Wooden Text Effect in Photoshop

Preparations:

We will use an image of Krakograff texture and a wood texture that can be found on FreeFoto.
Click here to download Krakograff texture.
Click here to download the city image.

Step 1 - Setting Up Background:

Create a document of size 750 by 550px and place the texture image at the center of it.
Go to Filter > Render > Lighting Effects.

Fill in the settings shown in the diagram.

Step 2 - Adjusting Colors:

Create a new Hue/Saturation Adjustment Layer.

Fill in 0 for Hue, -75 for Saturation and 0 for Lightness.
Create another Levels Adjustment Layer and fill in the values 0, 0.60, 255.

Step 3 - Placing Your Texts:

The font I used in this tutorial is called Stencil. You can download it at Dafont with you have not got it.

Type in your text at the center of the document. Try not to use small font sizes as we will be doing emboss effects later on.

Step 4a - Applying Texture:

I placed the wood texture on top of my "10". Ctrl+left click on the text to load selection.

Apply a layer mask on the wood texture with this selection.

Step 4b - Applying Texture:

Similar to Step 4a, I reduce the size of the wood texture since "Steps.SG" is of a smaller font size.

Ctrl+left click on the texts to laod selection.

Apply a layer mask on the wood texture with this selection.

Step 5a - Apply Emboss Effects:

Right-click on the "10" and select choose Blending Options.

Activate Bevel and Emboss and fill in the settings as shown.

The colors used for Highlight Mode is #CEBE80 and Shadow is #000000.

Step 5b - Apply Emboss Effects:

Activate Inner Glow and fill in the settings as shown.

Right-click on the "10" layer and choose Copy Layer Style. Then right-click on the "Steps.SG" and choose Paste Layer Style.

The color used for Blend Mode is #2E2E00.

Step 5c - Apply Emboss Effects:

Change the Blend Mode of "Photoshop Tutorials" to Soft Light.

You should be seeing something similar to the example.

Step 6 - Adding Border:

Create a new layer below all these texts.

Load their selections and go to Select > Modify > Expand by 6 px.

Fill the selection with #FFFFFF on the new layer. This shall form a white border around the texts.

Step 7a - Adding Pillow Emboss:

Right-click on the border layer and choose Blending Options.

Activate Bevel and Emboss. Fill in the settings as shown in the diagram.

The colors used for Highlight Mode is #DBC09C and Shadow is #000000.

Step 7b - Adding Pillow Emboss:

Activate the Inner Glow and fill in the settings as shown in the diagram.

The color used for Blend Mode is #000000.

Finally, set the Blend Mode of this border layer to Soft Light.

There you have it! I have added a faded skull behind to complete the design.