 Incurred loss, net of reinsurance, related to: Current year 30,093 113,819 Prior years (548 ) (9,466 ) Total incurred loss and LAE, net of reinsurance 29,545 104,353 Paid loss, net of reinsurance, related to: Current year 9,221 49,531 Prior years 19,710 32,914 Total paid loss and LAE, net of reinsurance 28,931 82,445 Net reserves, end of period 90,458 89,844 Plus: reinsurance recoverable (1) 11,157 7,496 Gross reserves, end of period $ 101,615 $ 97,340 (1) Reinsurance recoverable in this table includes only ceded loss and LAE reserves. The favorable development in 2015 and first quarter of 2016 is primarily a result of continued favorable loss experience (mostly caused by decreased severity in reported claims) in the Company’s all other peril homeowners coverage caused in part by the absence of severe weather in Florida. Specifically, we have experienced better severity than expected on the 2014 and 2013 accident years.

DEBT

DEBT	3 Months Ended
	Mar. 31, 2016
DEBT [Abstract]
DEBT	(7) DEBT On March 17, 2015, MNHC, a wholly owned subsidiary of Monarch Delaware, our consolidated VIE, issued a promissory note with a principal amount of $5.0 million bearing 6% annual interest, due March 17, 2021 with interest payable on an annual basis due March 17 each year. The debt was issued to TransRe, a related party, and is being carried at the unpaid principal balance, net of debt issuance costs, and any accrued and unpaid interest is recognized in other liabilities in the consolidated balance sheet. The Company recorded $0.1 million of debt issuance costs related to the 6% promissory note.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2016
INCOME TAXES [Abstract]
INCOME TAXES	(8) INCOME TAXES A summary of the provision for income tax expense is as follows. Three Months Ended March 31, 2016 2015 (in thousands) Federal: Current $ 3,544 $ 4,652 Deferred 1,439 259 Federal income tax expense 4,983 4,911 State: Current 276 731 Deferred 536 69 State income tax expense 812 800 Total income taxes $ 5,795 $ 5,711 The actual income tax expense differs from the "expected" income tax expense (computed by applying the combined applicable effective federal and state tax rates to income before income tax expense as follows: Three Months Ended March 31, 2016 2015 (in thousands) Computed expected tax expense provision, at federal rate $ 5,389 $ 5,248 State tax, net of federal tax benefit 534 543 Other (128 ) (80 ) Total income taxes $ 5,795 $ 5,711 The Company files a federal income tax return and various state and local tax returns. The Company’s consolidated federal and state income tax returns for 2012 - 2014 are open for review by the Internal Revenue Service (“IRS”) and other state taxing authorities. As of March 31, 2016 and December 31, 2015, we have determined that there are no uncertain tax positions.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2016
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	(9) COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of conducting business, the Company is involved in various legal proceedings, specifically claims litigation. The Company’s insurance subsidiaries participate in most of these proceedings by either defending third-party claims brought against insureds or litigating first-party coverage claims. The Company accounts for such activity through the establishment of loss and loss adjustment expense reserves. We believe that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, is immaterial to our consolidated financial statements. The Company is also occasionally involved in other legal and regulatory proceedings, some of which may assert claims for substantial amounts. These other legal proceedings may occasionally make us party to individual actions in which extra-contractual damages, punitive damages or penalties are sought, such as claims alleging bad faith in the handling of insurance claims. On a quarterly basis, the Company reviews these outstanding matters, if any. Consistent with GAAP, the Company establishes accruals when it is probable that a loss has been incurred and the Company can reasonably estimate its potential exposure. We record for such probable and estimable losses, if any, through the establishment of legal expense reserves. Based on our quarterly review, the Company believes that our accruals for probable and estimable losses are reasonable and that the amounts accrued do not have a material effect on our consolidated financial statements. Assessment Related Activity We operate in a regulatory environment where certain entities and organizations have the authority to require us to participate in assessments. Currently these entities and organizations include, but are not limited to, Florida Insurance Guaranty Association (“FIGA”), Citizens Property Insurance Corporation (“Citizens”), FHCF and Florida Joint Underwriters Insurance Association (“JUA”). As a direct premium writer in the state of Florida, we are required to participate in certain insurer solvency associations under Florida Statutes Section 631.57(3) (a), administered by FIGA. Future assessments are likely, although the impact of these assessments on our balance sheet, results of operations or cash flow are undeterminable at this time. FNIC is also required to participate in an insurance apportionment plan under Florida Statutes Section 627.351, which is referred to as a JUA Plan. The JUA Plan provides for the equitable apportionment of any profits realized, or losses and expenses incurred, among participating automobile insurers. In the event of an underwriting deficit incurred by the JUA Plan which is not recovered through the policyholders in the JUA Plan, such deficit shall be recovered from the companies participating in the JUA Plan in the proportion that the net direct written premiums of each such member during the preceding calendar year bear to the aggregate net direct premiums written in this state by all members of the JUA Plan. FNIC was not assessed by the JUA Plan. Future assessments by this association are undeterminable at this time.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2016
SHAREHOLDERS' EQUITY [Abstract]
SHAREHOLDERS' EQUITY	(10) SHAREHOLDERS’ EQUITY Common Stock Repurchases In March 2016, our Board of Directors authorized a program to repurchase shares of common stock of FNHC, at such times and at prices as management determines advisable, up to an aggregate of $10.0 million through March 31, 2017. Pursuant to our Board of Directors authorizations, the Company repurchased 52,600 shares of its common stock at a total cost of $1.1 million, which is an average price per share of $20.44, during the three months ended March 31, 2016. Share-based Compensation Expense The following table provides certain information in connection with the Company’s share-based compensation arrangements as follows: Three months ended March 31, 2016 2015 (in thousands) Restricted stock $ 680 $ 728 Stock options - 24 Total share-based compensation expense $ 680 $ 752 Excess tax benefits from stock-based awards $ 246 $ 530 Intrinsic value of options exercised $ 193 $ 2,346 Fair value of restricted stock vested $ 12,358 $ 17,387 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. The unamortized share-based compensation expense is $8.7 million as of March 31, 2016, which will be recognized over the remaining weighted average vesting period of approximately 3.23 years. Stock Option Awards A summary of the Company’s stock option activity for the period from January 1, 2016 to March 31, 2016 is as follows: Number of Shares Weighted Average Option Exercise Price Outstanding at January 1, 2016 174,633 $ 3.79 Granted - $ - Exercised (1,100 ) $ 4.20 Cancelled - $ - Outstanding at March 31, 2016 173,533 $ 3.78 Restricted Stock On March 10, 2016, the Company’s Board of Directors granted 128,472 restricted shares to the Company’s Directors, Executives and other key employees. The restricted shares vest over three or five years. A summary of the Company’s restricted stock activity for the period from January 1, 2016 to March 31, 2016 is as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding at January 1, 2016 418,807 $ 20.14 Granted 128,472 $ 19.16 Vested (79,381 ) $ 15.57 Cancelled - $ - Outstanding at March 31, 2016 467,898 $ 20.64 The weighted average grant date fair value is measured at the closing price of FNHC common stock on the grant date, as reported on The NASDAQ Global Market. Accumulated Other Comprehensive Income The following table presents a reconciliation of the changes in accumulated other comprehensive income during the three months ended March 31, 2016 and 2015: Three Months Ended March 31, 2016 2015 Before Tax Income Tax Net Before Tax Income Tax Net (in thousands) Accumulated other comprehensive income, beginning of period $ 6,111 $ (2,247 ) $ 3,864 $ 12,417 $ (4,699 ) $ 7,718 Other comprehensive income before reclassifications 5,570 (2,103 ) 3,467 4,717 (1,806 ) 2,911 Reclassification adjustment for realized gains included in net income (1,486 ) 559 (927 ) (2,752 ) 1,048 (1,704 ) 4,084 (1,544 ) 2,540 1,965 (758 ) 1,207 Accumulated other comprehensive income, end of period $ 10,195 $ (3,791 ) $ 6,404 $ 14,382 $ (5,457 ) $ 8,925

