1. Open your image.
2. Double-click on the background layer to change it to Layer 0 (unlocking the background layer). Rename the layer Image.
3. Image Layer: add the black stroke. Layer Style>Stroke (inside, 1px, Black)
4. Add a new layer under the Image Layer. Name it White Matt
5. Image>Canvas Size (make sure Relative is checked) and add the desired amount of white you want around your image, such as 2” Width, 2” Height. Fill layer with white.
6. Add a new layer under the White Matt Layer. Name it Black Frame
7. Image>Canvas Size (make sure Relative is checked) and add the desired amount of black you want around your image, such as .5” Width, .5” Height. Fill with black.
8. Ctrl+Select the white layer, then click on your black layer. Select delete. This will remove the center of the black layer out, creating the frame. Move this layer above the White Matt Layer.
9. Duplicate the Black Frame Layer. Name this layer Drop Shadow and place it below the Black Frame Layer. Lower the opacity to about 35%. Using Transform (Ctrl+T), shrink the frame so that it becomes the drop shadow. Apply a Guassian Blur (Filter>Blur>Guassian) to soften the shadow.
There are actions for this. Try the following: Mike's Frame Actions. You will have to scroll down the page to find it or click on the zip file link below.
Zip Action File