1.) Click on File then click New then click Image. (Make sure Foreground & Backgrounds are White)

2.) Click on Open and point to a pattern (wood for this example).
    NOTE: You can use the Wood Pattern below by right-clicking and Save this Image.

3.) Select the Fill Tool and use the following settings:
    RGB Value
    Tolerance=200
    Fill Style=Pattern

4.) Click the Options button and select the image you opened (the wood image above or other wood image.)

5.) Select the Text Tool and then make sure the cursor is positioned and centered in your image. (floating box should be unchecked) now enter your text.
    NOTE: DO NOT DE-SELECT YOUR TEXT!

6.) Click on Colors and then click Adjust and then click Brightness/Contrast and use the following settings:
    Brightness=-25 (negative 25)
    Contrast=0

7.) Click on Image and then click Special Effects and then click Add Drop Shadow and use the following settings:
    Color=White
    Opacity=255
    Blur=0
    Vertical=1
    Horizontal=1

8.) Click on Image and then click Special Effects and then click Cutout and use the following settings:
    Fill Interior color= unchecked
    Interior color= White (Doesn't matter)
    Shadow color= Black
    Blur=0
    Verticle=2
    Horizontal=2

9.) Click on Selections and then click Select none and you are done.
    NOTE: On Steps 7 and 8 you can use larger settings for larger text. (Step 7 is usually best at 1)