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2016
EARNINGS PER SHARE [Abstract]
EARNINGS PER SHARE	(11) EARNINGS PER SHARE The following table illustrates our computations of basic and diluted net income per share. Three Months Ended March 31, 2016 2015 (in thousands, except per share data) Net income attributable to Federated National Holding Company shareholders $ 9,535 $ 9,284 Weighted average number of common shares outstanding - basic 13,826 13,656 Net income per share - basic $ 0.69 $ 0.68 Weighted average number of common shares outstanding - basic 13,826 13,656 Dilutive effect of stock compensation plans $ 218 $ 320 Weighted average number of common shares outstanding - diluted 14,044 13,976 Net income per share - diluted $ 0.68 $ 0.66 Dividends per share $ 0.05 $ 0.04

VARIABLE INTEREST ENTITY

VARIABLE INTEREST ENTITY	3 Months Ended
	Mar. 31, 2016
Variable Interest Entity [Abstract]
VARIABLE INTEREST ENTITY	(12) VARIABLE INTEREST ENTITY The carrying amounts of the assets of Monarch Delaware, our consolidated VIE, which can only be used to settle obligations of Monarch Delaware, and liabilities of Monarch Delaware for which creditors do not have recourse are as follows: March 31, 2016 December 31, 2015 ASSETS (in thousands) Investments Debt maturities, held-to-maturity, at amortized cost $ 19,836 $ 21,312 Equity securities, available-for-sale, at fair value 3,151 1,358 Total investments 22,987 22,670 Cash and cash equivalents 14,990 14,616 Prepaid reinsurance premiums 14 34 Premiums receivable, net 344 355 Deferred income taxes 5 646 Income taxes receivable 395 - Deferred acquisition costs 237 234 Other assets 156 157 Total assets $ 39,128 $ 38,712 LIABILITIES Loss and loss adjustment expense reserves $ 324 $ 237 Unearned premiums 1,572 1,448 Debt 4,893 4,887 Income taxes payable - 8 Other liabilities 187 374 Total liabilities $ 6,976 $ 6,954

