On July 17, 2020, the Bank announced management’s decision to adopt a full-service branch model that streamlines 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 in January 2021. This location was not included in the branch consolidations announced in July 2020, 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 during 2020. Additional related restructuring charges of $200 thousand and $1.6 million were incurred in 2023 and 2022, respectively, as a result of property valuation adjustments to write-down certain real estate assets to fair market value based on existing purchase offers and current market conditions.

The following table represents the consolidated statements of income classification of the Company’s restructuring charges (in thousands):


	Income Statement Location	2023			2022		2021
Release of restructuring reserve	Restructuring charges	$	(4	)	$	-	$	-
Valuation adjustments	Restructuring charges		200			1,619		111
Other	Restructuring charges		(82	)		-		11
Total		$	114		$	1,619	$	122

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


	Amount
Balance, December 31, 2020	$	1,245
Restructuring charges		122
Cash payments		(192	)
Charges against assets		(730	)
Balance, December 31, 2021		445
Restructuring charges		1,619
Cash payments		(59	)
Charges against assets		(1,703	)
Balance, December 31, 2022		302
Restructuring charges		114
Other		82
Cash payments		(53	)
Charges against assets		(200	)
Balance, December 31, 2023	$	245

In contemplation of the transactions noted above, certain long-lived assets had met the held for sale criteria as of December 31, 2023 and 2022. Long lived assets held for sale totaled $629 thousand and $1.5 million as of December 31, 2023 and 2022, respectively. For the year ended December 31, 2023 the Company recognized a $44 thousand gain on the sale of long-lived assets held for sale.