Embossed Leather Letters

Step 1.

First of all we have to create a leather texture. Create a new 350X300 pixels document with the dark brown color background. Apply Filter > Texture > Texturizer with the following settings:Texture->Canvas, Scaling->100%, Relief->5. Then apply Filter > Artistic >Palette Knife with the following settings:Stroke Size->9, Stroke Detail->3, Softness->5.

Step 2.

Now apply Filter > Blur > Gaussian Blur with Radius-> 4pixels and then apply Filter > Texture > Texturizer with the following settings:Texture->Burlap, Scaling->200%, Relief->1.

Step 3.

Now duplicate a main layer ("Layer 1 copy"). Choose the Type Tool and write a text. Place it in the center of the image. Now create a selection around the text (apply Select > Color Range...). Then turn on all layers and delete a text layer.

Step 4.

Apply Select > Inverse (Ctrl+Shift+I) and press Del. Apply Layer > Later Style > Bevel and Emboss with the following settings:

And then apply Layer > Later Style > Inner Shadow with the following settings:

And that's it.