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HomeMy WebLinkAboutR2025-201 20251208RESOLUTION NO. R2025-201 A Resolution of the City Council of the City of Pearland, Texas, accepting the City’s Investment Report for the quarter ending June 2025. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That the City Council hereby accepts the Quarterly Investment Report for the quarter ending June 2025. PASSED, APPROVED and ADOPTED this the 8th day of December, A.D., 2025. ________________________________ J.KEVIN COLE MAYOR ATTEST: ________________________________ FRANCES AGUILAR, TRMC, MMC CITY SECRETARY APPROVED AS TO FORM: ______________________________ DARRIN M. COKER CITY ATTORNEY Docusign Envelope ID: A0AAB172-A93E-423D-95AD-FDAA31EED216 INVESTMENT REPORT City of Pearland April 1 to June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. ©Hilltop Securities Asset Management, LLC. All rights reserved. Contents Investment Management Team Scott McIntyre Senior Portfolio Manager 512.481.2009 Scott.McIntyre@HilltopSecurities.com Greg Warner Senior Portfolio Manager 512.481.2012 Greg.Warner@HilltopSecurities.com Jodi Jones Investment Reporting Manager 512.481.2076 Jodi.Jones@HilltopSecurities.com Page 2 Market Recap � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �3 Investment Officers’ Certification � � � � � � � � � � � � � � � � � � � � � � � � � � �4 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �5 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �6 Asset Allocation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �7 Credit Rating Summary � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �8 Benchmark Comparison � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �9 Fund Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �10 Detail of Security Holdings � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �11 Earned Income � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �14 Investment Transactions � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �17 Investment Transactions Totals � � � � � � � � � � � � � � � � � � � � � � � � � � � �18 Amortization and Accretion � � � � � � � � � � � � � � � � � � � � � � � � � � � � �19 Projected Cash Flows� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �20 Projected Cash Flows Totals � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �21 Disclosures & Disclaimers � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �22 City of Pearland As of June 30, 2025 Page 3©Hilltop Securities Asset Management, LLC. All rights reserved. Market Recap The ominous soft data (survey) reports continued to accumulate in June, while the hard data reports held up surprisingly well� Bond market investors and Fed officials generally dismissed any signs of a solid economy and determined that it was simply a matter of time before tariff uncertainty pushed GDP growth lower� June kicked off with the ISM services and manufacturing composite indexes both indicating contraction, common for the factory sector but rare for services� In fact, it was only the fourth time in the last 60 months that the services index had come in below 50� There was also an alarming drop in the new orders index, which fell into contraction territory for only the third time since 2020 at 46�5� Both prices paid indexes were well above 60 as purchasing managers had little choice but to pay higher prices for future shipments� But perhaps the most revealing part of the May ISM reports were in the comments, as one purchasing manager after another shared tariff frustrations: “no choice but to pass along price increases;” “ever-changing trade policies have wreaked havoc on the company’s ability to remain profitable;” and “tariffs alone have caused supply chain disruptions rivaling COVID-19�” The May ISM surveys clearly signaled U�S� businesses were increasingly stressed, and there is no indication that the stress-evoking import taxes will disappear� In fact, the 25% tax on steel and aluminum was increased to 50%� This will have a detrimental effect on U�S� construction costs as half of all aluminum, and a quarter of all steel, is imported� Rather than pay the enormous tariff rate on construction materials, many builders are likely to postpone projects� To a lesser degree, other industries will face the same decisions� In addition, the massive “Liberation Day” tariffs, announced in early April (before being quickly postponed for 90 days) will reemerge on July 9th, further clouding the U�S� business outlook� In the meantime, a widely anticipated rise in inflationary pressure and deterioration of labor market conditions has yet to fully emerge� In fact, U�S� businesses added +139k jobs to company payrolls in May, exceeding forecasts for the third straight month� However, downward revisions to the prior two months quietly subtracted -95k, taking the shine off the May headline� The unemployment rate held steady at 4�2%, although it would have been significantly higher if -626k Americans had not left the labor force in May, the largest monthly drop since 2023� Adding to those concerns, continuing claims for unemployment benefits climbed to the highest levels since November 2021� Thus, while headline labor numbers appeared healthy, underlying conditions worsened� Both CPI and PPI indicated extremely low inflation readings for May with overall and core rates up just +0�1%� For CPI, it was the fourth straight month in which the increase came in below the median forecast� On a year-over-year basis, headline CPI climbed from +2�3% to +2�4%, while the core rate held steady at +2�8%, matching a 50-month low from the previous month� However, the three-month annualized consumer inflation rate was just +1�7%� This is almost entirely the result of lower energy costs, which can be attributed to falling global demand� Unlike the labor market, which is clearly signaling future stress, the current inflation readings are not pointing to higher future prices� Not yet anyway� In mid-June, the FOMC voted unanimously to maintain the overnight target range at 4�25% - 4�50% for the fourth consecutive meeting� The updated summary of economic projection (SEP) indicated Fed officials expect inflation and unemployment to rise later this year, while GDP growth slows� The Fed’s “dot plot,” updated for the first time since March, continued to show two 25 basis point rate cuts in 2025� President Trump, eyeing the prospect of fading growth and dismissing the expected rise in inflationary pressure, grew increasingly frustrated with Fed Chairman Powell during the month, demanding that the overnight target rate be slashed by 200 to 300 basis points, immediately� The next FOMC meeting is at the end of July� There has been no indication that Fed officials will announce a rate cut on that date, although two Trump-appointed Fed Governors have recently suggested July should be in play� Yields moved lower in June as investors recalibrated future interest rate expectations� Even if the overnight funds target is lowered once or twice in 2025, the next Fed Chairman, expected to be nominated by Trump “very soon,” will certainly mirror the president’s push for dramatically lower interest rates next year� City of Pearland As of June 30, 2025 Page 4©Hilltop Securities Asset Management, LLC. All rights reserved.Page 4 Investment Officers Investment Officers’ Certification This report is prepared for the City of Pearland (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� Melissa Saxton Director of Finance Tenecha Williams Asst Finance Director Chan Tran Finance Analyst Page 5 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved.Page 5 Portfolio Overview Portfolio Summary Asset Allocation Prior 31 Mar-25 Current 30 Jun-25 Par Value 453,870,759�84 528,688,122�88 Original Cost 453,870,759�84 528,709,622�89 Book Value 453,870,759�84 528,707,725�84 Market Value 453,871,707�84 528,912,537�88 Accrued Interest 1,124,876�06 1,159,313�98 Book Value Plus Accrued 454,995,635�90 529,867,039�82 Market Value Plus Accrued 454,996,583�90 530,071,851�86 Net Unrealized Gain/(Loss)948�00 204,812�04 Prior 31 Mar-25 Current 30 Jun-25 Yield to Maturity 4�179%4�099% Yield to Worst 4�179%4�099% Days to Final Maturity 2 81 Days to Effective Maturity 2 81 Duration 0�48 1�89 Transaction Summary Transaction Type Quantity Principal Interest Total Amount Realized Gain/Loss Buy 55,000,000�00 (55,021,500�01)(113,111�41)(55,134,611�42)0�00 Current Period 1 Apr-25 to 30 Jun-25 Interest Income 4,848,600�36 Net Amortization/Accretion (1,897�05) Realized Gain/(Loss)0�00 Net Income 4,846,703�31 Fiscal Year-to-Date 1 Oct-24 to 30 Jun-25 Net Income 15,198,469�16 Portfolio CharacteristicsIncome Summary City of Pearland As of June 30, 2025 Page 6©Hilltop Securities Asset Management, LLC. All rights reserved. Maturity Distribution