Double click the layer to open layer style window. Apply settings as shown.
Duplicate the layer and remove the layer styles. Double click the layer to open layer style window. Apply settings as shown.
From layer menu select layer style>>create layers. Select and merge all the resulting layers. Hide the original text layer. Select smudge tool with the brush settings as shown.
Distort the edges as shown by applying smudge tool.
Double click the layer to open layer style window. Apply settings as shown. Unhide the original text layer.
