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Stockholders' Equity
 12 Months Ended
Dec. 31, 2019
Stockholders' Equity Attributable to Parent [Abstract]  
Stockholders' equity Stockholders’ equity
Capital Stock
The Company’s authorized capital stock consists of 400,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share. There were no shares of preferred stock issued or outstanding at December 31, 2019 or December 31, 2018.
Public Offering
On August 12, 2019, the Company completed an underwritten public offering of 741,750 shares of its common stock at a price of $93.00 per share, which included 96,750 shares sold to the underwriters pursuant to the underwriter’s option to purchase additional shares. After underwriter discounts and commissions and offering expenses, the Company received net proceeds from the offering of approximately $65.9 million.
Dividend Declaration
On February 14, 2019, the Company’s Board of Directors declared a cash dividend of $0.08 per share of common stock. This dividend was paid on March 14, 2019 to all stockholders of record on February 28, 2019.
On May 23, 2019, the Company’s Board of Directors declared a cash dividend of $0.08 per share of common stock. This dividend was paid on June 13, 2019 to all stockholders of record on June 3, 2019.
On August 15, 2019, the Company’s Board of Directors declared a cash dividend of $0.08 per share of common stock. This dividend was paid on September 12, 2019 to all stockholders of record on August 29, 2019.
On November 13, 2019, the Company’s Board of Directors declared a cash dividend of $0.08 per share of common stock. This dividend was paid on December 12, 2019 to all stockholders of record on November 29, 2019.
On February 13, 2020, the Company’s Board of Directors declared a cash dividend of $0.09 per share of common stock. This dividend is payable on March 12, 2020 to all stockholders of record on February 28, 2020.
Equity-based Compensation
On July 27, 2016, the Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan") became effective. The 2016 Incentive Plan, which is administered by the Compensation, Nominating and Corporate Governance Committee of the Company's Board of Directors, provides for grants of stock options, restricted stock, restricted stock units and other stock-based awards to officers, employees, directors, independent contractors and consultants. The number of shares of common stock available for issuance under the 2016 Incentive Plan may not exceed 2,073,832.
The Company recognized total equity-based compensation expense of $2.7 million, $1.6 million and $0.7 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Stock Options
On July 27, 2016, the Board of Directors approved, and the Company granted, 1,036,916 stock options with an exercise price equal to the initial public offering price of $16.00 per share. The options have a maximum contractual term of 10 years and vest in 4 equal annual installments following the date of the grant. The weighted average grant date fair value of options granted during 2016 was $2.71 per share.
The value of the options granted was estimated at the date of grant using the Black-Scholes pricing model using the following assumptions:
Risk-free rate of return
 
1.26
%
Dividend yield
 
1.25
%
Expected share price volatility(1)
 
18.50
%
Expected life in years(2)
 
6.3 years


(1)
Expected volatility was based on the Company’s competitors within the industry.
(2)
Expected life was calculated using the simplified method, which was an average of the contractual term of the option and its ordinary vesting period, as the Company did not have sufficient historical data for determining the expected term of our stock option awards.
A summary of option activity under the employee share option plan as of December 31, 2019, and changes during the year then ended is presented below:
 
 
Number of Shares
 
Weighted-average exercise price
 
Weighted-average remaining years of contractual life
 
Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2018
 
804,303

 
$
16.00

 
 
 
 
Granted
 
—

 
—

 
 
 
 
Forfeited
 
(18,068
)
 
16.00

 
 
 
 
Exercised
 
(171,890
)
 
16.00

 
 
 
 
Outstanding at December 31, 2019
 
614,345

 
$
16.00

 
6.6
 
$
52,625

Exercisable at December 31, 2019
 
393,614

 
$
16.00

 
6.6
 
$
33,717


The total intrinsic value of options exercised was $11.9 million during the year ended December 31, 2019 and $4.7 million during the year ended December 31, 2018. As of December 31, 2019, the Company had $0.3 million of unrecognized share-based compensation expense expected to be charged to earnings over a weighted-average period of 0.6 years.
Restricted Stock Awards
During 2019, the Board of Directors approved, and the Company granted, restricted stock awards under the 2016 Incentive Plan. The restricted stock awards were valued on the date of grant and will vest over a period of one year to four years corresponding to the anniversary date of the grants. The fair value of restricted stock awards was determined based on the closing trading price of the Company’s shares on the grant date or, if no shares were traded on the grant date, the last preceding date for which there was a sale of shares. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive cash dividends. Unvested shares of restricted stock awards and accrued dividends, if any, are forfeited upon the termination of service to or employment with the Company.
A summary of all restricted stock activity under the equity compensation plans for the year ended is as follows:
 
 
December 31, 2019
 
 
Number of Shares
 
Weighted Average Grant Date Fair Value per Share
Nonvested outstanding at the beginning of the period
 
92,465

 
$
52.98

Granted
 
62,015

 
$
80.59

Vested
 
(27,628
)
 
$
51.53

Forfeited
 
(4,129
)
 
$
60.58

Nonvested outstanding at the end of the period
 
122,723

 
$
67.01


Employees have the option to surrender shares to pay for withholding tax obligations resulting from any vesting of restricted stock awards. During the year ended December 31, 2019, restricted shares withheld for taxes in connection with the vesting of restricted stock awards totaled 7,365.
The weighted average grant-date fair value of the Company's restricted stock awards granted during the years ended December 31, 2019 and 2018 was $80.59 and $52.99, respectively. There were no restricted stock awards granted during the year ended December 31, 2017. The fair value of restricted stock awards that vested during the year ended December 31, 2019 was $2.1 million.There were no restricted stock awards that vested during the years ended December 31, 2018 or 2017. As of December 31, 2019, the Company had $6.5 million of total unrecognized stock-based compensation expense expected to be charged to earnings over a weighted-average period of 3.0 years.
Subsequent Event
The Board of Directors granted 4,428 shares of restricted stock on January 1, 2020 under the 2016 Incentive Plan to the Company’s non-employee directors. The restricted stock had a fair value on the date of grant of $101.66 per share and will vest on a straight-line basis over a one year period.