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2016
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	(13) SUBSEQUENT EVENTS MNIC applied for and was approved by the Florida OIR for a rate decrease of 11.9% for Florida homeowners’ multiple-peril insurance policies, which became effective for new and renewals on April 15, 2016. Additionally, FNIC applied for and was approved by the Florida OIR for a rate increase of 5.6% for Florida homeowners’ multiple-peril insurance policies, which will become effective for new and renewals on August 1, 2016.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies)	3 Months Ended
	Mar. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES [Abstract]
BASIS OF PRESENTATION	(a) BASIS OF PRESENTATION The financial statements contained in this Quarterly Report on Form 10-Q are unaudited, but reflect all adjustments that, in the opinion of management, are necessary for a fair statement of results of the interim periods covered thereby. The accompanying unaudited consolidated financial statements are prepared in accordance with US generally accepted accounting principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below. The results of operations for any interim period are not necessarily indicative of results for the full year.
PRINCIPLES OF CONSOLIDATION	(b) PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of FNHC and all other entities in which we have a controlling financial interest and any variable interest entities (“VIE”) in which we are the primary beneficiary. All material inter-company accounts and transactions have been eliminated in consolidation. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements. In connection with the investment in Monarch Delaware, we have determined that we are the primary beneficiary of this VIE, as we possess both the power to direct the activities of the VIE that most significantly impact its economic performance. Accordingly, we consolidate the VIE in our consolidated financial statements. Refer to note 12 for additional information on the VIE.
ACCOUNTING ESTIMATES AND ASSUMPTIONS	(c) ACCOUNTING ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates. Similar to other property and casualty insurers, our liability for loss and loss adjustment expense reserves, although supported by actuarial projections and other data is ultimately based on management's reasoned expectations of future events. Although considerable variability is inherent in these estimates, we believe that this liability is adequate. Estimates are reviewed regularly and adjusted as necessary. Such adjustments are reflected in current operations.
RECLASSIFICATIONS	(d) RECLASSIFICATIONS Certain amounts in prior year’s consolidated financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no effect on the reported results of operations, financial condition, and cash flows. In the current period, the Company concluded it was appropriate to reclassify certain revenue accounts that do not have material balances and include them within other income in the consolidated statements of operations. In addition, during the current period, the Company reclassified certain costs and expenses, principally, operating and underwriting expenses, salaries and wages and amortization of deferred policy acquisition costs. These respective account balances are now included in commissions and other underwriting expenses and general and administrative expenses in the consolidated statements of operations. The Company believes this reclassification provide greater clarity and insight into the consolidated financial statements for the periods presented.
ADJUSTMENTS	(e) ADJUSTMENTS During our third quarter 2015 analysis of actual experience to date under the July 1, 2014 quota share reinsurance contract, we re-evaluated the accounting treatment for quota share reinsurance contracts with retrospective rating provisions. As a result of this re-evaluation, we concluded reinsurance contracts which have retrospective rating provisions should be accounted for under Accounting Standards Codification 944, Financial Services — Insurance The adjustments to our accounting for the July 1, 2014 quota share reinsurance treaty, inclusive of other adjustments, are not material in any prior quarter or annual period based on an analysis of quantitative and qualitative factors in accordance with SEC guidance. As a result, we recorded these adjustments during the year ended December 31, 2015. The prior period adjustments increased net income by $1.3 million for the three months ended March 31, 2015.
RECENT ACCOUNTING PRONOUNCEMENTS	(f) RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosures about Short-Duration-Contracts Financial Services—Insurance In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

FAIR VALUE (Tables)

FAIR VALUE (Tables)	3 Months Ended
	Mar. 31, 2016
FAIR VALUE [Abstract]
Assets Measured at Fair Value on a Recurring Basis	The Company’s financial instruments measured at fair value and the level of the fair value hierarchy of inputs used were as follows: March 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Debt securities: United States government obligations and authorities $ 26,578 $ 26,895 $ - $ 53,473 Obligations of states and political subdivisions - 124,310 - 124,310 Corporate - 148,926 - 148,926 International - 12,536 - 12,536 26,578 312,667 - 339,245 Equity securities 38,302 2,528 - 40,830 Total investments $ 64,880 $ 315,195 $ - $ 380,075 December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Debt securities: United States government obligations and authorities $ 34,733 $ 26,820 $ - $ 61,553 Obligations of states and political subdivisions - 110,702 - 110,702 Corporate - 154,620 - 154,620 International - 12,303 - 12,303 34,733 304,445 - 339,178 Equity securities 38,012 522 - 38,534 Total investments $ 72,745 $ 304,967 $ - $ 377,712

INVESTMENTS (Tables)

INVESTMENTS (Tables)	3 Months Ended
	Mar. 31, 2016
INVESTMENTS [Abstract]
Summary of Amortized Cost and Fair Value of Debt and Equity Securities	The amortized cost and the fair value of debt and equity securities as of March 31, 2016 and December 31, 2015 are summarized as follows: Amortized Cost or Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) March 31, 2016 Debt Securities - available-for-sale: United States government obligations and authorities $ 52,406 $ 1,075 $ 8 $ 53,473 Obligations of states and political subdivisions 122,143 2,206 39 124,310 Corporate 146,571 2,854 499 148,926 International 12,448 176 88 12,536 333,568 6,311 634 339,245 Debt Securities - held-to-maturity: United States government obligations and authorities 4,238 65 82 4,221 Corporate 1,849 33 6 1,876 International 131 4 - 135 6,218 102 88 6,232 Equity securities 36,312 6,297 1,779 40,830 Total investments $ 376,098 $ 12,710 $ 2,501 $ 386,307 Amortized Cost or Gross Unrealized Gross Unrealized Fair Value (in thousands) December 31, 2015 Debt Securities - available-for-sale: United States government obligations and authorities $ 61,384 $ 489 $ 320 $ 61,553 Obligations of states and political subdivisions 109,152 1,590 40 110,702 Corporate 154,957 1,153 1,490 154,620 International 12,528 18 243 12,303 338,021 3,250 2,093 339,178 Debt Securities - held-to-maturity: United States government obligations and authorities 4,275 30 204 4,101 Corporate 2,253 14 20 2,247 International 91 - - 91 6,619 44 224 6,439 Equity securities 33,581 6,809 1,856 38,534 Total investments $ 378,221 $ 10,103 $ 4,173 $ 384,151
Summary of Debt Securities, Contractual Maturity	The amortized cost and estimated fair value of debt securities as of March 31, 2016 and December 31, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2016 December 31, 2015 Securities with maturity dates: Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) Debt securities, available-for-sale: One year or less $ 30,152 $ 30,177 $ 24,470 $ 24,488 Over one through five years 173,698 175,777 170,797 171,113 Over five through ten years 129,692 133,258 142,728 143,545 Over ten years 26 33 26 32 333,568 339,245 338,021 339,178 Debt securities, held-to-maturity: One year or less 478 480 486 487 Over one through five years 1,927 1,976 1,899 1,915 Over five through ten years 3,813 3,776 4,234 4,037 6,218 6,232 6,619 6,439 Total $ 339,786 $ 345,477 $ 344,640 $ 345,617
Net Investment Income	Net investment income was as follows: Three Months Ended March 31, 2016 2015 (in thousands) Interest income $ 1,853 $ 1,440 Dividends income 187 106 Net investment income $ 2,040 $ 1,546
Net Realized Gains and Losses	The amount of gross realized gains and losses were as follows: Three Months Ended March 31, 2016 2015 (in thousands) Gross realized gains: Debt securities $ 1,304 $ 515 Equity securities 738 1,395 Total gross realized gains 2,042 1,910 Gross realized losses: Debt securities (540 ) (103 ) Equity securities (575 ) (103 ) Total gross realized losses (1,115 ) (206 ) Net realized gains on investments $ 927 $ 1,704
Gross Unrealized Losses and Fair Values for Debt and Equity Securities in Continuous Unrealized Loss Position	As of March 31, 2016 and December 31, 2015, gross unrealized losses and related fair values for debt and equity securities, grouped by duration of time in a continuous unrealized loss position, were as follows: Less than 12 months 12 months or longer Total March 31, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Debt securities: United States government obligations and authorities $ 1,058 $ 2 $ 660 $ 6 $ 1,718 $ 8 Obligations of states and political subdivisions 15,750 38 1,032 1 16,782 39 Corporate 31,204 466 2,935 33 34,139 499 International 2,092 60 603 28 2,695 88 50,104 566 5,230 68 55,334 634 Equity securities 10,905 1,777 25 2 10,930 1,779 Total investments $ 61,009 $ 2,343 $ 5,255 $ 70 $ 66,264 $ 2,413 Less than 12 months 12 months or longer Total December 31, 2015 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in thousands) Debt securities: United States government obligations and authorities $ 30,464 $ 303 $ 659 $ 17 $ 31,123 $ 320 Obligations of states and political subdivisions 16,652 40 - - 16,652 40 Corporate 87,176 1,420 3,590 70 90,766 1,490 International 8,660 191 281 52 8,941 243 142,952 1,954 4,530 139 147,482 2,093 Equity securities 11,790 1,850 84 6 11,874 1,856 Total investments $ 154,742 $ 3,804 $ 4,614 $ 145 $ 159,356 $ 3,949

