Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

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


(In thousands)	2022		2021		2020
Compensation expense	$	1,142	$	696	$	414
Tax benefit	(240)		(146)		(87)
Net income effect	$	902	$	550	$	327

The tax benefits were calculated using Mid Penn's federal statutory tax rate of 21%. Mid Penn may grant awards not exceeding, in the aggregate, 200,000 shares of common stock under the 2014 Restricted Stock Plan, which was amended in 2020. The Plan was established for employees and directors of Mid Penn and the Bank, selected by the Compensation Committee of the Board of Directors, to align the interest of plan participants with those of Mid Penn’s shareholders.

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. Generally, restricted shares granted to employees vest in equal amounts on the anniversary of the grant date over a 4-year vesting period, and the expense is a component of salaries and benefits expense on the Consolidated Statements of Income. Restricted shares granted to directors have a 12-month vesting period, and the expense is a component of directors’ fees and benefits within the other expense line item on the Consolidated Statements of Income.

The following table presents information regarding the non-vested restricted stock for the year ended December 31, 2022:


	Shares	Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2022	47,322	$	26.45
Vested	(25,175)	27.30
Forfeited	(200)	28.45
Granted	46,469	26.55
Non-vested at December 31, 2022	68,416	26.20

At December 31, 2022, there was $1.3 million of unrecognized compensation cost related to all non-vested share-based compensation awards, which will be recognized as compensation expense through June 2026 with a weighted average recognition period of 2.2 years. Mid Penn recognizes the impact of forfeitures as of the forfeiture date.