Short-term Borrowings

12 Months Ended

Dec. 31, 2024

Short-term Borrowings

Short-term Borrowings

12. Short-term Borrowings

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

	December 31,
	2024		2023
Federal funds purchased	$	407,058	$	459,658
Securities sold under agreements to repurchase		198,418		240,050
Federal Home Loan Bank		—		—
Short-term bank loans		—		—
Commercial paper		228,547		200,330
	$	834,023	$	900,038

Federal Funds Purchased and Securities Sold under Agreements to Repurchase

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.

Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands).

	Year Ended December 31,
	2024			2023			2022
Average balance during the year	$	733,799		$	804,515		$	573,183
Average interest rate during the year		5.36	%		5.53	%		2.19	%
Maximum month-end balance during the year	$	798,149		$	1,341,502		$	741,499
	December 31,
	2024			2023
Average interest rate at end of year		5.06	%		5.60	%
Securities underlying the agreements at end of year:
Carrying value	$	198,174		$	239,103
Estimated fair value	$	214,538		$	262,408

Federal Home Loan Bank (“FHLB”)

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. At December 31, 2024, the Bank had available collateral of $4.3 billion, substantially all of which was blanket collateral. Other information regarding FHLB short-term borrowings is shown in the following table (dollars in thousands).

	Year Ended December 31,
	2024			2023			2022
Average balance during the year	$	—		$	135,274		$	—
Average interest rate during the year		5.62	%		5.10	%		—	%
Maximum month-end balance during the year	$	—		$	500,000		$	—
		December 31,
		2024			2023
Average interest rate at end of year		—	%		—	%

Short-Term Bank Loans

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 December 31, 2024, 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 $200.0 million. There were no outstanding short-term bank loans at December 31, 2024 and 2023.

Commercial Paper

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 were issued under two separate programs, Series 2019-1 CP Notes and Series 2019-2 CP Notes, in maximum aggregate amounts of $300 million and $200 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. 

In December 2024, Hilltop Securities initiated a new commercial paper program, Series 2024-1 CP Notes, the first issuances under this new program are not anticipated until fiscal 2025. Upon the first issuance, no more issuances will be allowed under the Series 2019-1 CP Notes program. However, any amounts outstanding under Series 2019-1 CP Notes will remain outstanding until maturity and then roll into the Series 2024-1 CP Notes program. Until the final maturity of the Series 2019-1 CP Note program, both the Series 2019-1 CP Notes and the 2024-1 CP Notes programs will be managed as a single program. As a results, no more than an aggregate of $300 million combined will be allowed. The terms highlighted above for the Series 2019-1 CP Notes program will not change with issuances under the Series 2024-1 CP Notes. The Series 2019-2 CP program will continue as originally issued.

As of December 31, 2024, the weighted average maturity of the CP Notes was 143 days at a rate of 5.29%, with a weighted average remaining life of 59 days. At December 31, 2024, the aggregate amount outstanding under these secured arrangements was $228.5 million, which was collateralized by securities held for Hilltop Securities accounts valued at $251.2 million.