by Security Type Security Type Overnight 0-3 Months 3-6 Months 6-9 Months 9-12 Months 1-2 Years 2-3 Years 3-4 Years 4-5 Years Portfolio Total AGCY ------------9,982,405�72 ----9,982,405.72 AGCY CALL ----3,000,000�00 ----9,965,863�02 ------12,965,863.02 BANK DEP 23,117,214�60 ----------------23,117,214.60 LGIP 149,962,424�93 ----------------149,962,424.93 MMFUND 297,608,483�35 ----------------297,608,483.35 US GOVT ----------25,139,491�16 9,931,843�06 ----35,071,334.22 Total 470,688,122.88 --3,000,000.00 ----35,105,354.18 19,914,248.78 ----528,707,725.84 Portfolio Overview Top Ten Holdings Issuer Allocation WF 60�65% TXCLASS 19�82% United States Department of The Treasury 6�63% LOGIC 6�53% TEXSTAR 2�02% Federal Farm Credit Banks Funding Corporation 1�89% Federal Home Loan Mortgage Corporation 1�88% Federal Home Loan Banks 0�57% Regions 0�01% Maturity Distribution by Security Type City of Pearland As of June 30, 2025 Page 7©Hilltop Securities Asset Management, LLC. All rights reserved. Book Value Basis Security Distribution Security Type Prior Balance 31-Mar-25 Prior Allocation 31-Mar-25 Change in Allocation Current Balance 30-Jun-25 Current Allocation 30-Jun-25 Yield to Maturity AGCY 0�00 0�00%1�89%9,982,405�72 1�89%3�939% AGCY CALL 3,000,000�00 0�66%1�79%12,965,863�02 2�45%4�230% BANK DEP 13,658,095�38 3�01%1�36%23,117,214�60 4�37%0�676% LGIP 148,323,577�17 32�68%(4�32%)149,962,424�93 28�36%4�396% MMFUND 288,889,087�29 63�65%(7�36%)297,608,483�35 56�29%4�206% US GOVT 0�00 0�00%6�63%35,071,334�22 6�63%4�038% Portfolio Total 453,870,759.84 100.00%528,707,725.84 100.00%4.090% Asset Allocation Asset Allocation by Security Type as of Asset Allocation by Security Type as of 31-Mar-2025 30-Jun-2025 City of Pearland As of June 30, 2025 Page 8©Hilltop Securities Asset Management, LLC. All rights reserved. Credit Rating Summary Rating Distribution Allocation by Rating Book Value Portfolio Allocation Secured Deposits (Insured or Collateralized) Demand Deposits 23,117,214�60 4�37% Total Secured Deposits 23,117,214.60 4.37% Local Government Investment Pools & Money Market Funds AAA 447,570,908�28 84�65% Total Local Government Investment Pools & Money Market Funds 447,570,908.28 84.65% Long Term Rating Distribution AA+58,019,602�96 10�97% Total Long Term Rating Distribution 58,019,602.96 10.97% Portfolio Total 528,707,725.84 100.00% City of Pearland As of June 30, 2025 Page 9©Hilltop Securities Asset Management, LLC. All rights reserved. Yield Overview Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 City of Pearland ----------------------------4.84 4.59 4.59 4.44 4.24 4.21 4.18 4.15 4.14 4.10 6 Month CMT 5�20 5�29 5�38 5�47 5�50 5�48 5�43 5�39 5�36 5�33 5�33 5�34 5�34 5�29 5�16 5�00 4�84 4�66 4�50 4�39 4�34 4�30 4�28 4�27 TexStar 5�11 5�30 5�31 5�32 5�33 5�34 5�32 5�30 5�30 5�31 5�31 5�31 5�31 5�29 5�13 4�87 4�71 4�56 4�39 4�36 4�34 4�33 4�30 4�28 Benchmark Comparison Page 10 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Fund Overview Fund Name Prior Book Value Prior Market Value Changes to Market Value Current Book Value Current Market Value Net Income Days to Final Mty YTM YTW 100 - General Fund 62,090,424�81 62,090,740�81 26,819,692�88 88,837,707�47 88,910,433�69 910,170�50 282 4�181%4�181% 200 - Debt Service Fund 27,641,847�89 27,641,847�89 (3,402,590�81)24,239,257�08 24,239,257�08 65,640�31 1 4�211%4�211% 300 - Special Revenue Fund 13,876,508�51 13,876,508�51 378,401�92 14,254,910�43 14,254,910�43 143,151�82 1 4�290%4�290% 350 - Grant Fund 328,216�55 328,216�55 3,632�66 331,849�21 331,849�21 12,373�12 1 4�402%4�402% 500 - CIP Bond Fund 100,830,270�48 100,830,270�48 (6,173,120�80)94,657,149�68 94,657,149�68 1,266,365�93 1 4�316%4�316% 550 - Water & Sewer Bond Fund 132,411,625�59 132,411,625�59 (8,190,598�84)124,221,026�75 124,221,026�75 1,316,637�81 1 4�258%4�258% 600 - Water & Sewer Operating Fund 27,721,935�53 27,721,935�53 50,331,682�23 77,920,799�94 78,053,617�76 365,032�53 223 4�161%4�161% 610 - Solidwaste Operating Fund 625,493�51 625,493�51 (625,493�51)0�00 0�00 2,174�59 700 - Internal Service Fund 23,387,174�44 23,387,174�44 1,987,295�20 25,374,469�64 25,374,469�64 168,790�58 1 4�157%4�157% 900 - Economic Development 40,641,370�47 40,642,002�47 (40,642,002�47)0�00 0�00 0�00 900 - PEDC 0�00 0�00 43,131,032�97 43,131,764�97 43,131,032�97 447,303�58 5 4�343%4�343% 920 - DAP 0�00 0�00 1,089,514�95 1,089,514�95 1,089,514�95 2,178�51 1 0�803%0�803% 920 - Development - TIRZ 1,087,150�65 1,087,150�65 (1,087,150�65)0�00 0�00 0�00 930 - TIRZ 0�00 0�00 34,649,275�72 34,649,275�72 34,649,275�72 146,884�03 1 2�044%2�044% 930 - TIRZ II Shadow Creek 23,228,741�41 23,228,741�41 (23,228,741�41)0�00 0�00 0�00 Total 453,870,759.84 453,871,707.84 75,040,830.04 528,707,725.84 528,912,537.88 4,846,703.31 81 4.092%4.092% City of Pearland As of June 30, 2025 Page 11©Hilltop Securities Asset Management, LLC. 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Detail of Security Holdings CUSIP Settle Date Security Type Security Description CPN Maturity Date Next Call Date Call Type Par Value Purch Price Original Cost Book Value Mkt Price Market Value Days to Mty Days to Call YTM YTW Rating 100 - General Fund TXCLASS LGIP Texas CLASS 06/30/25 15,117,672�44 100�000 15,117,672�44 15,117,672�44 100�000 15,117,672�44 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 37,585,777�05 100�000 37,585,777�05 37,585,777�05 100�000 37,585,777�05 1 4�210 4�210 AAA WFPRLDCOMCK BANK DEP Wells Fargo - Commercial Cking 06/30/25 129,884�00 100�000 129,884�00 129,884�00 100�000 129,884�00 1 0�000 0�000 SD 3130ATE29 09/29/22 AGCY CALL FHLB 4�375 09/29/25 Expired 1,000,000�00 100�000 1,000,000�00 1,000,000�00 99�963 999,634�00 91 4�375 4�375 AA+ 91282CLH2 05/14/25 US GOVT U�S� Treasury Note 3�750 08/31/26 5,000,000�00 99�586 4,979,296�88 4,981,416�39 99�758 4,987,890�60 427 4�078 4�078 AA+ 91282CJK8 05/30/25 US GOVT U�S� Treasury Note 4�625 11/15/26 10,000,000�00 100�793 10,079,296�88 10,074,688�85 100�973 10,097,265�60 503 4�059 4�059 AA+ 3134HBUK5 06/02/25 AGCY CALL FEDERAL HOME LOAN MORTGAGE CORP 4�000 06/02/27 12/02/25 Quarterly 10,000,000�00 99�645 9,964,500�00 9,965,863�02 99�591 9,959,050�00 702 155 4�187 4�187 AA+ 3133ETJZ1 06/05/25 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 3�875 06/05/28 10,000,000�00 99�820 9,982,000�00 9,982,405�72 100�333 10,033,260�00 1,071 3�939 3�939 AA+ Total 100 - General Fund 88,833,333.49 88,838,427.25 88,837,707.47 88,910,433.69 282 155 4.181 4.181 200 - Debt Service Fund TXCLASS LGIP Texas CLASS 06/30/25 100,743�41 100�000 100,743�41 100,743�41 100�000 100,743�41 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 24,138,513�67 100�000 24,138,513�67 24,138,513�67 100�000 24,138,513�67 1 4�210 4�210 AAA Total 200 - Debt Service Fund 24,239,257.08 24,239,257.08 24,239,257.08 24,239,257.08 1 4.211 4.211 300 - Special Revenue Fund TXCLASS LGIP Texas CLASS 06/30/25 5,956,804�99 100�000 5,956,804�99 5,956,804�99 100�000 5,956,804�99 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 8,298,105�44 100�000 8,298,105�44 8,298,105�44 100�000 8,298,105�44 1 4�210 4�210 AAA Total 300 - Special Revenue Fund 14,254,910.43 14,254,910.43 14,254,910.43 14,254,910.43 1 4.290 4.290 350 - Grant Fund TXCLASS LGIP Texas CLASS 06/30/25 331,849�21 100�000 331,849�21 331,849�21 100�000 331,849�21 1 4�402 4�402 AAA City of Pearland As of June 30, 2025 Page 12©Hilltop Securities Asset Management, LLC. 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Detail of Security Holdings CUSIP Settle Date Security Type Security Description CPN Maturity Date Next Call Date Call Type Par Value Purch Price Original Cost Book Value Mkt Price Market Value Days to Mty Days to Call YTM YTW Rating Total 350 - Grant Fund 331,849.21 331,849.21 331,849.21 331,849.21 1 4.402 4.402 500 - CIP Bond Fund LOGIC LGIP LOGIC 06/30/25 18,664,490�63 100�000 18,664,490�63 18,664,490�63 100�000 18,664,490�63 1 4�411 4�411 AAA TEXSTAR LGIP TexSTAR 06/30/25 10,655,474�93 100�000 10,655,474�93 10,655,474�93 100�000 10,655,474�93 1 4�284 4�284 AAA TXCLASS LGIP Texas CLASS 06/30/25 28,811,646�72 100�000 28,811,646�72 28,811,646�72 100�000 28,811,646�72 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 36,522,766�29 100�000 36,522,766�29 36,522,766�29 100�000 36,522,766�29 1 4�210 4�210 AAA WFPRLDCOMCK BANK DEP Wells Fargo - Commercial Cking 06/30/25 2,771�11 100�000 2,771�11 2,771�11 100�000 2,771�11 1 0�000 0�000 SD Total 500 - CIP Bond Fund 94,657,149.68 94,657,149.68 94,657,149.68 94,657,149.68 1 4.316 4.316 550 - Water & Sewer Bond Fund LOGIC LGIP LOGIC 06/30/25 15,868,695�67 100�000 15,868,695�67 15,868,695�67 100�000 15,868,695�67 1 4�411 4�411 AAA TXCLASS LGIP Texas CLASS 06/30/25 14,428,499�98 100�000 14,428,499�98 14,428,499�98 100�000 14,428,499�98 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 