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Extraco Banks®: A Decade of Success with Discover® Debit

Author Kimberly Ruiz-Hiller

Almost a decade ago, Extraco Banks – the largest locally owned financial institution in Central Texas – encountered tightening margins and a progressively challenging environment. The pressures faced by Extraco and other community institutions include high interest rates, scrutiny of fees, regulatory uncertainty, and intense competition. To navigate these obstacles and uphold its mission of supporting its customers and communities, Extraco needed to make a change.

“In this environment, every community bank should be looking at their debit relationships and make sure they are optimizing them.”

Misti Mostiller, EVP, Director of Consumer Banking and Enterprise Innovation at Extraco

To improve financial performance, achieve greater flexibility and control, and address interchange and fees, Extraco focused on its primary connection point with customers: its debit program. A 90-day analysis revealed opportunities to boost the bottom line, with economics and dedicated support being key factors behind the decision to switch its debit brand to Discover.

Extraco’s lasting solution

Extraco has seen a measurable economic difference with Discover Debit versus its previous card brand.

Discover Debit helped Extraco Banks achieve a 45% increase in debit’s contribution to its bottom line.

Misti Mostiller, Executive Vice President, Director of Consumer Banking and Enterprise Innovation at Extraco, appreciates the added benefit of saved time. The streamlined, transparent billing statements are a “game changer” in managing and reconciling their portfolio, she said.

Since Extraco first adopted Discover Debit, the economic environment has shifted.

“We’re in a different environment now in terms of customer experience, expectations, and margins,” said Mostiller. “Debit economics were important a decade ago, and they are more important now.”

Commitment to customers and communities

Extraco emphasizes the importance of customer engagement through debit card usage. By encouraging customers to use their debit cards more frequently, it fosters stronger relationships and provides valuable data insights into customer preferences.

“Debit is a window into the customer relationship, and it creates an opening for you to learn so much more about your customers,” said Mostiller.

Focusing on debit has led Extraco to be a best-in-class issuer in key debit performance measures, as defined in the 2024 PULSE Debit Issuer Study. The bank has achieved:

  • A penetration rate of nearly 91%, over 13% higher than the industry average
  • An active rate of nearly 83%, 25% higher than the industry average

The support Extraco receives from Discover further increases engagement and adds value. For example, Discover provides marketing support for Extraco’s Savvy Savings program and Community Cares giving initiative as well as promotes events with customers and local merchants. No-cost features such as dark web monitoring, credit monitoring, and FICO® credit score access backed by Experian make debit more valuable, which helps Extraco keep customers and their needs top of mind.

“In this environment, every community bank should be looking at their debit relationships and make sure they are optimizing them,” said Mostiller. She added of Discover’s partnership, “As a community bank, it’s nice to be treated like you’re much larger, and you have experts that are available to help.”

To learn more about how Extraco Banks boosted its performance and profit with Discover Debit, access the full case study below.