Restructuring Charges and Asset Disposals

9 Months Ended

Sep. 30, 2011

Restructuring Charges and Asset Disposals [Abstract]

Restructuring Charges and Asset Disposals

Note 11: Restructuring Charges and Asset Disposals

Bancorp recorded restructuring charges and asset disposals of $3.0 million for the nine months ended September 30, 2011. These costs are included in restructuring charges and asset disposals expense in the Consolidated Statements of Operations.

During 2011, Bancorp announced that it would be undertaking a series of initiatives that are designed to transform and enhance its operations. In order to strengthen Bancorp’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, Bancorp 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 $0.4 million, and severance payments of $0.2 million to affected employees. In addition, there was a $0.6 million write-off of leasehold improvements and other fixed assets for these branches that were closed.

In order to further reduce operating expenses, Bancorp 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 $0.6 million, which is comprised exclusively of severance payments to affected employees.

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

Restructuring reserves at September 30, 2011 for the restructuring activities taken in connection with these initiatives are comprised of the following:

			Cash			Non-cash			Balance at
	Expenses		payments			charges			September 30, 2011
Severance and benefit costs	$	756,727	$	(556,458	)	$	(17,920	)	$	182,349
Lease termination costs		1,659,995		(1,279,034	)		(38,935	)		342,026
Asset disposals		569,719		—			(569,719	)		—
Total	$	2,986,441	$	(1,835,492	)	$	(626,574	)	$	524,375

The restructuring reserves at September 30, 2011 are included in accrued expenses and other liabilities in the Consolidated Balance Sheet.