93,923,831�10 100�000 93,923,831�10 93,923,831�10 100�000 93,923,831�10 1 4�210 4�210 AAA Total 550 - Water & Sewer Bond Fund 124,221,026.75 124,221,026.75 124,221,026.75 124,221,026.75 1 4.258 4.258 600 - Water & Sewer Operating Fund TXCLASS LGIP Texas CLASS 06/30/25 144,961�52 100�000 144,961�52 144,961�52 100�000 144,961�52 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 57,760,609�44 100�000 57,760,609�44 57,760,609�44 100�000 57,760,609�44 1 4�210 4�210 AAA 91282CKR1 06/09/25 US GOVT U�S� Treasury Note 4�500 05/15/27 10,000,000�00 100�859 10,085,937�50 10,083,385�92 101�320 10,132,031�20 684 4�032 4�032 AA+ 91282CND9 06/09/25 US GOVT U�S� Treasury Note 3�750 05/15/28 10,000,000�00 99�305 9,930,468�75 9,931,843�06 100�160 10,016,015�60 1,050 4�003 4�003 AA+ Total 600 - Water & Sewer Operating Fund 77,905,570.96 77,921,977.21 77,920,799.94 78,053,617.76 223 4.161 4.161 700 - Internal Service Fund City of Pearland As of June 30, 2025 Page 13©Hilltop Securities Asset Management, LLC. All rights reserved. Detail of Security Holdings CUSIP Settle Date Security Type Security Description CPN Maturity Date Next Call Date Call Type Par Value Purch Price Original Cost Book Value Mkt Price Market Value Days to Mty Days to Call YTM YTW Rating TXCLASS LGIP Texas CLASS 06/30/25 8,985,986�42 100�000 8,985,986�42 8,985,986�42 100�000 8,985,986�42 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 15,521,407�89 100�000 15,521,407�89 15,521,407�89 100�000 15,521,407�89 1 4�210 4�210 AAA WFPRLDBUS+BANK DEP Wells Fargo - Business Cking Plus 06/30/25 839,629�72 100�000 839,629�72 839,629�72 100�000 839,629�72 1 0�680 0�680 SD WFPRLDCOM+BANK DEP Wells Fargo - Commercial Cking (Int)06/30/25 27,445�61 100�000 27,445�61 27,445�61 100�000 27,445�61 1 0�680 0�680 SD Total 700 - Internal Service Fund 25,374,469.64 25,374,469.64 25,374,469.64 25,374,469.64 1 4.157 4.157 900 - PEDC TXCLASS LGIP Texas CLASS 06/30/25 30,895,599�01 100�000 30,895,599�01 30,895,599�01 100�000 30,895,599�01 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 10,236,165�96 100�000 10,236,165�96 10,236,165�96 100�000 10,236,165�96 1 4�160 4�160 AAA 3130ATE29 09/29/22 AGCY CALL FHLB 4�375 09/29/25 Expired 2,000,000�00 100�000 2,000,000�00 2,000,000�00 99�963 1,999,268�00 91 4�375 4�375 AA+ Total 900 - PEDC 43,131,764.97 43,131,764.97 43,131,764.97 43,131,032.97 5 4.343 4.343 920 - DAP RGNPRLDTSWP MMFUND Regions Bk Trust Sweep 06/30/25 40,810�77 100�000 40,810�77 40,810�77 100�000 40,810�77 1 3�970 3�970 AAA WFPRLDBUS+BANK DEP Wells Fargo - Business Cking Plus 06/30/25 1,048,704�18 100�000 1,048,704�18 1,048,704�18 100�000 1,048,704�18 1 0�680 0�680 SD Total 920 - DAP 1,089,514.95 1,089,514.95 1,089,514.95 1,089,514.95 1 0.803 0.803 930 - TIRZ WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 13,580,495�74 100�000 13,580,495�74 13,580,495�74 100�000 13,580,495�74 1 4�160 4�160 AAA WFPRLDCOM+BANK DEP Wells Fargo - Commercial Cking (Int)06/30/25 21,068,779�98 100�000 21,068,779�98 21,068,779�98 100�000 21,068,779�98 1 0�680 0�680 SD Total 930 - TIRZ 34,649,275.72 34,649,275.72 34,649,275.72 34,649,275.72 1 2.044 2.044 Grand Total 528,688,122.88 528,709,622.89 528,707,725.84 528,912,537.88 81 155 4.090 4.090 Page 14 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Earned Income CUSIP Security Type Security Description Beginning Accrued Interest Earned Interest Rec'd/ Sold/Matured Interest Purchased Ending Accrued Disc Accr/Prem Amort Net Realized Gain/Loss Net Income 100 - General Fund TXCLASS LGIP Texas CLASS 0�00 165,488�92 165,488�92 0�00 0�00 0�00 0�00 165,488�92 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)284,535�01 609,581�62 779,576�50 0�00 114,540�13 0�00 0�00 609,581�62 WFPRLDCOMCK BANK DEP Wells Fargo - Commercial Cking 0�00 0�00 0�00 0�00 0�00 0�00 0�00 0�00 3130ATE29 AGCY CALL FHLB 243�06 10,937�50 0�00 0�00 11,180�56 0�00 0�00 10,937�50 91282CLH2 US GOVT U�S� Treasury Note 0�00 24,456�52 0�00 (38,213�32)62,669�84 2,119�51 0�00 26,576�03 91282CJK8 US GOVT U�S� Treasury Note 0�00 40,217�39 0�00 (18,851�90)59,069�29 (4,608�03)0�00 35,609�36 3134HBUK5 AGCY CALL FEDERAL HOME LOAN MORTGAGE CORP 0�00 32,222�22 0�00 0�00 32,222�22 1,363�02 0�00 33,585�24 3133ETJZ1 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 0�00 27,986�11 0�00 0�00 27,986�11 405�72 0�00 28,391�83 Total 100 - General Fund 284,778.07 910,890.28 945,065.42 (57,065.22)307,668.15 (719.78)0.00 910,170.50 200 - Debt Service Fund TXCLASS LGIP Texas CLASS 0�00 1,102�80 1,102�80 0�00 0�00 0�00 0�00 1,102�80 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)374�81 64,537�51 374�81 0�00 64,537�51 0�00 0�00 64,537�51 Total 200 - Debt Service Fund 374.81 65,640.31 1,477.61 0.00 64,537.51 0.00 0.00 65,640.31 300 - Special Revenue Fund TXCLASS LGIP Texas CLASS 0�00 65,207�45 65,207�45 0�00 0�00 0�00 0�00 65,207�45 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)27,710�07 77,944�37 83,454�82 0�00 22,199�62 0�00 0�00 77,944�37 Total 300 - Special Revenue Fund 27,710.07 143,151.82 148,662.27 0.00 22,199.62 0.00 0.00 143,151.82 350 - Grant Fund TXCLASS LGIP Texas CLASS 0�00 3,632�66 3,632�66 0�00 0�00 0�00 0�00 3,632�66 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)3,225�74 8,740�46 9,436�81 0�00 2,529�39 0�00 0�00 8,740�46 Total 350 - Grant Fund 3,225.74 12,373.12 13,069.47 0.00 2,529.39 0.00 0.00 12,373.12 500 - CIP Bond Fund LOGIC LGIP LOGIC 0�00 204,534�15 204,534�15 0�00 0�00 0�00 0�00 204,534�15 Page 15 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Earned Income CUSIP Security Type Security Description Beginning Accrued Interest Earned Interest Rec'd/ Sold/Matured Interest Purchased Ending Accrued Disc Accr/Prem Amort Net Realized Gain/Loss Net Income TEXSTAR LGIP TexSTAR 0�00 113,488�80 113,488�80 0�00 0�00 0�00 0�00 113,488�80 TXCLASS LGIP Texas CLASS 0�00 315,392�89 315,392�89 0�00 0�00 0�00 0�00 315,392�89 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)243,487�26 632,950�09 695,314�02 0�00 181,123�33 0�00 0�00 632,950�09 WFPRLDCOMCK BANK DEP Wells Fargo - Commercial Cking 0�00 0�00 0�00 0�00 0�00 0�00 0�00 0�00 Total 500 - CIP Bond Fund 243,487.26 1,266,365.93 1,328,729.86 0.00 181,123.33 0.00 0.00 1,266,365.93 550 - Water & Sewer Bond Fund LOGIC LGIP LOGIC 0�00 173,896�57 173,896�57 0�00 0�00 0�00 0�00 173,896�57 TXCLASS LGIP Texas CLASS 0�00 157,944�68 157,944�68 0�00 0�00 0�00 0�00 157,944�68 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)372,847�95 984,796�56 1,087,212�14 0�00 270,432�37 0�00 0�00 984,796�56 Total 550 - Water & Sewer Bond Fund 372,847.95 1,316,637.81 1,419,053.39 0.00 270,432.37 0.00 0.00 1,316,637.81 600 - Water & Sewer Operating Fund TXCLASS LGIP Texas CLASS 0�00 1,586�86 1,586�86 0�00 0�00 0�00 0�00 1,586�86 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)98,937�26 315,302�28 315,345�17 0�00 98,894�37 0�00 0�00 315,302�28 91282CKR1 US GOVT U�S� Treasury Note 0�00 26,902�18 0�00 (30,570�65)57,472�83 (2,551�58)0�00 24,350�60 91282CND9 US GOVT U�S� Treasury Note 0�00 22,418�48 0�00 (25,475�54)47,894�02 1,374�31 0�00 23,792�79 Total 600 - Water & Sewer Operating Fund 98,937.26 366,209.80 316,932.03 (56,046.19)204,261.22 (1,177.27)0.00 365,032.53 610 - Solidwaste Operating Fund WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)2,170�65 2,174�59 4,345�24 0�00 0�00 0�00 0�00 2,174�59 Total 610 - Solidwaste Operating Fund 2,170.65 2,174.59 4,345.24 0.00 0.00 0.00 0.00 2,174.59 700 - Internal Service Fund TXCLASS LGIP Texas CLASS 0�00 98,367�04 98,367�04 0�00 0�00 0�00 0�00 98,367�04 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)23,312�48 69,434�11 72,348�69 0�00 20,397�90 0�00 0�00 69,434�11 Page 16 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Earned Income CUSIP Security Type Security Description Beginning Accrued Interest Earned Interest Rec'd/ Sold/Matured Interest Purchased Ending Accrued Disc Accr/Prem Amort Net Realized Gain/Loss Net Income WFPRLDBUS+BANK DEP Wells Fargo - Business Cking Plus 0�00 918�22 918�22 0�00 0�00 0�00 0�00 918�22 WFPRLDCOM+BANK DEP Wells Fargo - Commercial Cking (Int)0�00 71�21 71�21 0�00 0�00 0�00 0�00 71�21 Total 700 - Internal Service Fund 23,312.48 168,790.58 171,705.16 0.00 20,397.90 0.00 0.00 168,790.58 900 - PEDC TXCLASS LGIP Texas CLASS 0�00 338,205�33 338,205�33 0�00 0�00 0�00 0�00 338,205�33 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)28,053�87 87,223�25 87,915�42 0�00 27,361�70 0�00 0�00 87,223�25 3130ATE29 AGCY CALL FHLB 486�11 21,875�00 0�00 0�00 22,361�11 0�00 0�00 21,875�00 Total 900 - PEDC 28,539.98 447,303.58 426,120.75 0.00 49,722.81 0.00 0.00 447,303.58 920 - DAP RGNPRLDTSWP MMFUND Regions Bk Trust Sweep 318�22 402�12 587�91 0�00 132�43 0�00 0�00 402�12 WFPRLDBUS+BANK DEP Wells Fargo - Business Cking Plus 0�00 1,776�39 1,776�39 0�00 0�00 0�00 0�00 1,776�39 Total 920 - DAP 318.22 2,178.51 