Common Stock and Earnings Per Share

3 Months Ended

Mar. 31, 2023

Common Stock, Number of Shares, Par Value and Other Disclosure [Abstract]

Common Stock and Earnings Per Share

Common Stock and Earnings Per Share

Treasury Stock Repurchase Program

Mid Penn adopted a treasury stock repurchase program ("Program") initially effective March 19, 2020, and extended through March 19, 2023 by Mid Penn’s Board of Directors on March 23, 2022. The Program authorized the repurchase of up to $15.0 million of Mid Penn’s outstanding common stock, which represented approximately 3.5% of the issued shares based on Mid Penn’s closing stock price and shares issued as of March 31, 2022. Under the Program, Mid Penn conducted repurchases of its common stock through open market transactions (which may be by means of a trading plan adopted under SEC Rule 10b5-1) or in privately negotiated transactions. Repurchases under the Program were made at the discretion of management and are subject to market conditions and other factors. There was no guarantee as to the exact number of shares that Mid Penn may repurchase.The Program was able to be modified, suspended or terminated at any time, in Mid Penn’s discretion, based upon a number of factors, including liquidity, market conditions, the availability of alternative investment opportunities and other factors Mid Penn deems appropriate. The Program does not obligate Mid Penn to repurchase any shares.

As of March 31, 2023 and December 31, 2022, Mid Penn had repurchased 208,343 shares of common stock at an average price of $23.42 per share under the Program. The Program ended effective March 23, 2023.

Dividend Reinvestment Plan

Under Mid Penn’s amended and restated DRIP, 300,000 shares of Mid Penn’s authorized but unissued common stock are reserved for issuance. The DRIP also allows for voluntary cash payments, within specified limits, to be used for the purchase of additional shares.

Restricted Stock Plan

Under Mid Penn’s 2014 Restricted Stock Plan, which was amended in 2020, Mid Penn may grant awards not exceeding, in the aggregate, 200,000 shares of common stock. The 2014 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. The plan provides those persons who have a responsibility for its growth with additional incentives by allowing them to acquire an ownership interest in Mid Penn and thereby encouraging them to contribute to the success of the company.

As of March 31, 2023, a total of 162,937 restricted shares were granted under the Plan of which 67,283 shares were unvested. The Plan shares granted and vested resulted in $249 thousand and $168 thousand in share-based compensation expense for the three months ended March 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.

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 to qualified. 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. The aggregate number of shares of common stock of the Company under the Plan is 350,000 shares.

The following data shows the amounts used in computing basic and diluted earnings per common share:

	Three Months Ended March 31,
(In thousands, except per share data)	2023		2022
Net income	$	11,227	$	11,354
Weighted average common shares outstanding (basic)	15,886,186		15,957,864
Effect of dilutive unvested restricted stock grants	44,935		20,072
Weighted average common shares outstanding (diluted)	15,931,121		15,977,936
Basic earnings per common share	$	0.71	$	0.71
Diluted earnings per common share	0.70		0.71

There were no antidilutive instruments at March 31, 2023 and 2022.