XML 59 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Restructuring Charges and Asset Disposals
 9 Months Ended
Sep. 30, 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 $503,000 for the nine months ended September 30, 2012, compared to $3.0 million in the same period as last year. These costs are included in restructuring charges and asset disposals 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 six months ended June 30, 2012, a restructuring charge of $495,207 was recorded, which was comprised of $445,429 for severance expenses for the branch and back office personnel, asset disposals of $39,445 and $10,333 in lease termination costs.

On June 29, 2012, the Company announced that it would be consolidating three more branches, effective September 2012 in its continued effort to reduce operating expenses. Management made the decision in the third quarter to push back the closing of the three branches until October 5, 2012.

Restructuring reserves at September 30, 2012 for the restructuring activities taken in connection with these initiatives are comprised of the following:

 

                                         
    Balance at
December 31, 2011		     Expenses     Cash
payments		     Non-cash
charges		     Balance at
September 30, 2012		  

Severance and benefit costs 2011

   $ 64,132     $ 34,616     $ (98,402 )    $ (346 )    $ —    

Lease termination costs 2011

     317,808       —         —         (108,607 )      209,201  

Severance and benefit costs 2012

     —         418,978       (418,978 )      —         —    

Lease termination costs 2012

     —         10,333       (10,333 )      —         —    

Asset disposals 2012

     —         39,445       —         (39,445 )      —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 381,940     $ 503,372     $ (527,713 )    $ (148,398 )    $ 209,201  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The restructuring reserves at September 30, 2012 are included in accrued expenses and other liabilities in the Consolidated Balance Sheet.