REINSURANCE (Tables)

REINSURANCE (Tables)	3 Months Ended
	Mar. 31, 2016
REINSURANCE [Abstract]
Reinsurance Recoverables	The following reinsurance recoverable is reflected in the consolidated balance sheets as of the dates presented as follows: March 31, 2016 December 31, 2015 (in thousands) Reinsurance recoverable on paid losses $ 6,767 $ 5,218 Reinsurance recoverable on unpaid losses 11,157 7,496 Reinsurance recoverable, net $ 17,924 $ 12,714
Premiums Written and Earned	The following table indicates premiums written and earned as follows: Three Months Ended March 31, 2016 2015 (in thousands) Premiums written: Direct $ 136,025 $ 106,702 Ceded (43,570 ) (25,958 ) $ 92,455 $ 80,744 Premiums earned: Direct $ 128,099 $ 95,693 Ceded (73,102 ) (50,907 ) $ 54,997 $ 44,786

LOSS AND LAE RESERVES (Tables)

LOSS AND LAE RESERVES (Tables)	3 Months Ended
	Mar. 31, 2016
LOSS AND LAE RESERVES [Abstract]
Summary of Activity in Liability for Loss and LAE Reserves	Activity in the liability for loss and LAE reserves is summarized as follows: Three Months Ended March 31, 2016 Year Ended December 31, 2015 (in thousands) Gross reserves, beginning of period $ 97,340 $ 78,330 Less: reinsurance recoverable (1) (7,496 ) (10,394 ) Net reserves, beginning of period 89,844 67,936 Incurred loss, net of reinsurance, related to: Current year 30,093 113,819 Prior years (548 ) (9,466 ) Total incurred loss and LAE, net of reinsurance 29,545 104,353 Paid loss, net of reinsurance, related to: Current year 9,221 49,531 Prior years 19,710 32,914 Total paid loss and LAE, net of reinsurance 28,931 82,445 Net reserves, end of period 90,458 89,844 Plus: reinsurance recoverable (1) 11,157 7,496 Gross reserves, end of period $ 101,615 $ 97,340 (1) Reinsurance recoverable in this table includes only ceded loss and LAE reserves.

INCOME TAXES (Tables)

INCOME TAXES (Tables)	3 Months Ended
	Mar. 31, 2016
INCOME TAXES [Abstract]
Summary of Provision for Income Tax Benefit	A summary of the provision for income tax expense is as follows. Three Months Ended March 31, 2016 2015 (in thousands) Federal: Current $ 3,544 $ 4,652 Deferred 1,439 259 Federal income tax expense 4,983 4,911 State: Current 276 731 Deferred 536 69 State income tax expense 812 800 Total income taxes $ 5,795 $ 5,711
Components of Effective Federal and State Tax Rates to Income before Provision for Income Tax Benefit	The actual income tax expense differs from the "expected" income tax expense (computed by applying the combined applicable effective federal and state tax rates to income before income tax expense as follows: Three Months Ended March 31, 2016 2015 (in thousands) Computed expected tax expense provision, at federal rate $ 5,389 $ 5,248 State tax, net of federal tax benefit 534 543 Other (128 ) (80 ) Total income taxes $ 5,795 $ 5,711

