MID PENN BANCORP INCMPB

MID PENN BANCORP INC Stock Compensation Disclosure

10-KFiled Mar 13, 20252 min read
Stock-Based Compensation Plans
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, 2024, a total of 263,974 restricted shares were granted under the 2014 Restricted Stock Plan, of which 82,278 shares were unvested. The 2014 Restricted Stock Plan shares granted and vested resulted in $1.1 million in share-based compensation expense for the years ended December 31, 2024 and 2023, 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)202420232022
Compensation expense$1,047 $1,103 $1,142 
Tax benefit(220)(232)(240)
Net income effect$827 $871 $902 
The following table presents information regarding the non-vested restricted stock for the year ended December 31, 2024:
SharesWeighted-Average Grant Date Fair Value
Non-vested at January 1, 202488,269$26.07 
Vested(41,101)25.50 
Forfeited(5,950)20.59 
Granted41,06020.05 
Non-vested at December 31, 202482,27823.75 
At December 31, 2024, there was $1.9 million of unrecognized compensation cost related to all non-vested share-based compensation awards, which will be recognized as compensation expense through April 2028 with a weighted average recognition period of 2.5 years. Mid Penn recognizes the impact of forfeitures as of the forfeiture date.

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

Other Available Disclosures

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