On July 17, 2020, the Bank announced management’s decision to adapt to a full-service branch model to streamline retail branches to better align with shifting customer needs and preferences. The transformation resulted in six branch closures and a reduction in staffing. The announcement was the result of a nine-month comprehensive assessment of all lines of business and functional areas, conducted in partnership with a leading process improvement organization. The data-driven analysis identified, among other things, overlapping service areas, automation opportunities and streamlining of processes and operations that would enhance customer experiences and facilitate the long-term sustainability of current and future branches. The announced consolidations represented about ten percent of the branch network and impacted approximately six percent of the total Company workforce. Where possible, those impacted were offered alternative roles or the opportunity to apply for open positions in other areas of the Company. Separated associates received a comprehensive severance package based on tenure.

In October 2020, the Company announced the planned closure of one additional branch that closed in January 2021. This location was not included in the branch consolidations announced in July, as alternative options were being considered and consolidation was not possible given its significant distance from other Bank branches.

The Company incurred total pre-tax expense related to the branch closures of approximately $1.7 million, including approximately $0.2 million in employee severance, $0.5 million in lease termination costs and $1.0 million in valuation adjustments on branch facilities. The Company recognized all of these expenses during 2020. The Company expects $0.8 million of total costs will result in future cash expenditures. The Company anticipates annual expense savings of approximately $2.7 million as a result of these branch closures.

The Company incurred no restructuring charges during the six months ended June 30, 2021 and 2020.

The following table represents the changes in the restructuring reserve (in thousands):

	Three months ended June 30,					Six months ended June 30,
	2021			2020		2021			2020
Balance at beginning of period	$	1,161		$	—	$	1,245		$	—
Restructuring charges		—			—		—			—
Cash payments		(68	)		—		(146	)		—
Charges against assets		(5	)		—		(11	)		—
Balance at end of period	$	1,088		$	—	$	1,088		$	—

In contemplation of the transactions noted above, certain long-lived assets have met the held for sale criteria as of June 30, 2021. The Company reclassified $1.1 million from premises and equipment, net to other assets on the consolidated statement of financial condition as of June 30, 2021. No long-lived assets were reclassified as held for sale as of December 31, 2020.