2,364.30 0.00 132.43 0.00 0.00 2,178.51 930 - TIRZ WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)39,173�57 118,365�95 121,230�27 0�00 36,309�25 0�00 0�00 118,365�95 WFPRLDCOM+BANK DEP Wells Fargo - Commercial Cking (Int)0�00 28,518�08 28,518�08 0�00 0�00 0�00 0�00 28,518�08 Total 930 - TIRZ 39,173.57 146,884.03 149,748.35 0.00 36,309.25 0.00 0.00 146,884.03 Grand Total 1,124,876.06 4,848,600.36 4,927,273.85 (113,111.41)1,159,313.98 (1,897.05)0.00 4,846,703.31 Page 17 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Investment Transactions CUSIP Trade Date Settle Date Security Type Security Description Coupon Maturity Date Call Date Par Value Price Principal Amount Interest Purchased/ Received Total Amount Realized Gain/ Loss YTM YTW 100 - General Fund Buy 91282CLH2 05/12/25 05/14/25 US GOVT U�S� Treasury Note 3�750 08/31/26 5,000,000�00 99�586 4,979,296�88 38,213�32 5,017,510�20 0�00 4�078 4�078 91282CJK8 05/29/25 05/30/25 US GOVT U�S� Treasury Note 4�625 11/15/26 10,000,000�00 100�793 10,079,296�88 18,851�90 10,098,148�78 0�00 4�059 4�059 3134HBUK5 05/29/25 06/02/25 AGCY CALL FEDERAL HOME LOAN MORTGAGE CORP 4�000 06/02/27 12/02/25 10,000,000�00 99�645 9,964,500�00 0�00 9,964,500�00 0�00 4�187 4�187 3133ETJZ1 05/29/25 06/05/25 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 3�875 06/05/28 10,000,000�00 99�820 9,982,000�00 0�00 9,982,000�00 0�00 3�939 3�939 Total Buy 35,000,000.00 35,005,093.76 57,065.22 35,062,158.98 0.00 600 - Water & Sewer Operating Fund Buy 91282CND9 06/06/25 06/09/25 US GOVT U�S� Treasury Note 3�750 05/15/28 10,000,000�00 99�305 9,930,468�75 25,475�54 9,955,944�29 0�00 4�003 4�003 91282CKR1 06/06/25 06/09/25 US GOVT U�S� Treasury Note 4�500 05/15/27 10,000,000�00 100�859 10,085,937�50 30,570�65 10,116,508�15 0�00 4�032 4�032 Total Buy 20,000,000.00 20,016,406.25 56,046.19 20,072,452.44 0.00 Page 18 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Investment Transactions Totals Transaction Type Quantity Principal Amount Interest Total Amount Realized G/L YTM YTW Total Buy 55,000,000�00 (55,021,500�01)(113,111�41)(55,134,611�42)0�00 4�047 4�047 Page 19 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Amortization and Accretion CUSIP Settle Date Security Type Security Description Purchase Qty Orig Price Original Cost Amort/Accr for Period Total Amort/Accr Since Purch Remaining Disc/ Premium Ending Book Value 100 - General Fund 3130ATE29 09/29/22 AGCY CALL FHLB 1,000,000�00 100�000 1,000,000�00 0�00 0�00 0�00 1,000,000�00 91282CLH2 05/14/25 US GOVT U�S� Treasury Note 5,000,000�00 99�586 4,979,296�88 2,119�51 2,119�51 (18,583�61)4,981,416�39 91282CJK8 05/30/25 US GOVT U�S� Treasury Note 10,000,000�00 100�793 10,079,296�88 (4,608�03)(4,608�03)74,688�85 10,074,688�85 3134HBUK5 06/02/25 AGCY CALL FEDERAL HOME LOAN MORTGAGE CORP 10,000,000�00 99�645 9,964,500�00 1,363�02 1,363�02 (34,136�98)9,965,863�02 3133ETJZ1 06/05/25 AGCY FEDERAL FARM CREDIT BANKS FUNDING CORP 10,000,000�00 99�820 9,982,000�00 405�72 405�72 (17,594�28)9,982,405�72 Total 100 - General Fund 36,000,000.00 36,005,093.76 (719.78)(719.78)4,373.98 36,004,373.98 600 - Water & Sewer Operating Fund 91282CKR1 06/09/25 US GOVT U�S� Treasury Note 10,000,000�00 100�859 10,085,937�50 (2,551�58)(2,551�58)83,385�92 10,083,385�92 91282CND9 06/09/25 US GOVT U�S� Treasury Note 10,000,000�00 99�305 9,930,468�75 1,374�31 1,374�31 (68,156�94)9,931,843�06 Total 600 - Water & Sewer Operating Fund 20,000,000.00 20,016,406.25 (1,177.27)(1,177.27)15,228.98 20,015,228.98 900 - PEDC 3130ATE29 09/29/22 AGCY CALL FHLB 2,000,000�00 100�000 2,000,000�00 0�00 0�00 0�00 2,000,000�00 Total 900 - PEDC 2,000,000.00 2,000,000.00 0.00 0.00 0.00 2,000,000.00 Grand Total 58,000,000.00 58,021,500.01 (1,897.05)(1,897.05)19,602.96 58,019,602.96 Page 20 City of Pearland June 30, 2025 to June 30, 2026 Projected Cash Flows CUSIP Security Description Post Date Interest Principal Total Amount 100 - General Fund 91282CLH2 U�S� Treasury Note 09/02/25 93,750�00 93,750�00 3130ATE29 FHLB 09/29/25 21,875�00 21,875�00 3130ATE29 FHLB 09/29/25 1,000,000�00 1,000,000�00 91282CJK8 U�S� Treasury Note 11/17/25 231,250�00 231,250�00 3134HBUK5 FEDERAL HOME LOAN MORTGAGE CORP 12/02/25 200,000�00 200,000�00 3133ETJZ1 FEDERAL FARM CREDIT BANKS FUNDING CORP 12/05/25 193,750�00 193,750�00 91282CLH2 U�S� Treasury Note 03/02/26 93,750�00 93,750�00 91282CJK8 U�S� Treasury Note 05/15/26 231,250�00 231,250�00 3134HBUK5 FEDERAL HOME LOAN MORTGAGE CORP 06/02/26 200,000�00 200,000�00 3133ETJZ1 FEDERAL FARM CREDIT BANKS FUNDING CORP 06/05/26 193,750�00 193,750�00 600 - Water & Sewer Operating Fund 91282CKR1 U�S� Treasury Note 11/17/25 225,000�00 225,000�00 91282CND9 U�S� Treasury Note 11/17/25 187,500�00 187,500�00 91282CKR1 U�S� Treasury Note 05/15/26 225,000�00 225,000�00 91282CND9 U�S� Treasury Note 05/15/26 187,500�00 187,500�00 900 - PEDC 3130ATE29 FHLB 09/29/25 43,750�00 43,750�00 3130ATE29 FHLB 09/29/25 2,000,000�00 2,000,000�00 Grand Total 2,328,125.00 3,000,000.00 5,328,125.00 ©Hilltop Securities Asset Management, LLC. All rights reserved. Page 21 City of Pearland June 30, 2025 to June 30, 2026 Month and Year Interest Principal Total Amount September 2025 159,375�00 3,000,000�00 3,159,375�00 November 2025 643,750�00 643,750�00 December 2025 393,750�00 393,750�00 March 2026 93,750�00 93,750�00 May 2026 643,750�00 643,750�00 June 2026 393,750�00 393,750�00 Total 2,328,125.00 3,000,000.00 5,328,125.00 Projected Cash Flows Totals ©Hilltop Securities Asset Management, LLC. All rights reserved. City of Pearland As of June 30, 2025 Page 22©Hilltop Securities Asset Management, LLC. All rights reserved. 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(2) are not bank deposits; (3) are not guaranteed by any bank or by any other federal government agency� None of the 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 of the 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 of the 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 of the 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� ©Hilltop Securities Asset Management, LLC. All rights reserved. INVESTMENT REPORT City of Pearland Development Authority of Pearland April 1 to June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Investment Management Team Scott McIntyre Senior Portfolio Manager 512.481.2009 Scott.McIntyre@HilltopSecurities.com Greg Warner Senior Portfolio Manager 512.481.2012 Greg.Warner@HilltopSecurities.com Jodi Jones Investment Reporting Manager 512.481.2076 Jodi.Jones@HilltopSecurities.com Page 2 Contents Market Recap � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �3 Investment Officers’ Certification � � � � � � � � � � � � � � � � � � � � � � � � � � �4 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �5 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �6 Asset Allocation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �7 Credit Rating Summary � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �8 Benchmark Comparison� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �9 Fund Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 10 Detail of Security Holdings � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 11 Earned Income � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 12 Disclosures & Disclaimers � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 13 City of Pearland As of June 30, 2025 Page 3©Hilltop Securities Asset Management, LLC. All rights reserved. Market Recap The ominous soft data (survey) reports continued to accumulate in June, while the hard data reports held up surprisingly well� Bond market investors and Fed officials generally dismissed any signs of a solid economy and determined that it was simply a matter of time before tariff uncertainty pushed GDP growth lower� June kicked off with the ISM ser vices and manufacturing composite indexes both indicating contraction, common for the factory sector but rare for services� In fact, it was only the fourth time in the last 60 months that the services index had come in below 50� There was also an alarming drop in the new orders index, which fell into contraction territory for only the third time since 2020 at 46�5� Both prices paid indexes were well above 60 as purchasing managers had little choice but to pay higher prices for future shipments� But perhaps the most revealing part of the May ISM reports were in the comments, as one purchasing manager after another shared tariff frustrations: “no choice but to pass along price increases;” “ever-changing trade policies have wreaked havoc on the company’s ability to remain profitable;” and “tariffs alone have caused supply chain disruptions rivaling COVID-19�” The May ISM surveys clearly signaled U�S� businesses were increasingly stressed, and there is no indication that the stress-evoking import taxes