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2016
SHAREHOLDERS' EQUITY [Abstract]
Schedule of Share-based Compensation Arrangements	The following table provides certain information in connection with the Company’s share-based compensation arrangements as follows: Three months ended March 31, 2016 2015 (in thousands) Restricted stock $ 680 $ 728 Stock options - 24 Total share-based compensation expense $ 680 $ 752 Excess tax benefits from stock-based awards $ 246 $ 530 Intrinsic value of options exercised $ 193 $ 2,346 Fair value of restricted stock vested $ 12,358 $ 17,387
Summary of Stock Option Activity	A summary of the Company’s stock option activity for the period from January 1, 2016 to March 31, 2016 is as follows: Number of Shares Weighted Average Option Exercise Price Outstanding at January 1, 2016 174,633 $ 3.79 Granted - $ - Exercised (1,100 ) $ 4.20 Cancelled - $ - Outstanding at March 31, 2016 173,533 $ 3.78
Summary of Restricted Stock Activity	A summary of the Company’s restricted stock activity for the period from January 1, 2016 to March 31, 2016 is as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding at January 1, 2016 418,807 $ 20.14 Granted 128,472 $ 19.16 Vested (79,381 ) $ 15.57 Cancelled - $ - Outstanding at March 31, 2016 467,898 $ 20.64
Reconciliation of Changes in Accumulated Other Comprehensive Income Attributable to FNHC Shareholders	The following table presents a reconciliation of the changes in accumulated other comprehensive income during the three months ended March 31, 2016 and 2015: Three Months Ended March 31, 2016 2015 Before Tax Income Tax Net Before Tax Income Tax Net (in thousands) Accumulated other comprehensive income, beginning of period $ 6,111 $ (2,247 ) $ 3,864 $ 12,417 $ (4,699 ) $ 7,718 Other comprehensive income before reclassifications 5,570 (2,103 ) 3,467 4,717 (1,806 ) 2,911 Reclassification adjustment for realized gains included in net income (1,486 ) 559 (927 ) (2,752 ) 1,048 (1,704 ) 4,084 (1,544 ) 2,540 1,965 (758 ) 1,207 Accumulated other comprehensive income, end of period $ 10,195 $ (3,791 ) $ 6,404 $ 14,382 $ (5,457 ) $ 8,925

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2016
EARNINGS PER SHARE [Abstract]
Schedule of Computations of Basic and Diluted Net Income Per Common Share	The following table illustrates our computations of basic and diluted net income per share. Three Months Ended March 31, 2016 2015 (in thousands, except per share data) Net income attributable to Federated National Holding Company shareholders $ 9,535 $ 9,284 Weighted average number of common shares outstanding - basic 13,826 13,656 Net income per share - basic $ 0.69 $ 0.68 Weighted average number of common shares outstanding - basic 13,826 13,656 Dilutive effect of stock compensation plans $ 218 $ 320 Weighted average number of common shares outstanding - diluted 14,044 13,976 Net income per share - diluted $ 0.68 $ 0.66 Dividends per share $ 0.05 $ 0.04

VARIABLE INTEREST ENTITY (Table

VARIABLE INTEREST ENTITY (Tables)	3 Months Ended
	Mar. 31, 2016
Variable Interest Entity [Abstract]
Carrying Amount of VIE Consolidated Assets and Liabilities	The carrying amounts of the assets of Monarch Delaware, our consolidated VIE, which can only be used to settle obligations of Monarch Delaware, and liabilities of Monarch Delaware for which creditors do not have recourse are as follows: March 31, 2016 December 31, 2015 ASSETS (in thousands) Investments Debt maturities, held-to-maturity, at amortized cost $ 19,836 $ 21,312 Equity securities, available-for-sale, at fair value 3,151 1,358 Total investments 22,987 22,670 Cash and cash equivalents 14,990 14,616 Prepaid reinsurance premiums 14 34 Premiums receivable, net 344 355 Deferred income taxes 5 646 Income taxes receivable 395 - Deferred acquisition costs 237 234 Other assets 156 157 Total assets $ 39,128 $ 38,712 LIABILITIES Loss and loss adjustment expense reserves $ 324 $ 237 Unearned premiums 1,572 1,448 Debt 4,893 4,887 Income taxes payable - 8 Other liabilities 187 374 Total liabilities $ 6,976 $ 6,954

ORGANIZATION AND BUSINESS (Deta

ORGANIZATION AND BUSINESS (Details) - Monarch Delaware Holdings LLC [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 17, 2015
Business Organization [Line Item]
Capital contribution for voting interests	$ 14
Ownership interest in Monarch Parent's equity	42.40%
Voting interest held in Monarch Parent's equity	50.00%
Long-term debt		$ 5
Interest rate percentage		6.00%
Crosswinds [Member]
Business Organization [Line Item]
Capital contribution for voting interests	$ 14
Ownership interest in Monarch Parent's equity	42.40%
Voting interest held in Monarch Parent's equity	50.00%
Transatlantic Reinsurance Company [Member]
Business Organization [Line Item]
Capital contribution for voting interests	$ 5
Ownership interest in Monarch Parent's equity	15.20%
Transatlantic Reinsurance Company [Member] | Senior Debt [Member]
Business Organization [Line Item]
Long-term debt	$ 5
Maturity period of debt	6 years
Interest rate percentage	6.00%

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Change in Accounting Estimate [Line Items]
Net income	$ 9,603	$ 8,773
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets	7,829		$ 7,605
Debt from consolidated variable interest entity	4,893		$ 4,887
Change in Accounting Method Accounted for as Change in Estimate [Member] | Quota Share Reinsurance Adjustments [Member]
Change in Accounting Estimate [Line Items]
Net income		$ 1,300
Accounting Standards Update 2015-03 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other assets	(100)
Debt from consolidated variable interest entity	$ (100)

FAIR VALUE (Details)

FAIR VALUE (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Debt securities [Abstract]
Debt securities	$ 339,245	$ 339,178
Equity securities	40,830	38,534
Recurring [Member]
Debt securities [Abstract]
United States government obligations and authorities	53,473	61,553
Obligations of states and political subdivisions	124,310	110,702
Corporate	148,926	154,620
International	12,536	12,303
Debt securities	339,245	339,178
Equity securities	40,830	38,534
Total investments	380,075	377,712
Recurring [Member] | Level 1 [Member]
Debt securities [Abstract]
United States government obligations and authorities	26,578	34,733
Obligations of states and political subdivisions	0	0
Corporate	0	0
International	0	0
Debt securities	26,578	34,733
Equity securities	38,302	38,012
Total investments	64,880	72,745
Recurring [Member] | Level 2 [Member]
Debt securities [Abstract]
United States government obligations and authorities	26,895	26,820
Obligations of states and political subdivisions	124,310	110,702
Corporate	148,926	154,620
International	12,536	12,303
Debt securities	312,667	304,445
Equity securities	2,528	522
Total investments	315,195	304,967
Recurring [Member] | Level 3 [Member]
Debt securities [Abstract]
United States government obligations and authorities	0	0
Obligations of states and political subdivisions	0	0
Corporate	0	0
International	0	0
Debt securities	0	0
Equity securities	0	0
Total investments	$ 0	$ 0

