Start by typing the text using a bold font.

Press Ctrl+T. Right click the layer and select perspective. Adjust nodes to get the shape as shown.

From filter menu select artistic>>sponge. Apply settings as shown.

Double click the layer to open layer style window. Apply layer style with the settings shown.

Press Alt key and keep hitting the down arrow key to create 3d extrusion.

Select and merge the duplicate layers. Double click the layer to open layer style window. Apply layer style with the settings shown.

Ctrl+Click the text layer thumbnail to get the selection.

Press Q to enable quick mask. From filter menu select sketch>>water paper.

Press Q to disable quick mask. Create a new layer and fill it with dark brown color.

Change the layer mode to linear light.

Create a twisted shape using pen tool.

Duplicate several times and place as shown.

Select and merge all the shape layers. Press Ctrl+T. Right click the layer and select distort. Adjust nodes to get the shape as shown and place on the edge of an alphabet.

Similarly create threads for the other edges of the rest of the alphabets.

Select and merge all the layers. Duplicate the layer. Move this layer below the layer in layer order in layer palette. Offset a few pixels downwards.

Reduce the opacity to 50%.