Securities

12 Months Ended

Dec. 31, 2025

4. Securities

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


	December 31,
	2025			2024
U.S. Treasury securities	$	123		$	2,553
U.S. government agencies:
Bonds		37,222			9,984
Residential mortgage-backed securities		152,343			35,440
Collateralized mortgage obligations		58,611			125,515
Other		—			19,877
Corporate debt securities		41,136			60,594
States and political subdivisions		295,615			244,076
Private-label securitized product		9,547			16,208
Other		22,811			10,669
Totals	$	617,408		$	524,916

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 obligation 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 $38.0 million and $57.2 million at December 31, 2025 and 2024, 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
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 ⁽¹⁾		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

(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 include a fair value adjustment of $0.8 million that is reported as a component of other noninterest income within the consolidated statements of operations for the year ended December 31, 2025. 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, 2024	Cost		Gains		Losses		Fair Value
U.S. Treasury securities	$	4,991	$	—	$	(229)	$	4,762
U.S. government agencies:
Bonds		112,293		214		(639)		111,868
Residential mortgage-backed securities		379,651		35		(38,500)		341,186
Commercial mortgage-backed securities		226,326		161		(6,160)		220,327
Collateralized mortgage obligations		710,663		328		(53,391)		657,600
Corporate debt securities		30,139		215		(538)		29,816
States and political subdivisions		34,352		10		(3,372)		30,990
Totals	$	1,498,415	$	963	$	(102,829)	$	1,396,549


		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


		Held to Maturity
		Amortized			Unrealized			Unrealized
December 31, 2024		Cost			Gains			Losses			Fair Value
U.S. government agencies:
Residential mortgage-backed securities		$	255,880		$	—		$	(31,621)		$	224,259
Commercial mortgage-backed securities			147,696			—			(10,688)			137,008
Collateralized mortgage obligations			257,230			—			(38,269)			218,961
States and political subdivisions			77,093			32			(7,481)			69,644
Totals		$	737,899		$	32		$	(88,059)		$	649,872

Additionally, the Company had unrealized net gains of $0.2 million and $0.2 million at December 31, 2025 and 2024 from equity securities with fair values of $0.3 million and $0.3 million at December 31, 2025 and 2024, respectively. The Company recognized net losses of $0.4 million and nominal net losses during 2025 and 2024, respectively, due to changes in the fair value of equity securities still held at the balance sheet date. During 2025, the Company recorded net losses of $0.4 million, while during 2024, net gains recognized from equity securities sold were nominal.

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).


		December 31, 2025								December 31, 2024
		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			4,762			229
		1			4,943			55		1			4,762			229
U.S. government agencies:
Bonds:
Unrealized loss for less than twelve months		2			2,811			6		5			32,699			54
Unrealized loss for twelve months or longer		13			41,004			343		14			63,719			585
		15			43,815			349		19			96,418			639
Residential mortgage-backed securities:
Unrealized loss for less than twelve months		1			11,390			46		20			56,122			1,384
Unrealized loss for twelve months or longer		117			251,643			22,018		107			283,691			37,116
		118			263,033			22,064		127			339,813			38,500
Commercial mortgage-backed securities:
Unrealized loss for less than twelve months		1			9,893			43		3			34,539			70
Unrealized loss for twelve months or longer		18			198,985			4,339		20			197,203			6,090
		19			208,878			4,382		23			231,742			6,160
Collateralized mortgage obligations:
Unrealized loss for less than twelve months		3			21,597			54		2			9,944			146
Unrealized loss for twelve months or longer		128			550,788			36,539		132			629,089			53,245
		131			572,385			36,593		134			639,033			53,391
Corporate debt securities ⁽¹⁾:
Unrealized loss for less than twelve months		1			7,121			829		1			9,271			538
Unrealized loss for twelve months or longer		1			9,743			475		—			—			—
		2			16,864			1,304		1			9,271			538
States and political subdivisions:
Unrealized loss for less than twelve months		—			—			—		4			1,919			9
Unrealized loss for twelve months or longer		40			22,742			2,391		52			24,916			3,363
		40			22,742			2,391		56			26,835			3,372
Total available for sale:
Unrealized loss for less than twelve months		8			52,812			978		35			144,494			2,201
Unrealized loss for twelve months or longer		318			1,079,848			66,160		326			1,203,380			100,628
		326		$	1,132,660		$	67,138		361		$	1,347,874		$	102,829

(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 includes a fair value adjustment of $0.8 million that is reported as a component of other noninterest income within the consolidated statements of operations for the year ended December 31, 2025. All other unrealized losses are included as a component of accumulated other comprehensive income or loss on the Company’s consolidated balance sheets.

		December 31, 2025								December 31, 2024
		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		1		$	11,337		$	2		—		$	—		$	—
Unrealized loss for twelve months or longer		45			214,351			18,306		45			224,258			31,621
		46			225,688			18,308		45			224,258			31,621
Commercial mortgage-backed securities:
Unrealized loss for less than twelve months		—			—			—		—			—			—
Unrealized loss for twelve months or longer		20			102,228			6,088		26			137,009			10,688
		20			102,228			6,088		26			137,009			10,688
Collateralized mortgage obligations:
Unrealized loss for less than twelve months		—			—			—		—			—			—
Unrealized loss for twelve months or longer		51			206,483			25,577		53			218,961			38,269
		51			206,483			25,577		53			218,961			38,269
States and political subdivisions:
Unrealized loss for less than twelve months		1			500			—		8			4,305			24
Unrealized loss for twelve months or longer		165			60,563			4,665		169			62,113			7,457
		166			61,063			4,665		177			66,418			7,481
Total held to maturity:
Unrealized loss for less than twelve months		2			11,837			2		8			4,305			24
Unrealized loss for twelve months or longer		281			583,625			54,636		293			642,341			88,035
		283		$	595,462		$	54,638		301		$	646,646		$	88,059

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 December 31, 2025 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		$	31,360		$	31,364		$	—		$	—
Due after one year through five years			82,020			81,296			7,419			7,160
Due after five years through ten years			37,258			36,010			58,400			55,357
Due after ten years			31,798			30,457			12,322			11,093
			182,436			179,127			78,141			73,610

Residential mortgage-backed securities			411,571			391,060			265,349			247,556
Commercial mortgage-backed securities			243,888			240,336			122,636			116,875
Collateralized mortgage obligations			716,201			680,525			262,203			236,849
		$	1,554,096		$	1,491,048		$	728,329		$	674,890

During 2025, 2024 and 2023, the Company recognized net gains from principal transactions of $140.3 million, $153.6 million and $141.4 million, respectively. During 2025, 2024 and 2023 the Company had no other realized gains and losses on securities. All such net 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 $1.1 billion and $563.9 million (with a fair value of $1.0 billion and $520.0 million, respectively) at December 31, 2025 and 2024, 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 December 31, 2025 and 2024.

Mortgage-backed securities and collateralized mortgage obligations consist principally of 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.

Hilltop Holdings Inc. 10-K