will disappear� In fact, the 25% tax on steel and aluminum was increased to 50%� This will have a detrimental effect on U�S� construction costs as half of all aluminum, and a quarter of all steel, is imported� Rather than pay the enormous tariff rate on construction materials, many builders are likely to postpone projects� To a lesser degree, other industries will face the same decisions� In addition, the massive “Liberation Day” tariffs, announced in early April (before being quickly postponed for 90 days) will reemerge on July 9th, further clouding the U�S� business outlook� In the meantime, a widely anticipated rise in inflationary pressure and deterioration of labor market conditions has yet to fully emerge� In fact, U�S� businesses added +139k jobs to company payrolls in May, exceeding forecasts for the third straight month� However, downward revisions to the prior two months quietly subtracted -95k, taking the shine off the May headline� The unemployment rate held steady at 4�2%, although it would have been significantly higher if -626k Americans had not left the labor force in May, the largest monthly drop since 2023� Adding to those concerns, continuing claims for unemployment benefits climbed to the highest levels since November 2021� Thus, while headline labor numbers appeared healthy, underlying conditions worsened� Both CPI and PPI indicated extremely low inflation readings for May with overall and core rates up just +0�1%� For CPI, it was the fourth straight month in which the increase came in below the median forecast� On a year-over-year basis, headline CPI climbed from +2�3% to +2�4%, while the core rate held steady at +2�8%, matching a 50-month low from the previous month� However, the three-month annualized consumer inflation rate was just +1�7%� This is almost entirely the result of lower energy costs, which can be attributed to falling global demand� Unlike the labor market, which is clearly signaling future stress, the current inflation readings are not pointing to higher future prices� Not yet anyway� In mid-June, the FOMC voted unanimously to maintain the overnight target range at 4�25% - 4�50% for the fourth consecutive meeting� The updated summary of economic projection (SEP) indicated Fed officials expect inflation and unemployment to rise later this year, while GDP growth slows� The Fed’s “dot plot,” updated for the first time since March, continued to show two 25 basis point rate cuts in 2025� President Trump, eyeing the prospect of fading growth and dismissing the expected rise in inflationary pressure, grew increasingly frustrated with Fed Chairman Powell during the month, demanding that the overnight target rate be slashed by 200 to 300 basis points, immediately� The next FOMC meeting is at the end of July� There has been no indication that Fed officials will announce a rate cut on that date, although two Trump-appointed Fed Governors have recently suggested July should be in play� Yields moved lower in June as investors recalibrated future interest rate expectations� Even if the overnight funds target is lowered once or twice in 2025, the next Fed Chairman, expected to be nominated by Trump “very soon,” will certainly mirror the president’s push for dramatically lower interest rates next year� City of Pearland As of June 30, 2025 Page 4©Hilltop Securities Asset Management, LLC. All rights reserved.Page 4 Investment Officers Investment Officers’ Certification This report is prepared for the City of Pearland (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� Melissa Saxton Director of Finance Tenecha Williams Asst Finance Director Chan Tran Finance Analyst Page 5 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved.Page 5 Portfolio Overview Portfolio Summary Asset Allocation Prior 31 Mar-25 Current 30 Jun-25 Par Value 1,087,150�65 1,089,514�95 Original Cost 1,087,150�65 1,089,514�95 Book Value 1,087,150�65 1,089,514�95 Market Value 1,087,150�65 1,089,514�95 Accrued Interest 318�22 132�43 Book Value Plus Accrued 1,087,468�87 1,089,647�38 Market Value Plus Accrued 1,087,468�87 1,089,647�38 Net Unrealized Gain/(Loss)0�00 0�00 Prior 31 Mar-25 Current 30 Jun-25 Yield to Maturity 0�802%0�803% Yield to Worst 0�802%0�803% Days to Final Maturity 1 1 Days to Effective Maturity 1 1 Duration ---- Transaction Summary Transaction Type Quantity Principal Interest Total Amount Realized Gain/Loss Current Period 1 Apr-25 to 30 Jun-25 Interest Income 2,178�51 Net Amortization/Accretion Realized Gain/(Loss)0�00 Net Income 2,178�51 Fiscal Year-to-Date 1 Oct-24 to 30 Jun-25 Net Income 35,051�89 Portfolio CharacteristicsIncome Summary City of Pearland As of June 30, 2025 Page 6©Hilltop Securities Asset Management, LLC. All rights reserved. Maturity Distribution by Security Type Security Type Overnight 0-3 Months 3-6 Months 6-9 Months 9-12 Months 1-2 Years 2-3 Years 3-4 Years 4-5 Years Portfolio Total BANK DEP 1,048,704�18 ----------------1,048,704.18 MMFUND 40,810�77 ----------------40,810.77 Total 1,089,514.95 ----------------1,089,514.95 Portfolio Overview Top Ten Holdings Issuer Allocation WF 96�25% Regions 3�75% Maturity Distribution by Security Type City of Pearland As of June 30, 2025 Page 7©Hilltop Securities Asset Management, LLC. All rights reserved. Book Value Basis Security Distribution Security Type Prior Balance 31-Mar-25 Prior Allocation 31-Mar-25 Change in Allocation Current Balance 30-Jun-25 Current Allocation 30-Jun-25 Yield to Maturity BANK DEP 1,046,927�79 96�30%(0�05%)1,048,704�18 96�25%0�680% MMFUND 40,222�86 3�70%0�05%40,810�77 3�75%3�970% Portfolio Total 1,087,150.65 100.00%1,089,514.95 100.00%0.803% Asset Allocation Asset Allocation by Security Type as of Asset Allocation by Security Type as of 31-Mar-2025 30-Jun-2025 City of Pearland As of June 30, 2025 Page 8©Hilltop Securities Asset Management, LLC. All rights reserved. Credit Rating Summary Rating Distribution Allocation by Rating Book Value Portfolio Allocation Secured Deposits (Insured or Collateralized) Demand Deposits 1,048,704�18 96�25% Total Secured Deposits 1,048,704.18 96.25% Local Government Investment Pools & Money Market Funds AAA 40,810�77 3�75% Total Local Government Investment Pools & Money Market Funds 40,810.77 3.75% Portfolio Total 1,089,514.95 100.00% City of Pearland As of June 30, 2025 Page 9©Hilltop Securities Asset Management, LLC. All rights reserved. Yield Overview Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 City of Pearland ----------------------------0.83 0.83 2.18 2.20 2.10 2.09 0.80 0.80 3.84 0.80 6 Month CMT 5�20 5�29 5�38 5�47 5�50 5�48 5�43 5�39 5�36 5�33 5�33 5�34 5�34 5�29 5�16 5�00 4�84 4�66 4�50 4�39 4�34 4�30 4�28 4�27 TexStar 5�11 5�30 5�31 5�32 5�33 5�34 5�32 5�30 5�30 5�31 5�31 5�31 5�31 5�29 5�13 4�87 4�71 4�56 4�39 4�36 4�34 4�33 4�30 4�28 Benchmark Comparison Page 10 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Fund Overview Fund Name Prior Book Value Prior Market Value Changes to Market Value Current Book Value Current Market Value Net Income Days to Final Mty YTM YTW 920 - DAP 0�00 0�00 1,089,514�95 1,089,514�95 1,089,514�95 2,178�51 1 0�803%0�803% 920 - Development - TIRZ 1,087,150�65 1,087,150�65 (1,087,150�65)0�00 0�00 0�00 Total 1,087,150.65 1,087,150.65 2,364.30 1,089,514.95 1,089,514.95 2,178.51 1 0.803%0.803% City of Pearland As of June 30, 2025 Page 11©Hilltop Securities Asset Management, LLC. All rights reserved. Detail of Security Holdings CUSIP Settle Date Security Type Security Description CPN Maturity Date Next Call Date Call Type Par Value Purch Price Original Cost Book Value Mkt Price Market Value Days to Mty Days to Call YTM YTW Rating 920 - DAP RGNPRLDTSWP MMFUND Regions Bk Trust Sweep 06/30/25 40,810�77 100�000 40,810�77 40,810�77 100�000 40,810�77 1 3�970 3�970 AAA WFPRLDBUS+BANK DEP Wells Fargo - Business Cking Plus 06/30/25 1,048,704�18 100�000 1,048,704�18 1,048,704�18 100�000 1,048,704�18 1 0�680 0�680 SD Total 920 - DAP 1,089,514.95 1,089,514.95 1,089,514.95 1,089,514.95 1 0.803 0.803 Grand Total 1,089,514.95 1,089,514.95 1,089,514.95 1,089,514.95 1 0.803 0.803 Page 12 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Earned Income CUSIP Security Type Security Description Beginning Accrued Interest Earned Interest Rec'd/ Sold/Matured Interest Purchased Ending Accrued Disc Accr/Prem Amort Net Realized Gain/Loss Net Income 920 - DAP RGNPRLDTSWP MMFUND Regions Bk Trust Sweep 318�22 402�12 587�91 0�00 132�43 0�00 0�00 402�12 WFPRLDBUS+BANK DEP Wells Fargo - Business Cking Plus 0�00 1,776�39 1,776�39 0�00 0�00 0�00 0�00 1,776�39 Total 920 - DAP 318.22 2,178.51 2,364.30 0.00 132.43 0.00 0.00 2,178.51 Grand Total 318.22 2,178.51 2,364.30 0.00 132.43 0.00 0.00 2,178.51 City of Pearland As of June 30, 2025 Page 13©Hilltop Securities Asset Management, LLC. All rights reserved. 