The URL can be used to link to this page

Item 3B3 - Monthly Financial ReportCITY OF S0UTHLA1<4,,E MONTHLY FINANCIAL REPORT or— 11 1 April 2023 PERFORMANCE AT A GLANCE Year to Date 3 year Trend Reference 7G...,.I.FundVs. Rev. Positive Positive Page 3 (2 months prior activity) Positive Positive Page 3 Property Tax Revenue Positive Positive Page 4 Permit Revenues Positive Positive Page 4 Departmental Expenditures Summary Positive Positive Page 5 Positive = Positive variance or negative variance <1 % compared to seasonal trends. Warning = Negative variance of 14% compared to seasonal trends Negative = Negative Variance of > 4% compared to seasonal trends. City of Southlake Monthly Financial Report 1 5/10/2023 ECONOMIC INDICATORS NATIONAL ECONOMY 1.10, DP is defined as the output of goods and services oduced by labor and property located in the United ates, The Bureau of Labor and Economic Analysis ported that the advance estimated GDP for the1st carter of 2023 increased at a rate of 1.1 %. In the 4th carter of 2022, GDP increased at a rate of 2.6%. V -0.8% Housing starts in March were at a seasonally adjusted rate of 1,420,000, which is 0.8% below the revised previous month figure of 1,432,000. UNEMPLOYMENT RATES National: V 3.4% The National Unemployment rate for April 2023 slight decrease to 3.4% when compared to 3.5% in March State-wide: V 4.0% The Texas Unemployment rate for March 2023 (preliminary) remained unchanged at 4.0% from February 2023. $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 Fa FINANCIAL ACTIVITY DFW Area: V 3.9% 1 2019* 2020* 2021* 2022* The Dallas/Fort Worth/Arlington Metropolitan Area *October - April ■ New Construction permit values unemployment rate for March 2023 (preliminary) decreased slightly to 3.9% when compared to 4.1 % in February 2023 rl 2023* City of Southlake Monthly Financial Report 2 5/10/2023 GENERAL FUND OVERALL FUND PERFORMANCE: GENERAL FUND REVENUE VS EXPENDITURES 2022 FY 2023 FY 2023 $18,000,000 REVENUE EXPENDITURE VARIANCE FY 2023 REVENUE FY 2023 EXPENDITURE 2022 EXPEND. Oct $ 604,909 $ 2,824,040 $ (2,219,131) $16,000,000 Nov $ 2,466,143 $ 3,685,749 $ (1,219,606) $14,000,000 Dec $ 7,240,751 $ 4,390,002 $ 2,850,749 Jan $ 15,429,638 $ 3,413,662 $ 12,015,976 $12,000,000 Feb $ 10,368,200 $ 3,355,416 $ 7,012:714 $10,000,000 Mar $ 2,797,920 $ 3,506,641 $ (708721) Apr $ 2,271,184 $ 3,847,278 $ (1,576,094) $8,000,000 May $ - $ - $ Jun $ $ $ $6,000,000 — — Jul $ $ $ $4,000,000 — — Aug $ $ $ Sep $ $ $ $2,000,000 d1—d Tot $ 41,178,745 $ 25,022,788 $ 16,155,957 $_ T _ Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CHART OUTLOOK: I POSITIVE The outlook for the year is positive as overall revenues and expenditures are on target with budget. The revenues are higher than expenditures by approximately $16.2M. The significant variance is due to the significant portion of property tax revenue collected (approximately 94%) of the budgeted property tax revenue which is the largest revenue sources for the general fund. REVENUE ANALYSIS GENERAL FUND SALES TAX 2023-2021 COMPARISON FY 2023 FY 2022 FY 2021 FY 2023 � FY 2022 FY 2021 Oct $ 1,814,981 $ 1,613,415 $ 1,299,576 $3,000,000 Nov $ 1,813,575 $ 1,652,674 $ 1,084,677 Dec $ 2,507,299 $ 2,456,532 $ 1,926,407 $2,500,000 Jan $ 1,539,514 $ 1,602,323 $ 1,256,119 Feb $ 1,436,621 $ 1,388,859 $ 978,395 $2,000,000 ' Mar $ 1,836,177 $ 1,975,175 $ 1,727,925 ,. Apr $ - $ 1,714,270 $ 1,470,896 $1,500,000 — May $ - $ 1,725,777 $ 1,262,973 Jun $ $ 1,792,755 $ 2,586,036 $1,000,000 Jul $ - $ 1,607,427 $ 1,449,136 Aug $ $ 1,659,141 $ 1,427,525 $500,000 Sep $ $ 1,640,639 $ 1,687,605 Tot $ 10,948,167 $ 20,828,987 $ 18,157,270 $- Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CHART OUTLOOK: POSITIVE Year to date sales tax collections are trending above FY 2022 (2.4%) and FY 2021 (32.3%) collections. However, March collections were 7.0% lower than March collections for FY 2022. Year to date collections are above budget for the year therefore the outlook is considered positive. Staff will continue to closely monitor collections. City of Southlake Monthly Financial Report 3 5/10/2023 M I GENERAL FUND REVENUE ANALYSIS (continued) PROPERTY TAX 3 YEAR TREND FY 2023 FY 2022 FY 2021 ■ FY 2023 ■ FY 2022 FY 2021 Oct $ 380,169 $ 653,703 $ 778,578 $14,000,000 Nov $ 2,011,080 $ 2,017,203 $ 1,582,957 $12,000,000 Dec $ 4,964,620 $ 6,068,454 $ 6,036,699 $10,000,000 Jan $ 12,756,146 $ 11,588,414 $ 13,167,125 $8,000,000 Feb $ 6,290,070 $ 5,872,247 $ 4,445,041 $6,000,000 Mar $ 560,775 $ 584,684 $ 411,151 Apr $ 221,968 $ 554,247 $ 259,058 $4,000,000 May $ - $ 151,717 $ 152,945 ' $2,000,000 .. Jun $ $ 502,344 $ 389,839 $- Jul * $ - $ (1,310,741) $ (1,365,991) $(2,000,000) Oct Nov Dec Jan Feb Mar Apr May Jun Aug Aug $ $ 69,630 $ 52,655 $(4,000,000) Sep $ $ 111,205 $ 190,848 Tot $ 27,184,828 $ 26,863,107 $ 26,100,905 * Net transfer of TIF revenues to TIF CHART OUTLOOK: POSITIVE fund As of April the 2023 YTD property tax collections ($27,184,828) are approximately 0.56% less than 2022 YTD ($27,338,952) and 1.89% higher than 2021 YTD ($26,680,609). As indicated on the chart, the majority of the property tax revenue is collected in the