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Restructuring Charges and Asset Disposals

3 Months Ended

Mar. 31, 2012

Restructuring Charges and Asset Disposals [Abstract]

Restructuring Charges and Asset Disposals

Note 12. Restructuring Charges and Asset Disposals

The Company recorded restructuring charges of $368,000 for the three months ended March 31, 2012. These costs are included in restructuring charge expense in the Consolidated Statements of Operations.

During 2011, the Company announced that it would be undertaking a series of initiatives that are designed to transform and enhance its operations. In order to strengthen the Company’s competitive position and return it to its goal of restored health and profitability, it executed one initiative to consolidate four branch locations and vacate other office space, and a second plan to reduce workforce by approximately 10% of employees.

On March 3, 2011, the Company announced that it would consolidate four branches, effective June 2011, to reduce operating expenses. All customer accounts in the affected branches were transferred to nearby Patriot branches to minimize any inconvenience to customers. The consolidation of these branches resulted in an earnings charge of $1.8 million, which is comprised of lease termination expenses of $1.2 million, lease liabilities charges of $400,000, and severance payments of $200,000 to affected employees. In addition, there was a $600,000 write-off of leasehold improvements and other fixed assets for these branches that were closed.

In order to further reduce operating expenses, the Company announced on May 16, 2011 that it would be executing a workforce reduction plan with employees in the back office operational areas. There were a total of eighteen employees affected by this reduction. This initiative resulted in an earnings charge of $600,000, which is comprised exclusively of severance payments to affected employees.

On September 23, 2011, the Company subleased vacant office space at 900 Bedford Street, Stamford, CT, effective October 1, 2011 for a term of two years.

On March 30, 2012, the Company announced that it would close the NYC branch, effective June 2012, and executed a workforce reduction of back office personnel to further reduce operating expenses. There were twelve employees in total affected by this announcement. For the three months ended March 31, 2012, a restructuring charge of $368,000 was recorded, which was comprised of severance expenses for the back office personnel.

Restructuring reserves at March 31, 2012 for the restructuring activities taken in connection with these initiatives are comprised of the following:


	Balance at				Cash			Non-cash			Balance at
	December 31, 2011		Expenses		payments			charges			March 31, 2012
Severance and benefit costs 2011	$	64,132	$	—	$	(17,666	)	$	(2,993	)	$	43,473
Lease termination costs 2011		317,808		—		—			(36,202	)		281,606
Severance and benefit costs 2012		—		368,477		—						368,477

Total	$	381,940	$	368,477	$	(17,666	)	$	(39,195	)	$	693,556

The restructuring reserves at March 31, 2012 are included in accrued expenses and other liabilities in the Consolidated Balance Sheet.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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