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 held away 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 of future 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 of fixed 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 of factors 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 of the 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 of the 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 of the 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 of the 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� INVESTMENT REPORT ©Hilltop Securities Asset Management, LLC. All rights reserved. City of Pearland Economic Development Corporation April 1 to June 30, 2 025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Investment Management Team Scott McIntyre Senior Portfolio Manager 512.481.2009 Scott.McIntyre@HilltopSecurities.com Greg Warner Senior Portfolio Manager 512.481.2012 Greg.Warner@HilltopSecurities.com Jodi Jones Investment Reporting Manager 512.481.2076 Jodi.Jones@HilltopSecurities.com Page 2 Contents Market Recap � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �3 Investment Officers’ Certification � � � � � � � � � � � � � � � � � � � � � � � � � � �4 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �5 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �6 Asset Allocation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �7 Credit Rating Summary � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �8 Benchmark Comparison� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �9 Fund Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 10 Detail of Security Holdings � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 11 Earned Income � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 12 Amortization and Accretion � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 13 Projected Cash Flows� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 14 Projected Cash Flows Totals � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 15 Disclosures & Disclaimers � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 16 City of Pearland As of June 30, 2025 Page 3©Hilltop Securities Asset Management, LLC. All rights reserved. Market Recap The ominous soft data (survey) reports continued to accumulate in June, while the hard data reports held up surprisingly well� Bond market investors and Fed officials generally dismissed any signs of a solid economy and determined that it was simply a matter of time before tariff uncertainty pushed GDP growth lower� June kicked off with the ISM services and manufacturing composite indexes both indicating contraction, common for the factory sector but rare for services� In fact, it was only the fourth time in the last 60 months that the services index had come in below 50� There was also an alarming drop in the new orders index, which fell into contraction territory for only the third time since 2020 at 46�5� Both prices paid indexes were well above 60 as purchasing managers had little choice but to pay higher prices for future shipments� But perhaps the most revealing part of the May ISM reports were in the comments, as one purchasing manager after another shared tariff frustrations: “no choice but to pass along price increases;” “ever-changing trade policies have wreaked havoc on the company’s ability to remain profitable;” and “tariffs alone have caused supply chain disruptions rivaling COVID-19�” The May ISM surveys clearly signaled U�S� businesses were increasingly stressed, and there is no indication that the stress-evoking import taxes will disappear� In fact, the 25% tax on steel and aluminum was increased to 50%� This will have a detrimental effect on U�S� construction costs as half of all aluminum, and a quarter of all steel, is imported� Rather than pay the enormous tariff rate on construction materials, many builders are likely to postpone projects� To a lesser degree, other industries will face the same decisions� In addition, the massive “Liberation Day” tariffs, announced in early April (before being quickly postponed for 90 days) will reemerge on July 9th, further clouding the U�S� business outlook� In the meantime, a widely anticipated rise in inflationary pressure and deterioration of labor market conditions has yet to fully emerge� In fact, U�S� businesses added +139k jobs to company payrolls in May, exceeding forecasts for the third straight month� However, downward revisions to the prior two months quietly subtracted -95k, taking the shine off the May headline� The unemployment rate held steady at 4�2%, although it would have been significantly higher if -626k Americans had not left the labor force in May, the largest monthly drop since 2023� Adding to those concerns, continuing claims for unemployment benefits climbed to the highest levels since November 2021� Thus, while headline labor numbers appeared healthy, underlying conditions worsened� Both CPI and PPI indicated extremely low inflation readings for May with overall and core rates up just +0�1%� For CPI, it was the fourth straight month in which the increase came in below the median forecast� On a year-over-year basis, headline CPI climbed from +2�3% to +2�4%, while the core rate held steady at +2�8%, matching a 50-month low from the previous month� However, the three-month annualized consumer inflation rate was just +1�7%� This is almost entirely the result of lower energy costs, which can be attributed to falling global demand� Unlike the labor market, which is clearly signaling future stress, the current inflation readings are not pointing to higher future prices� Not yet anyway� In mid-June, the FOMC voted unanimously to maintain the overnight target range at 4�25% - 4�50% for the fourth consecutive meeting� The updated summary of economic projection (SEP) indicated Fed officials expect inflation and unemployment to rise later this year, while GDP growth slows� The Fed’s “dot plot,” updated for the first time since March, continued to show two 25 basis point rate cuts in 2025� President Trump, eyeing the prospect of fading growth and dismissing the expected rise in inflationary pressure, grew increasingly frustrated with Fed Chairman Powell during the month, demanding that the overnight target rate be slashed by 200 to 300 basis points, immediately� The next FOMC meeting is at the end of July� There has been no indication that Fed officials will announce a rate cut on that date, although two Trump-appointed Fed Governors have recently suggested July should be in play� Yields moved lower in June as investors recalibrated future interest rate expectations� Even if the overnight funds target is lowered once or twice in 2025, the next Fed Chairman, expected to be nominated by Trump “very soon,” will certainly mirror the president’s push for dramatically lower interest rates next year� City of Pearland As of June 30, 2025 Page 4©Hilltop Securities Asset Management, LLC. All rights reserved.Page 4 Investment Officers Investment Officers’ Certification This report is prepared for the City of Pearland (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� Melissa Saxton Finance Director Tenecha Williams Asst Finance Director Chan Tran Finance Analyst Page 5 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved.Page 5 Portfolio Overview Portfolio Summary Asset Allocation Prior 31 Mar-25 Current 30 Jun-25 Par Value 40,641,370�47 43,131,764�97 Original Cost 40,641,370�47 43,131,764�97 Book Value 40,641,370�47 43,131,764�97 Market Value 40,642,002�47 43,131,032�97 Accrued Interest 28,539�98 49,722�81 Book Value Plus Accrued 40,669,910�45 43,181,487�78 Market Value Plus Accrued 40,670,542�45 43,180,755�78 Net Unrealized Gain/(Loss)632�00 (732�00) Prior 31 Mar-25 Current 30 Jun-25 Yield to Maturity 4�389%4�393% Yield to Worst 4�389%4�393% Days to Final Maturity 10 5 Days to Effective Maturity 10 5 Duration 0�48 0�24 Transaction Summary Transaction Type Quantity Principal Interest Total Amount Realized Gain/Loss Current Period 1 Apr-25 to 30 Jun-25 Interest Income 447,303�58 Net Amortization/Accretion 0�00 Realized Gain/(Loss)0�00 Net Income 447,303�58 Fiscal Year-to-Date 1 Oct-24 to 30 Jun-25 Net Income 1,346,295�35 Portfolio CharacteristicsIncome Summary City of Pearland As of June 30, 2025 Page 6©Hilltop Securities Asset Management, LLC. All rights reserved. Maturity Distribution by Security Type Security Type Overnight 0-3 Months 3-6 Months 6-9 Months 9-12 Months 1-2 Years 2-3 Years 3-4 Years 4-5 Years Portfolio Total AGCY CALL ----2,000,000�00 ------------2,000,000.00 LGIP 30,895,599�01 ----------------30,895,599.01 MMFUND 10,236,165�96 ----------------10,236,165.96 Total 41,131,764.97 --2,000,000.00 ------------43,131,764.97 Portfolio Overview Top Ten Holdings Issuer Allocation TXCLASS 71�63% WF 23�73% Federal Home Loan Banks 