second quarter of the fiscal year. YTD collections are trending below budget. PERMIT REVENUE 2023-2021 COMPARISON FY 2023 FY 2022 FY 2021 FY 2023 FY 2022 FY 2021 Oct $ 137,332 $ 214,445 $ 50,043 $900,000 Nov $ 118,803 $ 185,109 $ 69,734 Dec $ 88,212 $ 94,663 $ 102,515 $800,000 Jan $ 231,884 $ 167,045 $ 88,737 $700,000 Feb $ 249,097 $ 111,545 $ 76,270 Mar $ 98,675 $ 154,046 $ 150,142 $600,000 Apr $ 77,670 $ 277,691 $ 124,870 $500,000 May $ - $ 788,270 $ 136,364 $400,000 Jun $ $ 133,244 $ 158,786 Jul $ - $ 192,902 $ 170,985 $300,000 Aug $ $ 184,578 $ 217,599 $200,000 - Sep $ Tot $ 1,001,673 $ 154,833 $ $ 2,658,371 $ 221,982 1,568,027 $100,000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CHART OUTLOOK: POSITIVE The value of new construction permits ($84.2M+) issued for FY 2023 YTD is approximately 2.1 % less than FY 2022 and 48.4% higher than FY 2021 permit values. FY 2023 YTD permit revenue is 16.8% below and 51.2% higher when compared to FY 2022 and 2021, respectively. The permit revenue year to date is trending above budget therefore the outlook is considered positive. City of Southlake Monthly Financial Report 4 5/10/2023 EXPENDITURE ANALYSIS DEPARTMENTAL EXPENDITURES SUMMARY FY 2023 ACTUAL FY 2022 ACTUAL YTD FY 2023 BUDGET FY 2022/2023 YTD YTD (APRIL) (APRIL) YTD (APRIL) VARIANCE BUDGET VARIANCE FY 2023 % SPENT CIVIC) $ 593,641 $ 592,457 $ 551,158 $ 1,184 $ (42,483) 107.71% COMM $ 360,875 $ 291,022 $ 376,514 $ 69,853 $ 15,639 95.85% CS $ 3,441,286 $ 3,074,964 $ 3,524,452 $ 366,322 $ 83,166 97.64% CSO $ 326,320 $ 302,103 $ 333,922 $ 24,217 $ 7,602 97.72% DPS $ 10,951,299 $ 10,498,585 $ 10,933,464 $ 452,714 $ (17,835) 100.16% ED $ 183,943 $ 171,970 $ 182,497 $ 11,973 $ (1,446) 100.79% FIN $ 1,619,838 $ 1,451,603 $ 1,632,436 $ 168,235 $ 12,598 99.23% HR $ 516,450 $ 436,737 $ 495,355 $ 79,713 $ (21,095) 104.26% IT $ 1,767,270 $ 1,934,439 $ 2,191,095 $ (167,169) $ 423,825 80.66% PDS $ 1,322,659 $ 1,186,168 $ 1,291,137 $ 136,491 $ (31,522) 102.44% PW $ 2,742,227 $ 2,355,159 $ 2,600,280 $ 387,068 $ (141,947) 105.46% SS $ 1,196,980 $ 1,090,684 $ 1,657,198 $ 106,296 $ 460,218 72.23% Totals $ 25,022,788 $ 23,385,891 $ 25,769,508 $ 1,636,897 $ 746,720 97.10% FY 2023 ACTUAL YTD (APRIL) FY 2022 ACTUAL YTD (APRIL) FY 2023 BUDGET YTD (APRIL) $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 I $2,000,000 ■■ $- CMO COMM CS CSO DPS ED FIN HR IT PDS PW SS CHART OUTLOOK: I POSITIVE As indicated above, 2023 expenditures are above 2022 expenditures for the same period with a increase of 7.0%. The outlook is positive expenditures are below budgeted expenditures for the fiscal year. MF- City of Southlake Monthly Financial Report 5 5/10/2023 EXPERIENCE SOUTHLAKE April 25, 2023 The Marq Financial Review MARQ 75.05% 59.90% I 12530% Target ATT 1DI112D22 913O12U23 cc 81.92% 6720% 121.91 % Target ATT CEDC FINANCIAL DASHBOARD as ar.4r2WO2312-41 PM LH 48.52% 33.50% 144.84% Target ATT 2.39M 3.18M 2.07M 2.53M 317.76K 654.88K Revenue Eq>ense Revenue Expense Revenue Expense Net Revenue- Current & Previous Year CCR 0 [AR —Trial Revenue LY 350K 58K �. .... 300K 250K ■ 2EK _ 200K 150K 250K 30OK 302K 293K 302K 281K Zl3HC 318K 21CK 318K 275K 2Ea1K 228K 100K 50K OK Apr2072 Wy2022 Jn2022 Jul= Aug2022 Sep20Y2 Ot20Q2 Nw2022 Dw2M Jn2O23 Fffib2M hbr2M Apr2O23 The Marq Rentals Revenue (Net) *CGReffht4b LHAlefdaI-R—e WKK WKK 30K 20K 10K OK Apr 2022 May2022 Jn 2022 Ad 2O22 Aug 2022 Sep 2022 Od 2022 Nw 2O22 Dec 2O22 Jai 2023 Feb 2O23 U-2023 Apr2023 The Marq Membership Revenue (Net) 250K 200K 150K 1 DOK 50K OK Apr2022 May 2022 Jun 2O22 Ju12022 Aug 2022 Sep 2022 Oc[2022 Nor 2D22 Dec 2022 .Un2023 Feb2023 Ma2O23 Apr 2023 CHAMPIONS CLUB MEMBERSHIP TRENDS mm 3500 3000 N 2605 Q N m 2500 2527 250 m 2000 1955 1968 1958 1956 ""'l 1941 1945 1944 1500 3365 3371 3413 3291 3230 3131 3197 3153 3162 3076 2989 I / 2827 2679 2738 2662 I 2506 2513 2521 2585 / / I - 2458 I / /I 444 2289 1000 1 1 1 1 1 1 1 1 1 1 1 a m i M (fl r- M O O N N M'T M CO rl- M O N N Mzj- M CO r- 00 M O N N M O O O O O O O O O O N N N N N N N N N N N N M M M N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N Period m 800 700 600 N 500 .N m 400 can 300 200 100 lus MULTI -YEAR MEMBERSHIPS ANALYSIS BY MEMBERSHIP TYPE 1200 3000 1000 931 804 780 800 2000 588 565 600 479 — \ � 379 ,424 403 441 1000 400 224 274 / 291 200 112 82 201157 197 1169 86 0 ,4 qk ' 6 0 -200 1 -140 66 1241 , 165156 1 L -117 64 -1000 -400 -36 6 -334 ,-297266 4141A -410 -391 -384 -soo -5ss -2000 -800 -700 -698 -761 -1000 JOINS TERMS JOINS TERMS JOINS TERMS JOINS TERMS -3000 FY2020 FY2021 FY2022 FY2023 ADULT 379 -360 588 -410 780 -568 403 -297 FAM 224 -414 424 -334 565 -391 291 -266 FAM-NC 479 -700 804 -698 931 -761 441 -384 SENIOR 112 -140 201 -124 274 -165 169 -117 YOUTH 82 -66 157 -115 197 -156 86 -64 TOTALS 1276 -1680 2174 -1681 2747 -2041 1390 -1128 NET -404 493 706 262 ADULT FAM FAM-NC SENIOR YOUTH TOTALS NET FY2023 CC Membership Terminations by Reason and by Month 100 94 1 82 80 7 3 6 60 40 20 000000 0 Failed Payment r.Oct-22 71 r. Nov-22 94 m Dec-22 81 r. Jan-23 67 r. Feb-23 82 r. Mar-23 73 .Apr-23 0 r. May-23 0 r. Jun-23 0 Jul-23 0 .Aug-23 0 iiiiiiiiiiiiiiSep-23 0 Totals 468 % 