1. Create a new file, white background, then create a new layer, use Type Mask Tool
to enter text, it'll create a selection of the text. 
2. Fill selection with black to white gradient, from top to bottom
3. Execute Select-> Modify-> Contract, 2 pixels, then tab left key to move selection 1 pixel to the left. then fill selection with black to white gradient, from bottom to top
4. Apply Filter-> Texture-> Grain, grain type : clumped, options as shown below
5. Apply Filter--> Noise-> Add noise
6. Use lesso tool, do some different selections on the edge of the text, then move them pixels away from the text so it looks like it's broken.
7. This is the final look