4�64% Maturity Distribution by Security Type City of Pearland As of June 30, 2025 Page 7©Hilltop Securities Asset Management, LLC. All rights reserved. Book Value Basis Security Distribution Security Type Prior Balance 31-Mar-25 Prior Allocation 31-Mar-25 Change in Allocation Current Balance 30-Jun-25 Current Allocation 30-Jun-25 Yield to Maturity AGCY CALL 2,000,000�00 4�92%(0�28%)2,000,000�00 4�64%4�375% LGIP 30,557,393�68 75�19%(3�56%)30,895,599�01 71�63%4�402% MMFUND 8,083,976�79 19�89%3�84%10,236,165�96 23�73%4�160% Portfolio Total 40,641,370.47 100.00%43,131,764.97 100.00%4.343% Asset Allocation Asset Allocation by Security Type as of Asset Allocation by Security Type as of 31-Mar-2025 30-Jun-2025 City of Pearland As of June 30, 2025 Page 8©Hilltop Securities Asset Management, LLC. All rights reserved. Credit Rating Summary Rating Distribution Allocation by Rating Book Value Portfolio Allocation Local Government Investment Pools & Money Market Funds AAA 41,131,764�97 95�36% Total Local Government Investment Pools & Money Market Funds 41,131,764.97 95.36% Long Term Rating Distribution AA+2,000,000�00 4�64% Total Long Term Rating Distribution 2,000,000.00 4.64% Portfolio Total 43,131,764.97 100.00% City of Pearland As of June 30, 2025 Page 9©Hilltop Securities Asset Management, LLC. All rights reserved. Yield Overview Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 City of Pearland ----------------------------5.20 4.96 4.81 4.67 4.48 4.44 4.39 4.39 4.41 4.39 6 Month CMT 5�20 5�29 5�38 5�47 5�50 5�48 5�43 5�39 5�36 5�33 5�33 5�34 5�34 5�29 5�16 5�00 4�84 4�66 4�50 4�39 4�34 4�30 4�28 4�27 TexStar 5�11 5�30 5�31 5�32 5�33 5�34 5�32 5�30 5�30 5�31 5�31 5�31 5�31 5�29 5�13 4�87 4�71 4�56 4�39 4�36 4�34 4�33 4�30 4�28 Benchmark Comparison Page 10 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Fund Overview Fund Name Prior Book Value Prior Market Value Changes to Market Value Current Book Value Current Market Value Net Income Days to Final Mty YTM YTW 900 - Economic Development 40,641,370�47 40,642,002�47 (40,642,002�47)0�00 0�00 0�00 900 - PEDC 0�00 0�00 43,131,032�97 43,131,764�97 43,131,032�97 447,303�58 5 4�343%4�343% Total 40,641,370.47 40,642,002.47 2,489,030.50 43,131,764.97 43,131,032.97 447,303.58 5 4.355%4.355% City of Pearland As of June 30, 2025 Page 11©Hilltop Securities Asset Management, LLC. All rights reserved. Detail of Security Holdings CUSIP Settle Date Security Type Security Description CPN Maturity Date Next Call Date Call Type Par Value Purch Price Original Cost Book Value Mkt Price Market Value Days to Mty Days to Call YTM YTW Rating 900 - PEDC TXCLASS LGIP Texas CLASS 06/30/25 30,895,599�01 100�000 30,895,599�01 30,895,599�01 100�000 30,895,599�01 1 4�402 4�402 AAA WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 10,236,165�96 100�000 10,236,165�96 10,236,165�96 100�000 10,236,165�96 1 4�160 4�160 AAA 3130ATE29 09/29/22 AGCY CALL FHLB 4�375 09/29/25 Expired 2,000,000�00 100�000 2,000,000�00 2,000,000�00 99�963 1,999,268�00 91 4�375 4�375 AA+ Total 900 - PEDC 43,131,764.97 43,131,764.97 43,131,764.97 43,131,032.97 5 4.343 4.343 Grand Total 43,131,764.97 43,131,764.97 43,131,764.97 43,131,032.97 5 4.343 4.343 Page 12 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Earned Income CUSIP Security Type Security Description Beginning Accrued Interest Earned Interest Rec'd/ Sold/Matured Interest Purchased Ending Accrued Disc Accr/Prem Amort Net Realized Gain/Loss Net Income 900 - PEDC TXCLASS LGIP Texas CLASS 0�00 338,205�33 338,205�33 0�00 0�00 0�00 0�00 338,205�33 WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)28,053�87 87,223�25 87,915�42 0�00 27,361�70 0�00 0�00 87,223�25 3130ATE29 AGCY CALL FHLB 486�11 21,875�00 0�00 0�00 22,361�11 0�00 0�00 21,875�00 Total 900 - PEDC 28,539.98 447,303.58 426,120.75 0.00 49,722.81 0.00 0.00 447,303.58 Grand Total 28,539.98 447,303.58 426,120.75 0.00 49,722.81 0.00 0.00 447,303.58 Page 13 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Amortization and Accretion CUSIP Settle Date Security Type Security Description Purchase Qty Orig Price Original Cost Amort/Accr for Period Total Amort/Accr Since Purch Remaining Disc/ Premium Ending Book Value 900 - PEDC 3130ATE29 09/29/22 AGCY CALL FHLB 2,000,000�00 100�000 2,000,000�00 0�00 0�00 0�00 2,000,000�00 Total 900 - PEDC 2,000,000.00 2,000,000.00 0.00 0.00 0.00 2,000,000.00 Grand Total 2,000,000.00 2,000,000.00 0.00 0.00 0.00 2,000,000.00 Page 14 City of Pearland June 30, 2025 to June 30, 2026 Projected Cash Flows CUSIP Security Description Post Date Interest Principal Total Amount 900 - PEDC 3130ATE29 FHLB 09/29/25 43,750�00 43,750�00 3130ATE29 FHLB 09/29/25 2,000,000�00 2,000,000�00 Grand Total 43,750.00 2,000,000.00 2,043,750.00 ©Hilltop Securities Asset Management, LLC. All rights reserved. Page 15 City of Pearland June 30, 2025 to June 30, 2026 Month and Year Interest Principal Total Amount September 2025 43,750�00 2,000,000�00 2,043,750�00 Total 43,750.00 2,000,000.00 2,043,750.00 Projected Cash Flows Totals ©Hilltop Securities Asset Management, LLC. All rights reserved. City of Pearland As of June 30, 2025 Page 16©Hilltop Securities Asset Management, LLC. All rights reserved. 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 held away 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 of future 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 of fixed 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 of factors 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 of the 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 of the 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 of the 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 of the 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� INVESTMENT REPORT ©Hilltop Securities Asset Management, LLC. All rights reserved. City of Pearland Tax Increment Reinvestment Zone April 1 to June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Investment Management Team Scott McIntyre Senior Portfolio Manager 512.481.2009 Scott.McIntyre@HilltopSecurities.com Greg Warner Senior Portfolio Manager 512.481.2012 Greg.Warner@HilltopSecurities.com Jodi Jones Investment Reporting Manager 512.481.2076 Jodi.Jones@HilltopSecurities.com Page 2 Contents Market Recap � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �3 Investment Officers’ Certification � � � � � � � � � � � � � � � � � � � � � � � � � � �4 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �5 Portfolio Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �6 Asset Allocation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �7 Credit Rating Summary � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �8 Benchmark Comparison� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �9 Fund Overview � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 10 Detail of Security Holdings � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 11 Earned Income � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 12 Disclosures & Disclaimers � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 13 City of Pearland As of June 30, 2025 Page 3©Hilltop Securities Asset Management, LLC. All rights reserved. Market Recap The ominous soft data (survey) reports continued to accumulate in June, while the hard data reports held up surprisingly well� Bond market investors and Fed officials generally dismissed any signs of a solid economy and determined that it was simply a matter of time before tariff uncertainty pushed GDP growth lower� June kicked off with the ISM services and manufacturing composite indexes both indicating contraction, common for the factory sector but rare for services� In fact, it was only the fourth time in the last 60 months that the services index had come in below 50� There was also an alarming drop in the new orders index, which fell into contraction territory for only the third time since 2020 at 46�5� Both prices paid indexes were well above 60 as purchasing managers had little choice but to pay higher prices for future shipments� But perhaps the most revealing part of the May ISM reports were in the comments, as one purchasing manager after another shared tariff frustrations: “no choice but to pass along price increases;” “ever-changing trade policies have wreaked havoc on the company’s ability to remain profitable;” and “tariffs alone have caused supply chain disruptions rivaling COVID-19�” The May ISM surveys clearly signaled U�S� businesses were increasingly stressed, and there is no indication that the stress-evoking import taxes will disappear� In fact, the 25% tax on steel and aluminum was increased to 50%� This will have a detrimental effect on U�S� construction costs as half of all aluminum, and a quarter of all steel, is imported� Rather than pay the enormous tariff rate on construction