41.5% Top Reason Given: "I am too busy." 192121 17 ai■00000 0 Not Utilizing Membership f7elocatingffravel Transfer Unsatisfied with Facility or selected other service Na Reason +' Other Amenities provider 54 25 22 3 5 19 29 16 19 2 5 21 29 19 23 3 1 21 36 50 30 4 6 12 41 21 28 3 1 17 37 26 18 4 1 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 226 157 140 19 19 99 20.0% 13.9% 12.4% 1.7% 1.7% 8.8% EXPERIENCE SOUTHLAKE Three Year Revenue Comparison by Month $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 5 ■ FISCAL YEAR 2021 FISCAL YEAR 2022 Fiscal Year 2023 EXPERIENCE SOUTHLAI<,.,.,E INVESTMENT REPORT City of Southlake January 1 to March 31, 2023 Hilltop Securities J�* Contents Investment Management Team Scott McIntyre Market Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Senior Portfolio Manager 572.481.2009 Investment Officers'Certification ...........................4 Scott.McIntyre@HilltopSecurities.com Portfolio Overview....................................5 Portfolio Overview....................................6 Greg Warner Senior Portfolio Manager Asset Allocation......................................7 572.487.2072 Credit Rating Summary 8 Greg.Warner@HilltopSecurities.com Benchmark Comparison.................................9 Fund Overview.....................................10 Jodi Jones Investment Reporting Manager Detail of Security Holdings..............................11 572.487.2076 Jodi.Jones@HilltopSecurities.com Famed Income.....................................12 Investment Transactions................................13 Investment Transactions Totals ............................14 Amortization and Accretion .............................15 Projected Cash Flows..................................16 Projected Cash Flows Totals..............................17 Disclosures & Disclaimers...............................18 Page 2 Hilltop Securities J�* Market Recap As the calendar turned to March investors were still digesting the stronger -than -expected January data released throughout the month of February. The first day of March brought the ISM manufacturing survey which remained in contraction but posted the first increase in six months to 47.7. But it was the prices paid component climbing from 44.5 to 51.3 that raised alarm bells and sparked another bout of inflation fears. A few days later, during his semi-annual testimony before Congress, Fed Chair Powell, sounding very hawkish, pointed to still tight labor markets and stubborn inflation as reasons the FOMC would need to raise rates further and keep them there for longer. Investors concluded the Fed might need to hike another 100 basis points in order to curtail demand and bring inflation back to its +2.0% target.The two-yearTreasury note yield climbed above 5% for the first time in nearly 16 years, peaking at 5.07% on March 81" That same day, Silicon Valley Bank (SVB) announced it had taken a $1.8 billion loss as it liquidated positions from its $21 billion portfolio of mostly full -faith -and -credit U.S. Treasury securities.The sudden decision to realize such a massive loss signaled that SVB was in trouble. Panicked depositors tried to withdraw $142 billion over a two-day period, representing 85% of the bank's total deposits. On Friday, March 10t", with SVB illiquid, unable to pay depositors and on the verge of collapse, the FDIC assumed control, resulting in the second largest bank failure in U.S. history.Two days later, New York's Signature Bankwas closed. Markets made the assumption that these weren't the only financial institutions with large fixed income portfolios that had suffered significant market losses as a result of Fed rate hikes and were vulnerable to a run on deposits. Fears of contagion ran rampant. As a result, bond yields plunged as depositors withdrew their funds from banks and moved into money market funds and the safe harbor of government bonds. Markets quickly concluded that tighter credit conditions would slow the economy rapidly in the months ahead. Hoping to limit the damage, theTreasury Department announced that all depositors at the failed banks would be covered by the FDIC, and the Fed implemented an emergency City of Southlake As of March 31, 2023 lending facility.These actions did stem the tide, but the damage to the outlook was done. Government bond markets were wildly volatile in the wake of the bankfailures. After topping 5% in early March, the two-year Treasury yield would plunge 150 basis points, trading as low as 3.58%. Fed funds futures would go from expecting another 100 basis points of rate hikes to expecting 100 basis points of rate cuts. Economic data released during March was largely ignored, though the February employment report, CPI and retail sales all moderated from January's surge. The softer data sapped the Fed's urgency and added weight to the yield declines. Nonetheless, the FOMC did raise the fed funds target another 25 basis points at its March 22nd meeting, taking the upper bound to 5.00%. Chair Powell opened the door for a pause in May if the data were to support it, but the inflation battle remains the committee's top priority. The economic outlook