INVESTMENTS, Unrealized Gains a

INVESTMENTS, Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Available-for-sale, Debt securities [Abstract]
Amortized cost	$ 333,568	$ 338,021
Gross unrealized gains	6,311	3,250
Gross unrealized losses	634	2,093
Estimated fair value	339,245	339,178
Available-for-sale, Equity securities [Abstract]
Amortized cost	36,312	33,581
Gross unrealized gains	6,297	6,809
Gross unrealized losses	1,779	1,856
Estimated fair value	40,830	38,534
Held-to-maturity securities [Abstract]
Amortized cost	6,218	6,619
Gross unrealized gains	102	44
Gross unrealized losses	88	224
Estimated fair value	6,232	6,439
Total Investments [Abstract]
Amortized cost	376,098	378,221
Gross unrealized gains	12,710	10,103
Gross unrealized losses	2,501	4,173
Estimated fair value	386,307	384,151
United States Government Obligations and Authorities [Member]
Available-for-sale, Debt securities [Abstract]
Amortized cost	52,406	61,384
Gross unrealized gains	1,075	489
Gross unrealized losses	8	320
Estimated fair value	53,473	61,553
Obligations of States and Political Subdivisions [Member]
Available-for-sale, Debt securities [Abstract]
Amortized cost	122,143	109,152
Gross unrealized gains	2,206	1,590
Gross unrealized losses	39	40
Estimated fair value	124,310	110,702
Corporate [Member]
Available-for-sale, Debt securities [Abstract]
Amortized cost	146,571	154,957
Gross unrealized gains	2,854	1,153
Gross unrealized losses	499	1,490
Estimated fair value	148,926	154,620
International [Member]
Available-for-sale, Debt securities [Abstract]
Amortized cost	12,448	12,528
Gross unrealized gains	176	18
Gross unrealized losses	88	243
Estimated fair value	12,536	12,303
United States Government Obligations and Authorities [Member]
Held-to-maturity securities [Abstract]
Amortized cost	4,238	4,275
Gross unrealized gains	65	30
Gross unrealized losses	82	204
Estimated fair value	4,221	4,101
Corporate [Member]
Held-to-maturity securities [Abstract]
Amortized cost	1,849	2,253
Gross unrealized gains	33	14
Gross unrealized losses	6	20
Estimated fair value	1,876	2,247
International [Member]
Held-to-maturity securities [Abstract]
Amortized cost	131	91
Gross unrealized gains	4	0
Gross unrealized losses	0	0
Estimated fair value	$ 135	$ 91

INVESTMENTS, Contractual Maturi

INVESTMENTS, Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Available-for-sale Securities, Debt maturities, Amortized cost [Abstract]
One year or less	$ 30,152	$ 24,470
Over one through five years	173,698	170,797
Over five through ten years	129,692	142,728
Over ten years	26	26
Amortized cost	333,568	338,021
Available-for-sale Securities, Debt maturities, Fair value [Abstract]
One year or less	30,177	24,488
Over one through five years	175,777	171,113
Over five through ten years	133,258	143,545
Over ten years	33	32
Amortized cost	339,245	339,178
Held-to-maturity Securities, Debt maturities, Amortized cost [Abstract]
One year or less	478	486
Over one through five years	1,927	1,899
Over five through ten years	3,813	4,234
Amortized cost	6,218	6,619
Held-to-maturity Securities, Debt Maturities, Fair value [Abstract]
One year or less	480	487
Over one through five years	1,976	1,915
Over five through ten years	3,776	4,037
Estimated fair value	6,232	6,439
Total Investments [Abstract]
Amortized cost	339,786	344,640
Estimated fair value	$ 345,477	$ 345,617

INVESTMENTS, Net Investment Inc

INVESTMENTS, Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net investment income [Abstract]
Interest income	$ 1,853	$ 1,440
Dividends income	187	106
Net investment income	$ 2,040	$ 1,546

INVESTMENTS, Net Realized Gains

INVESTMENTS, Net Realized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Gross realized gains and losses [Abstract]
Total gross realized gains	$ 2,042	$ 1,910
Total gross realized losses	(1,115)	(206)
Net realized gains on investments	927	1,704
Proceeds from sales of investments securities	66,700	53,500
Debt Securities [Member]
Gross realized gains and losses [Abstract]
Total gross realized gains	1,304	515
Total gross realized losses	(540)	(103)
Equity Securities [Member]
Gross realized gains and losses [Abstract]
Total gross realized gains	738	1,395
Total gross realized losses	$ (575)	$ (103)

