Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

On May 9, 2023, shareholders approved the 2023 Stock Incentive Plan, which authorizes Mid Penn to grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. The 2023 Plan was established for employees and directors of Mid Penn and the Bank, selected by the Compensation Committee of the Board of Directors, to incentivize the further success of the Company, and replaces the 2014 Restricted

Stock Plan. The aggregate number of shares of common stock of the Company available for issuance under the Plan is 350,000 shares.

As of December 31, 2023, a total of 199,757 restricted shares were granted under the 2014 Plan, of which 88,269 shares were unvested. The 2014 Plan shares granted and vested resulted in $1.1 million and $701 thousand in share-based compensation expense for the years ended December 31, 2023 and 2022, respectively.

Share-based compensation expense relating to restricted stock is calculated using grant date fair value and is recognized on a straight-line basis over the vesting periods of the awards. Restricted shares granted to employees vest in equal amounts on the anniversary of the grant date over the vesting period and the expense is a component of salaries and benefits expense on the Consolidated Statement of Income. The employee grant vesting period is determined by the terms of each respective grant, with vesting periods generally between one and four years. Restricted shares granted to directors have a twelve-month vesting period, and the expense is a component of directors’ fees and benefits within the other expense line item on the Consolidated Statement of Income.

The following table presents compensation expense and related tax benefits for restricted stock awards recognized on the Consolidated Statements of Income:


(In thousands)	2023		2022		2021
Compensation expense	$	1,103	$	1,142	$	696
Tax benefit	(232)		(240)		(146)
Net income effect	$	871	$	902	$	550

The following table presents information regarding the non-vested restricted stock for the year ended December 31, 2023:


	Shares	Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2023	68,416	$	26.20
Vested	(9,069)	25.53
Forfeited	(6,295)	25.24
Granted	35,217	25.53
Non-vested at December 31, 2023	88,269	26.07

At December 31, 2023, there was $1.8 million of unrecognized compensation cost related to all non-vested share-based compensation awards, which will be recognized as compensation expense through April 2027 with a weighted average recognition period of 3.3 years. Mid Penn recognizes the impact of forfeitures as of the forfeiture date.