hasn't been remotely clear in years, but it's only grown cloudier. Analysts believe banking concerns will ultimately restrain credit conditions and increase the odds of recession, but the U.S. economy continues to expand, and inflation remains extremely elevated. The Fed's target rate is now at a 16-year high and the FOMC's updated "dot plot"showed one more 25 basis point hike in May, before holding steady through the remainder of the year. The bond market has parted company with Fed officials and is now signaling, through dramatically lower yields, that tightening is complete, and easing is on the near horizon. Page 3 Hilltop Securities J�* Investment Officers'Certification This report is prepared for the City of South lake (the "Entity) in accordance with Chapter 2256 of the Texas Public Funds Investment Act ("PFIA"). Section 2256.023(a) of the PFIA states that: "Not less than quarterly, the investment officer shall prepare and submit to the governing body of the entity a written report of the investment transactions for all funds covered by this chapter for the preceding reporting period." This report is signed by the Entity's investment officers and includes the disclosures required in the PFIA. The investment portfolio complied with the PFIA and the Entity's approved Investment Policy and Strategy throughout the period. All investment transactions made in the portfolio during this period were made on behalf of the Entity and were made in full compliance with the PFIA and the approved Investment Policy. City of Southlake As of March 31, 2023 Investment Officers Nicole Bradshaw Nicole Bradshaw Deputy Director of Finance Sharen Jackson Sharen Jackson Chief Financial Officer Page 4 Hilltop Securities J�* Portfolio Overview Portfolio Summary ParValue 175,507,637.21 182,959,607.04 Original Cost 175,512,184.45 183,035,407.92 BookValue 175,373,937.99 182,941,806.31 Market Value 173,897,310.01 182,000,458.29 Accrued Interest 116,298.62 138,403.65 BookValue Plus Accrued 175,490,236.62 183,080,209.96 Market Value Plus Accrued 174,013,608.63 182,138,861.94 Net Unrealized Gain/(Loss) (1,476,627.98) (941,348.02) Asset Allocation ■ AGCY 5.46% ■ AGCY CALL 5.45% ■ CP 8.15% ■ LGIP64.49% ■ MUNI3.88% ■ US GOVT 12.56% City of Southlake January 1, 2023 - March 31, 2023 Income Summary Portfolio Characteristics Interest Income 1,429,352.91 Yield to Maturity 2.915% 3.547% Net Amortization/Accretion 115,898.49 Yield to Worst 2.915% 3.547% Realized Gain/(Loss) 0.00 Days to Final Maturity 95 57 Net Income 1,545,251.40 Days to Effective Maturity 95 57 Duration 0.58 0.42 Transaction Summary Quantity PrincipalTransactionType .. l Amount Realized Gain/Loss Maturity (12,000,000.00) 12,000,000.00 0.00 12,000,000.00 0.00 Coupon 0.00 0.00 113,506.94 113,506.94 0.00 Page 5 Hilltop Securities J�* Portfolio Overview Maturity Distribution by Security Type ■ AGCY 5.46% In AGCY CALL 5.45% ■ CP 8.15% ■ LGIP 64.49% ■ MUNI3.88% USGOT 12.56% Top Ten Holdings City of Southlake As of March 31, 2023 TEXPOOL 32.33% 75% United States Department of The Treasury 12.56% 64.5 TEXSTAR 10.80% TXCLASS 7.39% 50% LONESTRGOV 7.14% LONESTRCRP 6.83% 25°'n Federal Farm Credit Banks Funding Corporation 5.46% 15.0 71 8.2 Federal Home Loan Banks 5.45% 2.7 2.5 Texas A&M University System Board of Regents 3.88% 0°k �oc`os �ea�5 �ea�s �Qa�S �ea�s Toyota Motor Credit Corporation 2.72% Q��A �ocrs �oo`�s �oc`Os 4, 4ch Maturity Distribution by Security Type SecurityType Overnight 0-3 Months 3-6 Months 6-9 Months 9-12 Months 1-2Years; 2-3 Years 3-4Years 4-5Years Port.. AGCY — 4,998,515.97 4,995,613.07 — 9,994,129.03 AGCY CALL — — 5,000,000.00 4,976,724.39 — — 9,976,724.39 CID 14,905,520.83 — 14,905,520.83 LGIP 117,974,607.04 — — — — 117,974,607.04 MUNI — 2,514,384.65 — 4,592,728.15 7,107,112.80 US GOVT — 5,000,010.02 12,989,966.98 4,993,735.22 — — 22,983,712.22 Total 117,974,607.04 27,418,431.47 12,989,966.98 14,989,348.29 4,976,72439 4,592,72&15 — — — 182,941,80631 Hilltop Securities J�* Asset Allocation Asset Allocation by Security Type as of 31-Dec-2022 ■ AGCY 5.70% ■ AGCY CALL 5.69% ■ CP 11.26% ■ LGIP 56.18% ■ MUNI4.08% ■ US GOVT 17.09% Book Value Basis Security Distribution City of Southlake As of March 31, 2023 Asset Allocation by Security Type as of 31-Mar-2023 ■ AGCY 5.46% ■ AGCY CALL 5.45% ■ CP8.15% ■ LGIP64.49% ■ MUNI3.88% ■ US GOVT 12.56% AGCY 9,990,525.33 5.70% (0.23%) 9,994,129.03 5.46% 0.408% AGCY CALL 9,970,540.76 5.69% (0.23%) 9,976,724.39 5.45% 2.472% CP 19,754,581.94 11.26% (3.12%) 14,905,520.83 8.15% 3.997% LGIP 98,522,637.21 56.18% 8.31% 117,974,607.04 64.49% 4.666% MUNI 7,160,352.78 4.08% (0.20%) 7,107,112.80 3.88% 0.351% US GOVL 29,975,299.97 17.09% (4.53%) 22,983,712.22 12.56% 0.332% Portfolio Total 175,373,937.99 100.00% 182,941,806.31 100.000/0 3.547% Page 7 Hilltop Securities J�* Credit Rating Summary Rating Distribution Local Government Investment Pools & Money Market Funds AAA 117,974,607.04 64.49% Total Local Government Investment Pools & Money Market Funds 117,974,607.04 64.49% Short Term Rating Distribution A-1+ 9,938,845.83 5.43% A-1 4,966,675.00 2.71% Total Short Term Rating Distribution 14,905,520.83 8.15% Long