materials, many builders are likely to postpone projects� To a lesser degree, other industries will face the same decisions� In addition, the massive “Liberation Day” tariffs, announced in early April (before being quickly postponed for 90 days) will reemerge on July 9th, further clouding the U�S� business outlook� In the meantime, a widely anticipated rise in inflationary pressure and deterioration of labor market conditions has yet to fully emerge� In fact, U�S� businesses added +139k jobs to company payrolls in May, exceeding forecasts for the third straight month� However, downward revisions to the prior two months quietly subtracted -95k, taking the shine off the May headline� The unemployment rate held steady at 4�2%, although it would have been significantly higher if -626k Americans had not left the labor force in May, the largest monthly drop since 2023� Adding to those concerns, continuing claims for unemployment benefits climbed to the highest levels since November 2021� Thus, while headline labor numbers appeared healthy, underlying conditions worsened� Both CPI and PPI indicated extremely low inflation readings for May with overall and core rates up just +0�1%� For CPI, it was the fourth straight month in which the increase came in below the median forecast� On a year-over-year basis, headline CPI climbed from +2�3% to +2�4%, while the core rate held steady at +2�8%, matching a 50-month low from the previous month� However, the three-month annualized consumer inflation rate was just +1�7%� This is almost entirely the result of lower energy costs, which can be attributed to falling global demand� Unlike the labor market, which is clearly signaling future stress, the current inflation readings are not pointing to higher future prices� Not yet anyway� In mid-June, the FOMC voted unanimously to maintain the overnight target range at 4�25% - 4�50% for the fourth consecutive meeting� The updated summary of economic projection (SEP) indicated Fed officials expect inflation and unemployment to rise later this year, while GDP growth slows� The Fed’s “dot plot,” updated for the first time since March, continued to show two 25 basis point rate cuts in 2025� President Trump, eyeing the prospect of fading growth and dismissing the expected rise in inflationary pressure, grew increasingly frustrated with Fed Chairman Powell during the month, demanding that the overnight target rate be slashed by 200 to 300 basis points, immediately� The next FOMC meeting is at the end of July� There has been no indication that Fed officials will announce a rate cut on that date, although two Trump-appointed Fed Governors have recently suggested July should be in play� Yields moved lower in June as investors recalibrated future interest rate expectations� Even if the overnight funds target is lowered once or twice in 2025, the next Fed Chairman, expected to be nominated by Trump “very soon,” will certainly mirror the president’s push for dramatically lower interest rates next year� City of Pearland As of June 30, 2025 Page 4©Hilltop Securities Asset Management, LLC. All rights reserved.Page 4 Investment Officers Investment Officers’ Certification This report is prepared for the City of Pearland (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� Melissa Saxton Director of Finance Tenecha Williams Asst Finance Director Chan Tran Finance Analyst Page 5 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved.Page 5 Portfolio Overview Portfolio Summary Asset Allocation Prior 31 Mar-25 Current 30 Jun-25 Par Value 23,228,741�41 34,649,275�72 Original Cost 23,228,741�41 34,649,275�72 Book Value 23,228,741�41 34,649,275�72 Market Value 23,228,741�41 34,649,275�72 Accrued Interest 39,173�57 36,309�25 Book Value Plus Accrued 23,267,914�98 34,685,584�97 Market Value Plus Accrued 23,267,914�98 34,685,584�97 Net Unrealized Gain/(Loss)0�00 0�00 Prior 31 Mar-25 Current 30 Jun-25 Yield to Maturity 2�395%2�126% Yield to Worst 2�395%2�126% Days to Final Maturity 1 1 Days to Effective Maturity 1 1 Duration ---- Transaction Summary Transaction Type Quantity Principal Interest Total Amount Realized Gain/Loss Current Period 1 Apr-25 to 30 Jun-25 Interest Income 146,884�03 Net Amortization/Accretion Realized Gain/(Loss)0�00 Net Income 146,884�03 Fiscal Year-to-Date 1 Oct-24 to 30 Jun-25 Net Income 320,991�98 Portfolio CharacteristicsIncome Summary City of Pearland As of June 30, 2025 Page 6©Hilltop Securities Asset Management, LLC. All rights reserved. Maturity Distribution by Security Type Security Type Overnight 0-3 Months 3-6 Months 6-9 Months 9-12 Months 1-2 Years 2-3 Years 3-4 Years 4-5 Years Portfolio Total BANK DEP 21,068,779�98 ----------------21,068,779.98 MMFUND 13,580,495�74 ----------------13,580,495.74 Total 34,649,275.72 ----------------34,649,275.72 Portfolio Overview Top Ten Holdings Issuer Allocation WF 100�00% Maturity Distribution by Security Type City of Pearland As of June 30, 2025 Page 7©Hilltop Securities Asset Management, LLC. All rights reserved. Book Value Basis Security Distribution Security Type Prior Balance 31-Mar-25 Prior Allocation 31-Mar-25 Change in Allocation Current Balance 30-Jun-25 Current Allocation 30-Jun-25 Yield to Maturity BANK DEP 11,940,520�61 51�40%9�40%21,068,779�98 60�81%0�680% MMFUND 11,288,220�80 48�60%(9�40%)13,580,495�74 39�19%4�160% Portfolio Total 23,228,741.41 100.00%34,649,275.72 100.00%2.044% Asset Allocation Asset Allocation by Security Type as of Asset Allocation by Security Type as of 31-Mar-2025 30-Jun-2025 City of Pearland As of June 30, 2025 Page 8©Hilltop Securities Asset Management, LLC. All rights reserved. Credit Rating Summary Rating Distribution Allocation by Rating Book Value Portfolio Allocation Secured Deposits (Insured or Collateralized) Demand Deposits 21,068,779�98 60�81% Total Secured Deposits 21,068,779.98 60.81% Local Government Investment Pools & Money Market Funds AAA 13,580,495�74 39�19% Total Local Government Investment Pools & Money Market Funds 13,580,495.74 39.19% Portfolio Total 34,649,275.72 100.00% City of Pearland As of June 30, 2025 Page 9©Hilltop Securities Asset Management, LLC. All rights reserved. Yield Overview Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 City of Pearland ----------------------------1.04 1.03 1.18 2.46 2.31 2.40 2.40 2.13 0.68 2.13 6 Month CMT 5�20 5�29 5�38 5�47 5�50 5�48 5�43 5�39 5�36 5�33 5�33 5�34 5�34 5�29 5�16 5�00 4�84 4�66 4�50 4�39 4�34 4�30 4�28 4�27 TexStar 5�11 5�30 5�31 5�32 5�33 5�34 5�32 5�30 5�30 5�31 5�31 5�31 5�31 5�29 5�13 4�87 4�71 4�56 4�39 4�36 4�34 4�33 4�30 4�28 Benchmark Comparison Page 10 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Fund Overview Fund Name Prior Book Value Prior Market Value Changes to Market Value Current Book Value Current Market Value Net Income Days to Final Mty YTM YTW 930 - TIRZ 0�00 0�00 34,649,275�72 34,649,275�72 34,649,275�72 146,884�03 1 2�044%2�044% 930 - TIRZ II Shadow Creek 23,228,741�41 23,228,741�41 (23,228,741�41)0�00 0�00 0�00 Total 23,228,741.41 23,228,741.41 11,420,534.31 34,649,275.72 34,649,275.72 146,884.03 1 2.064%2.064% City of Pearland As of June 30, 2025 Page 11©Hilltop Securities Asset Management, LLC. All rights reserved. Detail of Security Holdings CUSIP Settle Date Security Type Security Description CPN Maturity Date Next Call Date Call Type Par Value Purch Price Original Cost Book Value Mkt Price Market Value Days to Mty Days to Call YTM YTW Rating 930 - TIRZ WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)06/30/25 13,580,495�74 100�000 13,580,495�74 13,580,495�74 100�000 13,580,495�74 1 4�160 4�160 AAA WFPRLDCOM+BANK DEP Wells Fargo - Commercial Cking (Int)06/30/25 21,068,779�98 100�000 21,068,779�98 21,068,779�98 100�000 21,068,779�98 1 0�680 0�680 SD Total 930 - TIRZ 34,649,275.72 34,649,275.72 34,649,275.72 34,649,275.72 1 2.044 2.044 Grand Total 34,649,275.72 34,649,275.72 34,649,275.72 34,649,275.72 1 2.044 2.044 Page 12 City of Pearland April 1, 2025 - June 30, 2025 ©Hilltop Securities Asset Management, LLC. All rights reserved. Earned Income CUSIP Security Type Security Description Beginning Accrued Interest Earned Interest Rec'd/ Sold/Matured Interest Purchased Ending Accrued Disc Accr/Prem Amort Net Realized Gain/Loss Net Income 930 - TIRZ WF-GVIXX MMFUND Wells Fargo Gov MM Sweep (Allspring) (GVIXX)39,173�57 118,365�95 121,230�27 0�00 36,309�25 0�00 0�00 118,365�95 WFPRLDCOM+BANK DEP Wells Fargo - Commercial Cking (Int)0�00 28,518�08 28,518�08 0�00 0�00 0�00 0�00 28,518�08 Total 930 - TIRZ 39,173.57 146,884.03 149,748.35 0.00 36,309.25 0.00 0.00 146,884.03 Grand Total 39,173.57 146,884.03 149,748.35 0.00 36,309.25 0.00 0.00 146,884.03 City of Pearland As of June 30, 2025 Page 13©Hilltop Securities Asset Management, LLC. All rights reserved. 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