Securities

6 Months Ended

Jun. 30, 2026

Securities

Securities

4. Securities

The fair value of trading securities is summarized as follows (in thousands).


		June 30,			December 31,
		2026			2025
U.S. Treasury securities		$	—		$	123
U.S. government agencies:
Bonds			34,769			37,222
Residential mortgage-backed securities			101,106			152,343
Collateralized mortgage obligations			27,724			58,611
Other			9,267			—
Corporate debt securities			63,299			41,136
States and political subdivisions			384,132			295,615
Private-label securitized product			21,400			9,547
Other			32,357			22,811
Totals		$	674,054		$	617,408

In addition to the securities shown above, the Hilltop Broker-Dealers enter into transactions that represent commitments to deliver and purchase securities at prevailing future market prices to facilitate customer transactions and satisfy such commitments. Accordingly, the Hilltop Broker-Dealers’ ultimate obligations may exceed the amount recognized in the financial statements. These securities, which are carried at fair value and reported as securities sold, not yet purchased in the consolidated balance sheets, had a value of $90.3 million and $38.0 million at June 30, 2026 and December 31, 2025, respectively.

The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands).


		Available for Sale
		Amortized			Unrealized			Unrealized
June 30, 2026		Cost			Gains			Losses			Fair Value
U.S. government agencies:
Bonds		$	75,977		$	62		$	(467)		$	75,572
Residential mortgage-backed securities			384,699			549			(23,790)			361,458
Commercial mortgage-backed securities			282,006			530			(3,609)			278,927
Collateralized mortgage obligations			677,810			225			(38,941)			639,094
Corporate debt securities ⁽¹⁾			66,015			340			(1,135)			65,220
States and political subdivisions			32,676			25			(2,380)			30,321
Totals		$	1,519,183		$	1,731		$	(70,322)		$	1,450,592

(1)

Certain corporate debt securities associated with merchant bank investments are required to be accounted for under the provisions of the Fair Value Option. As a result, unrealized losses included fair value adjustments of $0.1 million and $0.1 million that were reported as a component of other noninterest income within the consolidated statements of operations for the three and six months ended June 30, 2026, respectively. All other unrealized gains and losses are included as a component of accumulated other comprehensive income or loss on the Company’s consolidated balance sheets.


		Available for Sale
		Amortized			Unrealized			Unrealized
December 31, 2025		Cost			Gains			Losses			Fair Value
U.S. Treasury securities		$	4,998		$	—		$	(55)		$	4,943
U.S. government agencies:
Bonds			81,418			138			(349)			81,207
Residential mortgage-backed securities			411,571			1,553			(22,064)			391,060
Commercial mortgage-backed securities			243,888			830			(4,382)			240,336
Collateralized mortgage obligations			716,201			917			(36,593)			680,525
Corporate debt securities			62,683			613			(1,304)			61,992
States and political subdivisions			33,337			39			(2,391)			30,985
Totals		$	1,554,096		$	4,090		$	(67,138)		$	1,491,048


		Held to Maturity
		Amortized			Unrealized			Unrealized
June 30, 2026		Cost			Gains			Losses			Fair Value
U.S. government agencies:
Residential mortgage-backed securities		$	288,824		$	161		$	(20,586)		$	268,399
Commercial mortgage-backed securities			105,606			109			(6,045)			99,670
Collateralized mortgage obligations			270,179			12			(27,459)			242,732
States and political subdivisions			80,566			97			(4,740)			75,923
Totals		$	745,175		$	379		$	(58,830)		$	686,724


		Held to Maturity
		Amortized			Unrealized			Unrealized
December 31, 2025		Cost			Gains			Losses			Fair Value
U.S. government agencies:
Residential mortgage-backed securities		$	265,349		$	515		$	(18,308)		$	247,556
Commercial mortgage-backed securities			122,636			327			(6,088)			116,875
Collateralized mortgage obligations			262,203			223			(25,577)			236,849
States and political subdivisions			78,141			134			(4,665)			73,610
Totals		$	728,329		$	1,199		$	(54,638)		$	674,890

Additionally, the Company had unrealized net gains of $0.2 million and $0.2 million at June 30, 2026 and December 31, 2025, respectively, from equity securities with fair values of $0.3 million and $0.3 million held at June 30, 2026 and December 31, 2025, respectively. The Company recognized net gains of $0.1 million and net losses of $0.4 million during the three months ended June 30, 2026 and 2025, respectively, and recognized nominal net gains and net losses of $0.4 million during the six months ended June 30, 2026 and 2025, respectively, due to changes in the fair value of equity securities still held at the balance sheet date. During the three and six months ended June 30, 2026 the Company recorded no sales of equity securities, while during the three and six months ended June 30, 2025 the Company recorded net losses of $0.1 million on sales of equity securities.

Information regarding available for sale and held to maturity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands).