Term Rating Distribution AAA 50,061,678.44 27.36% Total Long Term Rating Distribution 50,061,678.44 2736% PortfolioTotal 182,941,806.31 100.000/0 City of Southlake As of March 31, 2023 Allocation by Rating ■ A-1+5.43% ■ A-12.71% ■ AAA91.85% Hilltop Securities J�* Benchmark Comparison - City of Southlake 6 Month CMT - 1 Year CMT TexPool 2.00% City of Southlake As of March 31, 2023 0.00% Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 0ct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Yield Overview City of Southlake 6 Month CMT 1 Year CMT TexPool 0.09 0.09 0.08 0.09 0.09 0.09 0.11 0.13 0.16 0.16 0.21 0.29 0.44 059 0.79 1.10 1.49 1.91 2.23 2.64 2.92 3.23 3.38 355 0.07 0.06 0.05 0.05 0.05 0.05 0.05 0.06 0.07 0.12 0.21 0.34 0.54 0.78 1.12 1.55 1.96 2.43 2.93 3.45 3.87 4.20 4.50 4.72 0.12 0.11 0.10 0.09 0.09 0.08 0.08 0.09 0.10 0.14 0.21 0.32 0.47 0.64 0.85 1.10 1.37 1.68 2.05 2.42 2.79 3.15 3.45 3.73 0.01 0.01 0.01 0.02 0.02 0.03 0.04 0.04 0.04 0.04 0.06 0.15 0.30 0.62 1.00 1.52 2.16 2.41 2.93 3.61 3.98 4.24 4.50 4.61 Hilltop Securities J�* Fund Overview General Operating City of Southlake January 1, 2023 - March 31, 2023 or bOOK Value mor MarKet Value _ Value Lurrent bOOK Value Lurrent MarKet Value IVet Income nays to FInaI Mty Y I Ivl Y I W Total 175,373,937.99 173,897,310.01 8,103,148.28 182,941AM31 182,000,458.29 1,545,251.40 57 3.547% 3.547% Page 10 Hilltop Securities J�* Detail of Security Holdings General Operating City of Southlake As of March 31, 2023 LNSTCRP LGIP LoneStarCorpO/N 03/31/23 12,497,825.14 100.000 12,497,825.14 12,497,825.14 100.000 12,497,825.14 1 4.841 4.841 AAA LNSTGOV LGIP LoneStarGovO/N 03/31/23 13,064,662.59 100.000 13,064,662.59 13,064,662.59 100.000 13,064,662.59 1 4.640 4.640 AAA TEXPOOL LGIP TexPool 03/31/23 59,142,705.62 100.000 59,142,705.62 59,142,705.62 100.000 59,142,705.62 1 4.611 4.611 AAA TEXSTAR LGIP TexSTAR 03/31/23 19,755,454.23 100.000 19,755,454.23 19,755,454.23 100.000 19,755,454.23 1 4.607 4.607 AAA TXCLASS LGIP Texas CLASS 03/31/23 13,513,959.46 100.000 13,513,959.46 13,513,959.46 100.000 13,513,959.46 1 4.860 4.860 AAA 912828ZH6 10/14/21 USGOVT UNITED STATES TREASURY 0.250 04/15/23 5,000,000.00 100.008 5,000,390.65 5,000,010.02 99.859 4,992,968.75 15 0.245 0.245 AAA Toyota Motor Credit 89233HSC9 08/22/22 CP 0.000 05/12/23 5,000,000.00 97.392 4,869,595.83 4,979,670.83 99.435 4,971,735.00 42 3.650 3.650 A-1+ Corporation BOARD OF REGENTS 8821356WI 10/28/20 MUNI TEXAS A & M UNIVERSITY 5.000 05/15/23 05/15/23 Pre -Re 2,500,000.00 112.026 2,800,650.00 2,514,384.65 100.243 2,506,075.00 45 45 0.260 0.260 AAA SYSTEM 46640QT27 09/08/22 CP J.P. Morgan Securities LLC 0.000 06/02/23 5,000,000.00 97.130 4,856,487.50 4,966,675.00 99.113 4,955,665.00 63 3.965 3.965 A-1 78009BT93 09/15/22 CP Royal Bank of Canada 0.000 06/09/23 5,000,000.00 96.840 4,842,025.00 4,959,175.00 99.040 4,952,015.00 70 4.376 4.376 A-1+ 3133EMH96 06/25/21 AGCY FEDERAL FARM CREDIT 0.125 06/14/23 5,000,000.00 99.713 4,985,650.00 4,998,515.97 99.059 4,952,930.00 75 0.271 0.271 AAA BANKS FUNDING CORP 912828ZY9 12/15/21 USGOVT UNITED STATESTREASURY 0.125 07/15/23 5,000,000.00 99.359 4,967,968.75 4,994,119.64 98.672 4,933,593.75 106 0.532 0.532 AAA 91282CCU3 08/31/21 USGOVT UNITED STATES TREASURY 0.125 08/31/23 4,000,000.00 99.766 3,990,625.00 3,998,060.46 98.125 3,925,000.00 153 0.243 0.243 AAA 91282CAK7 08/26/21 USGOVT UNITED STATES TREASURY 0.125 09/15/23 4,000,000.00 99.750 3,990,000.00 3,997,786.88 97.969 3,918,750.00 168 0.247 0.247 AAA 91282CAP6 10/14/21 USGOVT UNITED STATES TREASURY 0.125 10/15/23 5,000,000.00 99.535 4,976,757.80 4,993,735.22 97.562 4,878,125.00 198 0.358 0.358 AAA FEDERAL FARM CREDIT 3133ENDR8 11/15/21 AGCY 0.400 11/09/23 5,000,000.00 99.713 4,985,665.00 4,995,613.07 97.362 4,868,090.00 223 0.545 0.545 AAA BANKS FUNDING CORP 313OAQAFO 12/22/21 AGCY CALL FEDERAL HOME LOAN 0.800 12/22/23 06/22/23 Quarterly 5,000,000.00 100.000 5,000,000.00 5,000,000.00 97.173 4,858,645.00 266 83 0.800 0.800 AAA BANKS 3130ASXL8 09/16/22 AGCYCALL FEDERAL HOME LOAN 3.625 02/28/24 05/28/23 Quarterly 5,000,000.00 99.265 4,963,250.00 4,976,724.39 98.810 4,940,505.00 334 58 4.151 4.151 AAA BANKS BOARD OF REGENTS 88213AKBO 09/29/20 MUNI TEXAS A & M UNIVERSITY 2.549 05/15/24 4,485,000.00 107.731 4,831,735.35 4,592,728.15 97.475 4,371,753.75 411 0.400 0.400 AAA SYSTEM Total General Operating 182,959,607.04 183,035,407.92 182,941,806.31 182,000,458.29 57 65 3.547 3.547 Grand Total 182,959,607.04 183,035,407.92 182,941,806.31 182,000,458.29 57 65 3.547 3.547 Page 11 Hilltop Securities J�* Earned Income General Operating City of Southlake January 1, 2023 - March 31, 2023 89233HNH3 CID Toyota Motor Credit Corporation 0.0 01/17/2023 0.00 0.00 0.00 0.00 0.00 4,688.89 0.00 4,688.89 91282CBG5 USGOVT UNITED STATESTREASURY 0.125 01/31/2023 1,046.20 203.80 1,250.00 0.00 0.00 1,077.69 0.00 1,281.49 912828ZD5 USGOVT UNITED STATESTREASURY 0.5 03/15/2023 7,458.56 5,041.44 12,500.00 0.00 0.00 (2,865.70) 0.00 2,175.74 LNSTCRP LGIP LoneStar Corp O/N 0.0 03/31/2023 0.00 144,003.41 144,003.41 0.00 0.00 0.00 0.00 144,003.41 LNSTGOV LGIP LoneStar Gov O/N 0.0 03/31/2023 0.00 143,708.24 143,708.24 