EXTRACO ASSUMES OWNERSHIP OF HEIGHTS STATE BANK

December 3, 2002 - KILLEEN, TEXAS: S. Boyce Brown, President and CEO of Extraco Corporation, and Keith Maxwell, President of Extraco's West Bell and Copperas Cove region, announced today the purchase of Heights State Bank. The nearly $60 million asset bank transaction was approved by regulators in October, and final documents were signed in Harker Heights this morning.

The Harker Heights addition increases Extraco's assets to $840 million and expands the number of their Central Texas bank centers to thirteen. Extraco remains perhaps the soundest financial institution in Central Texas with $72 million in unencumbered capital and nearly $10 million in loan loss reserves.

"Extraco has been committed to the West Bell region for more than a decade, and this significant investment is further evidence of that commitment," said Brown. "With this purchase, we bring the best of Extraco to the doorsteps of all residents in the Greater Fort Hood area. Further, we have added twenty fine folks to our Extraco team."

Extraco offers a unique approach to banking centered on its mission to "touch lives" and deliver a superior experience to customers. This is achieved not only through more personal attention in meeting customer needs, but also in the breadth of product offerings.

Michael Helm, former President and CEO of Heights State Bank, has been named Vice-Chairman of Extraco's regional advisory board. "Extraco is a real plus for Heights customers," said Helm. "This merger significantly increases the bank's ability to meet their growing needs, particularly as they relate to insurance and computer support services."

"We're really excited about the Harker Heights community," said Maxwell. "We have lots of friends here who have been banking with us for years, and serving them from this new location will be a natural fit. Plus, we now have the honor of serving over 5,000 new customers."

Extraco Corporation celebrated 100 years and three generations of family management on July 12, 2002. Founded as a cotton warehousing company, Extraco has evolved to become the largest and most complex independent financial institution in Central Texas with a $10 million loan limit, over 75,000 customers, 275 volunteer community leadership roles and 525 employees. Extraco offers trust, insurance, brokerage, mortgage and technology solutions to complement its traditional bank product line.