9. Short-term Borrowings

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Short-term borrowings are summarized as follows (in thousands).

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Federal Funds Purchased and Securities Sold under Agreements to Repurchase

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Federal funds purchased and securities sold under agreements to repurchase generally mature one to ninety days from the transaction date, on demand, or on some other short-term basis. The Bank and the Hilltop Broker-Dealers execute transactions to sell securities under agreements to repurchase with both customers and other broker-dealers. Securities involved in these transactions are held by the Bank, the Hilltop Broker-Dealers or a third-party dealer.

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Information concerning federal funds purchased is shown in the following table (dollars in thousands).

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Information concerning securities sold under agreements to repurchase is shown in the following table (dollars in thousands).

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Federal Home Loan Bank (“FHLB”)

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FHLB short-term borrowings mature over terms not exceeding 365 days and are collateralized by FHLB Dallas stock, nonspecified real estate loans and certain specific commercial real estate loans. Other information regarding FHLB short-term borrowings is shown in the following table (dollars in thousands).

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Short-Term Bank Loans

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The Hilltop Broker-Dealers use short-term bank loans periodically to finance securities owned, margin loans to customers and correspondents, and underwriting activities. Interest on the borrowings varies with the federal funds rate. At June 30, 2026, Hilltop Securities had credit arrangements with two unaffiliated banks, with maximum aggregate commitments of up to $425.0 million. These credit arrangements are used to finance securities owned, securities held for correspondent accounts, receivables in customer margin accounts and underwriting activities. These credit arrangements are provided on an “as offered” basis and are not committed lines of credit. In addition, Hilltop Securities has committed revolving credit facilities with two unaffiliated banks, with aggregate availability of up to $150.0 million. At June 30, 2026, Hilltop Securities had $103.0 million in outstanding borrowings under its credit arrangements and had $30.0 million in outstanding borrowings under its credit facilities. The weighted average interest rate on its borrowings at June 30, 2026 was 4.79%.

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Commercial Paper

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Hilltop Securities uses the net proceeds (after deducting related issuance expenses) from the sale of two commercial paper programs for general corporate purposes, including working capital and the funding of a portion of its securities inventories. The commercial paper notes (“CP Notes”) may be issued with maturities of 14 days to 270 days from the date of issuance. The CP Notes are issued under two separate programs, Series 2019-2 CP Notes and Series 2024-1 CP Notes, in maximum aggregate amounts of $200 million and $300 million, respectively. The CP Notes are not redeemable prior to maturity or subject to voluntary prepayment and do not bear interest, but are sold at a discount to par. The CP Notes are secured by a pledge of collateral owned by Hilltop Securities.

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As of June 30, 2026, the weighted average maturity of the CP Notes was 191 days at a rate of 4.93%, with a weighted average remaining life of 91 days. At June 30, 2026, the aggregate amount outstanding under these secured arrangements was $246.6 million, which was collateralized by securities held for Hilltop Securities accounts valued at $270.1 million.