0.00 0.00 0.00 0.00 143,708.24 TEXPOOL LGIP TexPool 0.0 03/31/2023 0.00 689,259.61 689,259.61 0.00 0.00 0.00 0.00 689,259.61 TEXSTAR LGIP TexSTAR 0.0 03/31/2023 0.00 215,110.68 215,110.68 0.00 0.00 0.00 0.00 215,110.68 TXCLASS LGIP Texas CLASS 0.0 03/31/2023 0.00 101,659.00 101,659.00 0.00 0.00 0.00 0.00 101,659.00 912828ZH6 USGOVT UNITED STATESTREASURY 0.25 04/15/2023 2,678.57 3,090.66 0.00 0.00 5,769.23 (64.42) 0.00 3,026.24 89233HSC9 CID Toyota Motor Credit Corporation 0.0 05/12/2023 0.00 0.00 0.00 0.00 0.00 44,625.00 0.00 44,625.00 8821356WI MUNI BOARD OF REGENTS TEXAS A & M UNIVERSITY 15,972.22 31,250.00 0.00 0.00 47,222.22 (29,423.14) 0.00 1,826.86 SYSTEM 5.0 05/15/2033 46640QT27 CID J.P. Morgan Securities LLC 0.0 06/02/2023 0.00 0.00 0.00 0.00 0.00 48,375.00 0.00 48,375.00 78009BT93 CID Royal Bank of Canada 0.0 06/09/2023 0.00 0.00 0.00 0.00 0.00 53,250.00 0.00 53,250.00 3133EMH96 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 295.14 1,562.50 0.00 0.00 1,857.64 1,804.91 0.00 3,367.41 0.125 06/14/2023 912828ZY9 USGOVT UNITED STATESTREASURY 0.125 07/15/2023 2,887.23 1,549.93 3,125.00 0.00 1,312.15 5,025.48 0.00 6,575.40 91282CCU3 USGOVT UNITED STATESTREASURY 0.125 08/31/2023 1,698.90 1,235.89 2,500.00 0.00 434.78 1,159.77 0.00 2,395.66 91282CAK7 USGOVT UNITED STATES TREASURY 0.12509/15/2023 1,491.71 1,239.27 2,500.00 0.00 230.98 1,207.52 0.00 2,446.79 91282CAP6 USGOVT UNITED STATES TREASURY 0.12510/15/2023 1,339.29 1,545.33 0.00 0.00 2,884.62 2,871.91 0.00 4,417.24 3133ENDR8 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 0.4 2,888.89 5,000.00 0.00 0.00 7,888.89 1,798.79 0.00 6,798.79 11/09/2023 313OAQAFO AGCY CALL FEDERAL HOME LOAN BANKS 0.812/22/2023 1,000.00 10,000.00 0.00 0.00 11,000.00 0.00 0.00 10,000.00 3130ASXL8 AGCY CALL FEDERAL HOME LOAN BANKS 3.625 02/28/2024 62,934.03 45,312.50 91,631.94 0.00 16,614.58 6,183.63 0.00 51,496.13 88213AKBO MUNI BOARD OF REGENTS TEXAS A & M UNIVERSITY 14,607.89 28,580.66 0.00 0.00 43,188.56 (23,816.84) 0.00 4,763.82 SYSTEM 2.549 05/15/2024 Total General Operating 116,298.62 1,429,352.91 1,407,247.88 0.00 138,403.65 115,898.49 0.00 1,545,251.40 Grand Total 116,298.62 1,429,352.91 1,407,247.88 0.00 138,403.65 115,898.49 0.00 1,545,251.40 Page 12 Hilltop Securities J�* Investment Transactions General Operating Coupon 912828ZY9 01/15/23 01/15/23 US GOVT UNITED STATESTREASURY 91282CBG5 01/31/23 01/31/23 US GOVT UNITED STATESTREASURY 3130ASXL8 02/28/23 02/28/23 AGCY CALL FEDERAL HOME LOAN BANKS 91282CCU3 02/28/23 02/28/23 US GOVT UNITED STATESTREASURY 912828ZD5 03/15/23 03/15/23 US GOVT UNITED STATESTREASURY 91282CAK7 03/15/23 03/15/23 US GOVT UNITED STATESTREASURY City of Southlake January 1, 2023 - March 31, 2023 0.125 07/15/23 0.00 0.00 3,125.00 3,125.00 0.00 — — 0.125 01/31/23 0.00 0.00 1,250.00 1,250.00 0.00 — — 3.625 02/28/24 05/28/23 0.00 0.00 91,631.94 91,631.94 0.00 — — 0.125 08/31/23 0.00 0.00 2,500.00 2,500.00 0.00 — — 0.500 03/15/23 0.00 0.00 12,500.00 12,500.00 0.00 — 0.125 09/15/23 0.00 0.00 2,500.00 2,500.00 0.00 — — Total Coupon 0.00 0.00 113,506.94 113,506.94 0.00 Maturity 89233HNH3 01/17/23 01/17/23 CP Toyota Motor Credit Corporation 0.000 01/17/23 (5,000,000.00) 100.000 5,000,000.00 0.00 5,000,000.00 0.00 — — 91282CBG5 01/31/23 01/31/23 US GOVT UNITED STATESTREASURY 0.125 01/31/23 (2,000,000.00) 100.000 2,000,000.00 0.00 2,000,000.00 0.00 — — 912828ZD5 03/15/23 03/15/23 USGOVT UNITED STATESTREASURY 0.500 03/15/23 (5,000,000.00) 100.000 5,000,000.00 0.00 5,000,000.00 0.00 — — Total Maturity OZ0001000.00) 12,000,000.00 0.00 12,000,000.00 0.00 Page 13 Hilltop Securities J�* Investment Transactions Totals City of Southlake January 1, 2023 - March 31, 2023 Total Maturity (12,000,000.00) 12,000,000.00 0.00 12,000,000.00 0.00 1.112 1.112 Total Coupon 0.00 0.00 113,506.94 113,506.94 0.00 Page 14 Hilltop Securities J�* Amortization and Accretion General Operating City of Southlake January 1, 2023 - March 31, 2023 89233HNH3 04/25/22 CP Toyota Motor Credit Corporation 0.0 01/1712023 0.00 0.000 0.00 4,688.89 0.00 0.00 0.00 91282CBG5 02/02/22 USGOVT UNITED STATESTREASURY 0.125 01/31/2023 0.00 0.000 0.00 1,077.69 0.00 0.00 0.00 912828ZD5 10/15/21 USGOVT UNITED STATESTREASURY 0.5 03/15/2023 0.00 0.000 0.00 (2,865.70) 0.00 0.00 0.00 912828ZH6 10/14/21 USGOVT UNITED STATESTREASURY 0.25 04/15/2023 5,000,000.00 100.008 5,000,390.65 (64.42) (380.63) 10.02 5,000,010.02 89233HSC9 08/22/22 CP Toyota Motor Credit Corporation 0.0 05/12/2023 5,000,000.00 97.392 4,869,595.83 44,625.00 110,075.00 (20,329.17) 4,979,670.83 8821356W1 10/28/20 MUNI BOARD OF REGENTSTEXAS A & M UNIVERSITY SYSTEM 5.0 2,500,000.00 112.026 2,800,650.00 (29,423.14) (286,265.35) 14,384.65 2,514,384.65 05/15/2033 46640QT27 09/08/22 CP J.P. Morgan Securities LLC 0.0 06/02/2023 5,000,000.00 97.130 4,856,487.50 48,375.00 110,187.50 (33,325.00) 4,966,675.00 78009BT93 09/15/22 CP Royal Bank of Canada 0.0 06/09/2023 5,000,000.00 96.840 4,842,025.00 53,250.00 117,150.00 (40,825.00) 4,959,175.00 3133EMH96 06/25/21 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 0.125 06/14/2023 5,000,000.00 99.713 4,985,650.00 1,804.91 12,865.97 (1,484.03) 4,998,515.97 912828ZY9 