INVESTMENTS, Aging of Gross Unr

INVESTMENTS, Aging of Gross Unrealized Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Fair value [Abstract]
Less than 12 months	$ 61,009		$ 154,742
12 months or longer	5,255		4,614
Total fair value	66,264		159,356
Gross unrealized losses [Abstract]
Less than 12 months	2,343		3,804
12 months or longer	70		145
Total gross unrealized losses	2,413		3,949
OTTI losses	0	$ 0
Debt Securities [Member]
Fair value [Abstract]
Less than 12 months	50,104		142,952
12 months or longer	5,230		4,530
Total fair value	55,334		147,482
Gross unrealized losses [Abstract]
Less than 12 months	566		1,954
12 months or longer	68		139
Total gross unrealized losses	634		2,093
United States Government Obligations and Authorities [Member]
Fair value [Abstract]
Less than 12 months	1,058		30,464
12 months or longer	660		659
Total fair value	1,718		31,123
Gross unrealized losses [Abstract]
Less than 12 months	2		303
12 months or longer	6		17
Total gross unrealized losses	8		320
Obligations of States and Political Subdivisions [Member]
Fair value [Abstract]
Less than 12 months	15,750		16,652
12 months or longer	1,032		0
Total fair value	16,782		16,652
Gross unrealized losses [Abstract]
Less than 12 months	38		40
12 months or longer	1		0
Total gross unrealized losses	39		40
Corporate [Member]
Fair value [Abstract]
Less than 12 months	31,204		87,176
12 months or longer	2,935		3,590
Total fair value	34,139		90,766
Gross unrealized losses [Abstract]
Less than 12 months	466		1,420
12 months or longer	33		70
Total gross unrealized losses	499		1,490
International [Member]
Fair value [Abstract]
Less than 12 months	2,092		8,660
12 months or longer	603		281
Total fair value	2,695		8,941
Gross unrealized losses [Abstract]
Less than 12 months	60		191
12 months or longer	28		52
Total gross unrealized losses	88		243
Equity Securities [Member]
Fair value [Abstract]
Less than 12 months	10,905		11,790
12 months or longer	25		84
Total fair value	10,930		11,874
Gross unrealized losses [Abstract]
Less than 12 months	1,777		1,850
12 months or longer	2		6
Total gross unrealized losses	$ 1,779		$ 1,856

INVESTMENTS, Collateral Deposit

INVESTMENTS, Collateral Deposits (Details) $ in Millions	Mar. 31, 2016USD ($)
INVESTMENTS [Abstract]
Fair value of investments deposited with governmental authorities required by law	$ 12

REINSURANCE (Details)

REINSURANCE (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)Program	Mar. 31, 2015USD ($)	Dec. 31, 2015USD ($)
Reinsurance recoverables [Abstract]
Reinsurance recoverable on paid losses	$ 6,767		$ 5,218
Reinsurance recoverable on unpaid losses	11,157		7,496
Reinsurance recoverable, net	17,924		12,714
Premiums written [Abstract]
Direct	136,025	$ 106,702
Ceded	(43,570)	(25,958)
Net premiums written	92,455	80,744
Premiums earned [Abstract]
Direct	128,099	95,693
Ceded	(73,102)	(50,907)
Net premiums earned	54,997	$ 44,786
Liability for Catastrophe Claims [Line Items]
Aggregate catastrophic loss coverage	1,820,000
Maximum single event coverage	$ 1,260,000
Number of quota share treaties | Program	2
Combined percentage of quota share reinstatement treaty	40.00%
Trust agreement for loss exposure	$ 3,500		$ 3,500
Quota Share One [Member]
Liability for Catastrophe Claims [Line Items]
Percentage of quota share reinsurance treaty	30.00%
Quota Share Two [Member]
Liability for Catastrophe Claims [Line Items]
Percentage of quota share reinsurance treaty	10.00%
Florida [Member]
Liability for Catastrophe Claims [Line Items]
Amount retained per loss	$ 12,900
Covered losses for homeowners' insurance program	100,000
Louisiana, Alabama and South Carolina [Member]
Liability for Catastrophe Claims [Line Items]
Amount retained per loss	$ 5,000

LOSS AND LAE RESERVES (Details)

LOSS AND LAE RESERVES (Details) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2016	Dec. 31, 2015
LOSS AND LAE RESERVES [Abstract]
Gross reserves, beginning of period		$ 97,340	$ 78,330
Less: reinsurance recoverable	[1]	(7,496)	(10,394)
Net reserves, beginning of period		89,844	67,936
Incurred loss, net of reinsurance, related to [Abstract]
Current year		30,093	113,819
Prior years		(548)	(9,466)
Total incurred loss and LAE, net of reinsurance		29,545	104,353
Paid loss, net of reinsurance, related to [Abstract]
Current year		9,221	49,531
Prior years		19,710	32,914
Total paid loss and LAE, net of reinsurance		28,931	82,445
Net reserves, end of period		90,458	89,844
Plus: reinsurance recoverable	[1]	11,157	7,496
Gross reserves, end of period		$ 101,615	$ 97,340
[1]	Reinsurance recoverable in this table includes only ceded loss and LAE reserves.

DEBT (Details)

DEBT (Details) - Monarch Delaware Holdings LLC [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 17, 2015
Debt Instrument [Line Items]
Long-term debt		$ 5
Interest rate percentage		6.00%
Maturity period of debt	Mar. 17, 2021
Debt issuance cost	$ 0.1

INCOME TAXES, Summary of Provis

INCOME TAXES, Summary of Provision for Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Federal [Abstract]
Current	$ 3,544	$ 4,652
Deferred	1,439	259
Federal income tax expense	4,983	4,911
State [Abstract]
Current	276	731
Deferred	536	69
State income tax expense	812	800
Total income taxes	$ 5,795	$ 5,711

INCOME TAXES, Effective Income

INCOME TAXES, Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Components of effective federal and state tax rates to income before provision for income tax benefit [Abstract]
Computed expected tax expense provision, at federal rate	$ 5,389	$ 5,248
State tax, net of federal tax benefit	534	543
Other	(128)	(80)
Total income taxes	5,795	$ 5,711
Uncertain tax positions	$ 0		$ 0

SHAREHOLDERS' EQUITY, Common St

SHAREHOLDERS' EQUITY, Common Stock Repurchases (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
SHAREHOLDERS' EQUITY [Abstract]
Common stock repurchases, authorized amount	$ 10,000
Common stock repurchased during period (in shares) | shares	52,600
Common stock repurchased during period, total cost	$ 1,077
Common stock repurchased during period, average price (in dollars per share) | $ / shares	$ 20.44

