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Stock-Based Compensation Plans
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Plans Stock-Based Compensation Plans
The Corporation recognizes stock-based compensation expense for equity awards based on the grant-date fair value of the awards. Compensation expense is recognized on a straight-line basis over the requisite service period and is included in salaries and benefits expense in the Consolidated Statements of Income.
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 replaced the 2014 Restricted Stock Plan. The aggregate number of shares of common stock of the Company available for issuance under the Plans is 550,000 shares.
As of December 31, 2025, a total of 314,804 restricted shares were granted under the Plans, of which 110,845 shares were unvested. The Plan's shares granted and vested resulted in $4.5 million and $1.1 million in stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively.
Stock-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.
Compensation expense and related tax benefits for restricted stock awards recognized on the Consolidated Statements of Income for the years ended December 31 is as follows:
(In thousands)202520242023
Compensation expense$1,999 $1,047 $1,103 
Tax benefit (1)
(420)(220)(232)
Net income effect$1,579 $827 $871 
(1)    Calculated using statutory tax rate of 21%.
A summary of the restricted stock activity for the year ended December 31, 2025 is as follows:
(Dollars in thousands)Number of SharesWeighted-Average Grant-Date Fair Value
Non-vested as of January 1, 202582,278$23.75 
Vested(37,878)28.35 
Granted66,44525.90 
Non-vested as of December 31, 2025110,84523.46 

As of December 31, 2025, there was $2.7 million of total unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a weighted-average period of 2.7 years through September 2028. Mid Penn recognizes the impact of forfeitures as of the forfeiture date.
Equity Awards Assumed from William Penn Acquisition
In connection with the William Penn Acquisition on April 30, 2025, the Corporation issued 3,506,795 shares of common stock as purchase consideration and assumed outstanding equity awards of William Penn, resulting in the issuance of 538,447 stock options and 215,386 restricted stock units "RSUs" of which 134,618 stock options and 53,822 restricted stock units remained unvested as of December 31, 2025.
Compensation expense for stock options was $1.0 million for the year ended December 31, 2025. As of December 31, 2025, unrecognized compensation expense related to unvested options was $776 thousand. Compensation expense for restricted stock awards was $2.1 million for the year ended December 31, 2025. As of December 31, 2025, unrecognized compensation cost related to unvested restricted stock was $1.1 million.
The assumed awards are subject to the original vesting terms and conditions included in the William Penn stock-based compensation plan.