12/15/21 USGOVT UNITED STATES TREASURY 0.12507/15/2023 5,000,000.00 99.359 4,967,968.75 5,025.48 26,150.89 (5,880.36) 4,994,119.64 91282CCU3 08/31/21 USGOVT UNITED STATES TREASURY 0.12508/31/2023 4,000,000.00 99.766 3,990,625.00 1,159.77 7,435.46 (1,939.54) 3,998,060.46 91282CAK7 08/26/21 USGOVT UNITED STATES TREASURY 0.12509/15/2023 4,000,000.00 99.750 3,990,000.00 1,207.52 7,786.88 (2,213.12) 3,997,786.88 91282CAP6 10/14/21 USGOVT UNITED STATES TREASURY 0.12510/15/2023 5,000,000.00 99.535 4,976,757.80 2,871.91 16,977.42 (6,264.78) 4,993,735.22 3133ENDR8 11/15/21 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 0.411/09/2023 5,000,000.00 99.713 4,985,665.00 1,798.79 9,948.07 (4,386.93) 4,995,613.07 313OAQAFO 12/22/21 AGCY CALL FEDERAL HOME LOAN BANKS 0.812/22/2023 5,000,000.00 100.000 5,000,000.00 0.00 0.00 0.00 5,000,000.00 3130ASXL8 09/16/22 AGCY CALL FEDERAL HOME LOAN BANKS 3.625 02/28/2024 5,000,000.00 99.265 4,963,250.00 6,183.63 13,474.39 (23,275.61) 4,976,724.39 88213AKBO 09/29/20 MUNI BOARD OF REGENTSTEXAS A & M UNIVERSITY SYSTEM 2.549 4,485,000.00 107.731 4,831,735.35 (23,816.84) (239,007.20) 107,728.15 4,592,728.15 05/15/2024 Total General Operating 64,985,000.00 65,060,800.88 115,898.49 (93,601.61) (17,800.73) 64,967,199.27 Grand Total 64,985,000.00 65,060,800.88 115,898.49 (93,601.61) (17,800.73) 64,967,19927 Page 15 Hilltop Securities J�* Projected Cash Flows General Operating City of Southlake March 31, 2023 to March 31, 2024 912828ZH6 UNITED STATESTREASURY 0.25 04/15/2023 04/17/23 6,250.00 6,250.00 912828ZH6 UNITED STATESTREASURY0.2504/15/2023 04/17/23 5,000,000.00 5,000,000.00 91282CAP6 UNITED STATESTREASURY0.1 25 10/15/2023 04/17/23 3,125.00 3,125.00 3133ENDR8 FEDERAL FARM CREDIT BANKS FUNDING CORP 0.411/09/2023 05/09/23 10,000.00 10,000.00 89233HSC9 Toyota Motor Credit Corporation 0.0 05/12/2023 05/12/23 5,000,000.00 5,000,000.00 8821356W1 BOARD OF REGENTSTEXAS A & M UNIVERSITY SYSTEM 5.0 05/15/2033 05/15/23 62,500.00 62,500.00 8821356W1 BOARD OF REGENTSTEXAS A & M UNIVERSITY SYSTEM 5.0 05/15/2033 05/15/23 2,500,000.00 2,500,000.00 88213AKBO BOARD OF REGENTSTEXAS A & M UNIVERSITY SYSTEM 2.549 05/15/2024 05/15/23 57,161.32 57,161.32 46640QT27 J.P. Morgan Securities LLC 0.0 06/02/2023 06/02/23 5,000,000.00 5,000,000.00 78009BT93 Royal Bank of Canada 0.0 06/09/2023 06/09/23 5,000,000.00 5,000,000.00 3133EMH96 FEDERAL FARM CREDIT BANKS FUNDING CORP 0.125 06/14/2023 06/14/23 3,125.00 3,125.00 3133EMH96 FEDERAL FARM CREDIT BANKS FUNDING CORP 0.125 06/14/2023 06/14/23 5,000,000.00 5,000,000.00 313OAQAFO FEDERAL HOME LOAN BANKS 0.812/22/2023 06/22/23 20,000.00 20,000.00 912828ZY9 UNITED STATESTREASURY0.1 25 07/15/2023 07/17/23 3,125.00 3,125.00 912828ZY9 UNITED STATESTREASURY0.1 25 07/15/2023 07/17/23 5,000,000.00 5,000,000.00 3130ASXL8 FEDERAL HOME LOAN BANKS 3.625 02/28/2024 08/28/23 90,625.00 90,625.00 91282CCU3 UNITED STATESTREASURY0.1 25 08/31/2023 08/31/23 2,500.00 2,500.00 91282CCU3 UNITED STATESTREASURY0.1 25 08/31/2023 08/31/23 4,000,000.00 4,000,000.00 91282CAK7 UNITED STATESTREASURY 0.125 09/15/2023 09/15/23 2,500.00 2,500.00 91282CAK7 UNITED STATESTREASURY0.1 25 09/15/2023 09/15/23 4,000,000.00 4,000,000.00 91282CAP6 UNITED STATESTREASURY0.1 25 10/15/2023 10/16/23 3,125.00 3,125.00 91282CAP6 UNITED STATESTREASURY0.12510/15/2023 10/16/23 5,000,000.00 5,000,000.00 3133ENDR8 FEDERAL FARM CREDIT BANKS FUNDING CORP 0.411/09/2023 11/09/23 10,000.00 10,000.00 3133ENDR8 FEDERAL FARM CREDIT BANKS FUNDING CORP 0.411/09/2023 11/09/23 5,000,000.00 5,000,000.00 88213AKBO BOARD OF REGENTSTEXAS A & M UNIVERSITY SYSTEM 2.549 05/15/2024 11/15/23 57,161.32 57,161.32 313OAQAFO FEDERAL HOME LOAN BANKS 0.812/22/2023 12/22/23 20,000.00 20,000.00 313OAQAFO FEDERAL HOME LOAN BANKS 0.812/22/2023 12/22/23 5,000,000.00 5,000,000.00 3130ASXL8 FEDERAL HOME LOAN BANKS 3.625 02/28/2024 02/28/24 90,625.00 90,625.00 3130ASXL8 FEDERAL HOME LOAN BANKS 3.625 02/28/2024 02/28/24 5,000,000.00 5,000,000.00 Grand Total 441,822.65 60,500,000.00 60,941,822.65 Hilltop Securities J�* Projected Cash Flows Totals City of Southlake March 31, 2023 to March 31, 2024 April 2023 9,375.00 5,000,000.00 5,009,375.00 May 2023 129,661.32 7,500,000.00 7,629,661.32 June 2023 23,125.00 15,000,000.00 15,023,125.00 July 2023 3,125.00 5,000,000.00 5,003,125.00 August 2023 93,125.00 4,000,000.00 4,093,125.00 September 2023 2,500.00 4,000,000.00 4,002,500.00 October 2023 3,125.00 5,000,000.00 5,003,125.00 November 2023 67,161.32 5,000,000.00 5,067,161.32 December 2023 20,000.00 5,000,000.00 5,020,000.00 February2024 90,625.00 5,000,000.00 5,090,625.00 Total 441,822.65 60,500,000.00 60,941,822.65 ■ Interest ■ Principal $20,000,000 $10,000,000 $0 119 1 IN Ian I E Apr-23 Sep-23 Oct-23 Nov-23 Dec-23 Feb-24 Page 17 Securities � City of Southlake Hillto i� As of March 31, 2023 Disclosures & Disclaimers As a courtesy to investors this information: (1) is provided for informational purposes only; (2) should not be construed as an offer to sell or a solicitation of an offer to buy any security; and (3) does not replace customer statements This report is designed to provide general information and is not intended to