		June 30, 2026								December 31, 2025
		Number of					Unrealized			Number of					Unrealized
		Securities		Fair Value			Losses			Securities		Fair Value			Losses
Available for Sale
U.S. treasury securities:
Unrealized loss for less than twelve months		—		$	—		$	—		—		$	—		$	—
Unrealized loss for twelve months or longer		—			—			—		1			4,943			55
		—			—			—		1			4,943			55
U.S. government agencies:
Bonds:
Unrealized loss for less than twelve months		4			32,515			126		2			2,811			6
Unrealized loss for twelve months or longer		13			36,462			341		13			41,004			343
		17			68,977			467		15			43,815			349
Residential mortgage-backed securities:
Unrealized loss for less than twelve months		6			49,892			453		1			11,390			46
Unrealized loss for twelve months or longer		116			225,540			23,337		117			251,643			22,018
		122			275,432			23,790		118			263,033			22,064
Commercial mortgage-backed securities:
Unrealized loss for less than twelve months		6			62,932			433		1			9,893			43
Unrealized loss for twelve months or longer		18			199,857			3,176		18			198,985			4,339
		24			262,789			3,609		19			208,878			4,382
Collateralized mortgage obligations:
Unrealized loss for less than twelve months		14			104,805			1,104		3			21,597			54
Unrealized loss for twelve months or longer		123			511,085			37,837		128			550,788			36,539
		137			615,890			38,941		131			572,385			36,593
Corporate debt securities ⁽¹⁾:
Unrealized loss for less than twelve months		1			6,353			910		1			7,121			829
Unrealized loss for twelve months or longer		1			9,761			225		1			9,743			475
		2			16,114			1,135		2			16,864			1,304
States and political subdivisions:
Unrealized loss for less than twelve months		1			1,028			1		—			—			—
Unrealized loss for twelve months or longer		38			22,359			2,379		40			22,742			2,391
		39			23,387			2,380		40			22,742			2,391
Total available for sale:
Unrealized loss for less than twelve months		32			257,525			3,027		8			52,812			978
Unrealized loss for twelve months or longer		309			1,005,064			67,295		318			1,079,848			66,160
		341		$	1,262,589		$	70,322		326		$	1,132,660		$	67,138

(1)

Certain corporate debt securities associated with merchant bank investments are required to be accounted for under the provisions of the Fair Value Option. As a result, unrealized losses included fair value adjustments of $0.1 million and $0.1 million that were reported as a component of other noninterest income within the consolidated statements of operations for the three and six months ended June 30, 2026, respectively. All other unrealized losses are included as a component of accumulated other comprehensive income or loss on the Company’s consolidated balance sheets.


		June 30, 2026								December 31, 2025
		Number of					Unrealized			Number of					Unrealized
		Securities		Fair Value			Losses			Securities		Fair Value			Losses
Held to Maturity
U.S. government agencies:
Residential mortgage-backed securities:
Unrealized loss for less than twelve months		4		$	47,788		$	809		1		$	11,337		$	2
Unrealized loss for twelve months or longer		45			201,712			19,777		45			214,351			18,306
		49			249,500			20,586		46			225,688			18,308
Commercial mortgage-backed securities:
Unrealized loss for less than twelve months		2			6,280			116		—			—			—
Unrealized loss for twelve months or longer		15			78,962			5,929		20			102,228			6,088
		17			85,242			6,045		20			102,228			6,088
Collateralized mortgage obligations:
Unrealized loss for less than twelve months		3			29,492			199		—			—			—
Unrealized loss for twelve months or longer		50			193,451			27,260		51			206,483			25,577
		53			222,943			27,459		51			206,483			25,577
States and political subdivisions:
Unrealized loss for less than twelve months		6			8,642			61		1			500			—
Unrealized loss for twelve months or longer		161			59,117			4,679		165			60,563			4,665
		167			67,759			4,740		166			61,063			4,665
Total held to maturity:
Unrealized loss for less than twelve months		15			92,202			1,185		2			11,837			2
Unrealized loss for twelve months or longer		271			533,242			57,645		281			583,625			54,636
		286		$	625,444		$	58,830		283		$	595,462		$	54,638

Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. The amortized cost and fair value of securities, excluding trading and equity securities, at June 30, 2026 are shown by contractual maturity below (in thousands).


		Available for Sale						Held to Maturity
		Amortized						Amortized
		Cost			Fair Value			Cost			Fair Value
Due in one year or less		$	22,368		$	22,338		$	485		$	479
Due after one year through five years			88,589			87,673			8,956			8,615
Due after five years through ten years			34,901			33,418			58,992			55,537
Due after ten years			28,810			27,684			12,133			11,292
			174,668			171,113			80,566			75,923

Residential mortgage-backed securities			384,699			361,458			288,824			268,399
Commercial mortgage-backed securities			282,006			278,927			105,606			99,670
Collateralized mortgage obligations			677,810			639,094			270,179			242,732
		$	1,519,183		$	1,450,592		$	745,175		$	686,724

The Company recognized net gains of $33.1 million and $22.8 million from principal transactions during the three months ended June 30, 2026 and 2025, respectively, and net gains of $67.1 million and $52.5 million during the six months ended June 30, 2026 and 2025, respectively. The Company had no other realized gains and losses on securities during the three and six months ended June 30, 2026 and 2025, respectively. All such realized gains and losses are recorded as a component of principal transactions, commissions and fees within the consolidated statements of operations.

Securities with a carrying amount of $0.9 billion and $1.1 billion (with a fair value of $0.8 billion and $1.0 billion, respectively) at June 30, 2026 and December 31, 2025, respectively, were pledged by the Bank to secure public and trust deposits, federal funds purchased and securities sold under agreements to repurchase, and for other purposes as required or permitted by law. Substantially all of these pledged securities were included in the Company’s available for sale and held to maturity securities portfolios at June 30, 2026 and December 31, 2025.

Mortgage-backed securities and collateralized mortgage obligations consist primarily of Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage

Corporation (“FHLMC”) pass-through and participation certificates. GNMA securities are guaranteed by the full faith and credit of the United States, while FNMA and FHLMC securities are fully guaranteed by those respective United States government-sponsored agencies, and conditionally guaranteed by the full faith and credit of the United States.