SHAREHOLDERS' EQUITY, Share-bas

SHAREHOLDERS' EQUITY, Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 680	$ 752
Excess tax benefits from share-based awards	246	530
Intrinsic value of options exercised	193	2,346
Fair value of restricted stock vested	12,358	17,387
Unamortized share-based compensation expense	$ 8,700
Remaining weighted average vesting period	3 years 2 months 23 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 680	728
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 0	$ 24

SHAREHOLDERS' EQUITY, Stock Opt

SHAREHOLDERS' EQUITY, Stock Option Awards (Details) - Stock Options [Member]	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Stock Options, Number of Shares [Roll Forward]
Outstanding, beginning of period (in shares) | shares	174,633
Granted (in shares) | shares	0
Exercised (in shares) | shares	(1,100)
Cancelled (in shares) | shares	0
Outstanding, end of period (in shares) | shares	173,533
Stock Options, Weighted Average Option Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 3.79
Granted (in dollars per share) | $ / shares	0
Exercised (in dollars per share) | $ / shares	4.20
Cancelled (in dollars per share) | $ / shares	0
Outstanding, end of period (in dollars per share) | $ / shares	$ 3.78

SHAREHOLDERS' EQUITY, Restricte

SHAREHOLDERS' EQUITY, Restricted Stock (Details) - Restricted Stock [Member] - $ / shares	Mar. 10, 2016	Mar. 31, 2016
Restricted Shares, Number of Shares [Roll Forward]
Outstanding, beginning of period (in shares)		418,807
Granted (in shares)		128,472
Vested (in shares)		(79,381)
Cancelled (in shares)		0
Outstanding, end of period (in shares)		467,898
Restricted Shares, Weighted Average Option Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share)		$ 20.14
Granted (in dollars per share)		19.16
Vested (in dollars per share)		15.57
Cancelled (in dollars per share)		0
Outstanding, end of period (in dollars per share)		$ 20.64
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants vesting period	3 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants vesting period	5 years

SHAREHOLDERS' EQUITY, Reconcili

SHAREHOLDERS' EQUITY, Reconciliation of Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax [Roll Forward]
Other comprehensive income after reclassifications	$ (1,544)	$ (758)
Net [Roll Forward]
Accumulated other comprehensive income, beginning of period	3,985
Accumulated other comprehensive income, end of period	6,367
Accumulated Other Comprehensive Income Attributable to FNHC Shareholders [Member]
Before Tax [Roll Forward]
Accumulated other comprehensive income, beginning of period	6,111	12,417
Other comprehensive income before reclassifications	5,570	4,717
Reclassification adjustment for realized gains included in net income	(1,486)	(2,752)
Other comprehensive income after reclassifications	4,084	1,965
Accumulated other comprehensive income, end of period	10,195	14,382
Income Tax [Roll Forward]
Accumulated other comprehensive income, beginning of period	(2,247)	(4,699)
Other comprehensive income before reclassifications	(2,103)	(1,806)
Reclassification adjustment for realized gains included in net income	559	1,048
Other comprehensive income after reclassifications	(1,544)	(758)
Accumulated other comprehensive income, end of period	(3,791)	(5,457)
Net [Roll Forward]
Accumulated other comprehensive income, beginning of period	3,864	7,718
Other comprehensive income before reclassifications	3,467	2,911
Reclassifications from accumulated other comprehensive income	(927)	(1,704)
Other comprehensive income after reclassifications	2,540	1,207
Accumulated other comprehensive income, end of period	$ 6,404	$ 8,925

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
EARNINGS PER SHARE [Abstract]
Net income attributable to Federated National Holding Company shareholders	$ 9,535	$ 9,284
Weighted average number of common shares outstanding - basic (in shares)	13,826	13,656
Net income per share - basic (in dollars per share)	$ 0.69	$ 0.68
Dilutive effect of stock compensation plans (in shares)	218,000	320,000
Weighted average number of common shares outstanding - diluted (in shares)	14,044	13,976
Net income per share - diluted (in dollars per share)	$ 0.68	$ 0.66
Dividends per share (in dollars per share)	$ 0.05	$ 0.04

VARIABLE INTEREST ENTITY (Detai

VARIABLE INTEREST ENTITY (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Investments [Abstract]
Debt maturities, held-to-maturity, at amortized cost	$ 6,218	$ 6,619
Equity securities, available-for-sale, at fair value	40,830	38,534
Total investments	386,293	384,331
Cash and cash equivalents	72,562	53,038	$ 88,163	$ 40,157
Prepaid reinsurance premiums	113,117	120,771
Premiums receivable, net	48,232	38,594
Income taxes receivable	1,171	2,691
Deferred acquisition costs	15,764	15,547
Other assets	7,829	7,605
Total assets	666,128	638,185
LIABILITIES [Abstract]
Loss and loss adjustment expense reserves	101,615	97,340		$ 78,330
Unearned premiums	261,885	253,960
Debt	4,893	4,887
Other liabilities	27,645	25,612
Total liabilities	404,938	387,426
Variable Interest Entity (VIE) [Member]
Investments [Abstract]
Debt maturities, held-to-maturity, at amortized cost	19,836	21,312
Equity securities, available-for-sale, at fair value	3,151	1,358
Total investments	22,987	22,670
Cash and cash equivalents	14,990	14,616
Prepaid reinsurance premiums	14	34
Premiums receivable, net	344	355
Deferred income taxes	5	646
Income taxes receivable	395	0
Deferred acquisition costs	237	234
Other assets	156	157
Total assets	39,128	38,712
LIABILITIES [Abstract]
Loss and loss adjustment expense reserves	324	237
Unearned premiums	1,572	1,448
Debt	4,893	4,887
Income taxes payable	0	8
Other liabilities	187	374
Total liabilities	$ 6,976	$ 6,954

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event [Member]	May. 05, 2016
MNIC [Member]
Subsequent Event [Line Items]
Increase (decrease) in premium rate approved by Florida OIR	(11.90%)
FNIC [Member]
Subsequent Event [Line Items]
Increase (decrease) in premium rate approved by Florida OIR	5.60%