provide specific legal, investment, accounting, tax or other professional advice. It is important to review and save all source documents provided by a product sponsor or brokerage firm which may contain notices, disclosures and other information important to you and may also serve as a reference. If conflicts between this report and sponsor reports or confirmations exist, the information provided by the product sponsors shall prevail. Fees and sales charges paid may not be reflected in the information. The information and data contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed. Additionally, the information may contain assets held away from HTS, therefore investors should contact customer service or other representatives from the respective distributors or issuers to determine SIPC coverage for heldaway assets. HTS and HSAM do not guarantee the information contained herein or its accuracy or completeness regarding contributions, withdrawals, protected values. All information is subject to further review with client to validate final values. It is not possible to directly invest in an index. Financial forecasts, rates of return, risk, inflation, and other assumptions may be used as the basis for illustrations.They should not be considered a guarantee offuture performance or a guarantee of achieving overall financial objectives. Past performance is not a guarantee or a predictor of future results of either the indices or any particular investment. S&P rates the creditworthiness of individual bonds from: AAA highest to D lowest. Investing in fixed income securities involves interest rate risk, credit risk, and inflation risk. Interest rate risk is the possibility that bond prices will decrease because of an interest rate increase. When interest rates rise, bond prices and the values offixed income securities fall. When interest rates fall, bond prices and the values of fixed income securities rise. Credit risk is the risk that a company will not be able to pay its debts, including the interest on its bonds. Inflation risk is the possibility that the interest paid on an investment in bonds will be lower than the inflation rate, decreasing purchasing power. Cash alternatives typically include money market securities and U.S. treasury bills. Investing in such cash alternatives involves inflation risk. In addition, investments in money market securities may involve credit risk and a risk of principal loss. Because money market securities are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency, there is no guarantee the value of your investment will be maintained at $1.00 per share, and your shares, when sold, may be worth more or less than what you originally paid for them. U.S. Treasury bills are subject to market risk if sold prior to maturity. Market risk is the possibility that the value, when sold, might be less than the purchase price. Investing in stock securities involves volatility risk, market risk, business risk, and industry risk. The prices of most stocks fluctuate. Volatility risk is the chance that the value of a stock will fall. Market risk is the chance that the prices of all stocks will fall due to conditions in the economic environment. Business risk is the chance that a specific company's stock will fall because of issues affecting it. Industry risk is the chance that a set offactors particular to an industry group will adversely affect stock prices within the industry. Securities offered by HTS: (1) are not FDIC (Federal Deposit Insurance Corporation) insured; (2) are not bank deposits; (3) are not guaranteed by any bank or by any other federal government agency. None ofthe named entities are affiliates of HTS or HSAM.Hilltop Securities Asset Management (HSAM) is an SEC -registered investment advisor. Hilltop Securities Inc. (HTS) is a registered broker -dealer, registered investment adviser and municipal advisor firm that does not provide tax or legal advice. Member of FINRA & SIPC. HTS and HSAM are wholly owned subsidiaries of Hilltop Holdings, Inc. (NYSE: HTH) located at 717 N. Harwood St., Suite 3400, Dallas,Texas 75201, (214) 859-1800, 833-4HILLTOP. Copyright 2022, S&P Global Market Intelligence. Reproduction of any information, data or material, including ratings ("Content") in any form is prohibited except with the prior written permission ofthe relevant party. Such party, its affiliates and suppliers ("Content Providers") do not guarantee the accuracy, adequacy, completeness, timeliness or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless ofthe cause, or for the results obtained from the use of such Content. In no event shall. Content Providers be liable for any damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with any use ofthe Content. A reference to a particular investment or security, a rating or any observation concerning an investment that is part of the content is not a recommendation to buy, sell or hold such investment or security, does not address the suitability of an investment or security and should not be relied on as investment advice. Credit ratings are statements of opinions and are not statements of fact. Page 18