Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2025

Derivative Financial Instruments

Schedule of changes in fair value of derivatives

Changes in the fair value of derivatives are presented in the following table (in thousands).

	Three Months Ended March 31,
	2025		2024
Increase (decrease) in fair value of derivatives during period:
PrimeLending	$	989	$	10,626
Hilltop Broker-Dealers		4,251		(3,945)
Bank		(23)		(11)

Schedule of derivative positions

Derivative positions are presented in the following table (in thousands).

	March 31, 2025				December 31, 2024
	Notional		Estimated		Notional		Estimated
	Amount		Fair Value		Amount		Fair Value
Derivative instruments (not designated as hedges):
IRLCs	$	740,393	$	12,897	$	384,528	$	2,942
Commitments to purchase MBSs		1,191,245		7,106		1,152,841		280
Commitments to sell MBSs		2,251,786		(5,158)		1,954,405		8,577
Interest rate swaps		65,003		2,116		32,000		1,088
Interest rate swaps back-to-back (asset) (1)		42,920		642		24,928		277
Interest rate swaps back-to-back (liability) (1)		42,920		(686)		24,928		(298)
U.S. Treasury bond futures and options (2)		88,804		—		119,200		—
Interest rate and other futures (2)		38,010		—		245,200		—
Credit default swaps		23,000		41		14,000		3
Derivative instruments (designated as hedges):
Interest rate swaps designated as cash flow hedges	$	255,000	$	4,740	$	285,000	$	6,748
Interest rate swaps designated as fair value hedges (3)		377,811		30,116		354,471		36,914

(1) Noted derivative instruments include both customer-facing derivatives as well as offsetting derivatives facing other dealer banks. The fair value of these derivatives include a net credit valuation adjustment that was nominal at March 31, 2025 and December 31, 2024, respectively, reducing the fair value of the liability.

(2) Noted derivative instruments include contracts between the Hilltop Broker-Dealers and PrimeLending and their respective counterparties with changes in fair value of the contracts that are settled daily.

(3) The Company designated $337.8 million and $376.5 million as the hedged amount (from a closed portfolio of prepayable available for sale securities and loans held for investment with a carrying value of $307.6 million and $339.4 million as of March 31, 2025 and December 31, 2024, respectively), of which, a subset of these hedges are in portfolio layer hedging relationships. The cumulative basis adjustment included in the carrying value of the hedged items totaled $30.2 million and $37.1 million as of March 31, 2025 and December 31, 2024, respectively.