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Restructuring Charges and Asset Disposals
 12 Months Ended
Dec. 31, 2012
Restructuring Charges and Asset Disposals [Abstract]  
Restructuring Charges and Asset Disposals

Note 21. Restructuring Charges and Asset Disposals

The Company recorded restructuring charges and asset disposals of $0.9 million and $3.0 million for the twelve months ended December 31, 2012 and 2011. These costs are included in restructuring charges and asset disposals 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.

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. During the first quarter, the Company executed a workforce reduction of back office personnel to further reduce operating expenses. There were twelve employees in total affected by this announcement. This initiative resulted in a restructuring charge of $495,207, 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 liabilities.

 

On June 29, 2012, the Company announced that it would be consolidating three more branches in its continued effort to reduce operating expenses. Restructuring charges for the consolidation of these branches of $444,285 were comprised of $247,163 for severance expenses, lease liability charges of $140,292 and $56,830 in asset disposals.

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

 

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

Severance and benefit costs 2011

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

Lease liability costs 2011

     317,808       —         —         (144,809 )      172,999  

Severance and benefit costs 2012

     —         657,976       (657,976 )      —         —    

Lease liability costs 2012

     —         150,625       (61,689 )      (8,716 )      80,220  

Asset disposals 2012

     —         96,275       —         (96,275 )      —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 381,940     $ 939,492     $ (818,067 )    $ (250,146 )    $ 253,219  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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