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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-50245
 HOPE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware95-4849715
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

3200 Wilshire Boulevard, Suite 1400
Los Angeles, California 90010
(Address of principal executives offices, including zip code)
(213) 639-1700
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.001 per shareHOPENASDAQ Global Select Market
(Title of class)(Trading Symbol)(Name of exchange on which registered)
______________________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐   No  ☒
As of May 3, 2023, there were 119,924,039 shares of Hope Bancorp, Inc. common stock outstanding.



Table of Contents
 
  Page
Item 1.
Consolidated Statements of Financial Condition (Unaudited)
Consolidated Statements of Income (Unaudited)
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
Consolidated Statements of Cash Flows (Unaudited)
1. Hope Bancorp, Inc.
2. Basis of Presentation
3. Earnings Per Share (“EPS”)
4. Equity Investments
5. Investment Securities
6. Loans Receivable and Allowance for Credit Losses
7. Leases
8. Deposits
9. Borrowings
10. Convertible Notes and Subordinated Debentures
11. Derivative Financial Instruments
12. Commitments and Contingencies
13. Goodwill, Intangible Assets, and Servicing Assets
14. Income Taxes
15. Fair Value Measurements
16. Stockholders’ Equity
17. Stock-Based Compensation
18. Regulatory Matters
19. Revenue Recognition
Item 2.
Item 3.
Item 4.
Item 1.LEGAL PROCEEDINGS
Item 1A.RISK FACTORS
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item 3.DEFAULTS UPON SENIOR SECURITIES
Item 4.MINE SAFETY DISCLOSURES
Item 5.OTHER INFORMATION
Item 6.EXHIBITS
INDEX TO EXHIBITS
SIGNATURES

2

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the business environment in which we operate, projections of future performance, perceived opportunities in the market, and statements regarding our business strategies, objectives and vision. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “projects,” “forecasts,” “estimates” or similar expressions. With respect to any such forward-looking statements, the Company claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, trends, uncertainties, and factors that are beyond the Company’s control or ability to predict. The Company’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The risks and uncertainties include: the COVID-19 pandemic and its impact on our financial position, results of operations, liquidity, and capitalization; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying the Company’s allowances for credit losses; geopolitical instability or unrest; and regulatory risks associated with current and future regulations. For additional information concerning these and other risk factors, see Part I, Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023, as such information may be updated from time to time in subsequent Quarterly Reports on Form 10-Q that we file with the SEC.

Due to the risks and uncertainties we face, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Report, which speak only as of the date of this Report, or to make predictions about future performance based solely on historical financial information. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.


3

PART I
FINANCIAL INFORMATION

Item 1.Financial Statements

HOPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
 March 31,
2023		December 31,
2022
ASSETS(Dollars in thousands, except share data)
Cash and cash equivalents:
Cash and due from banks$212,485 $213,774 
Interest earning cash in other banks2,000,152 293,002 
Total cash and cash equivalents2,212,637 506,776 
Interest earning deposits in other financial institutions— 735 
Investment securities available for sale, at fair value1,959,715 1,972,129 
Investment securities held to maturity, at amortized cost; fair value of $263,094 and $258,407 at March 31, 2023 and December 31, 2022, respectively
272,274 271,066 
Equity investments42,712 42,396 
Loans held for sale, at the lower of cost or fair value125,268 49,245 
Loans receivable, net of allowance for credit losses of $163,544 and $162,359 at March 31, 2023 and December 31, 2022, respectively
14,901,305 15,241,181 
Other real estate owned (“OREO”), net938 2,418 
Federal Home Loan Bank (“FHLB”) stock, at cost17,250 18,630 
Premises and equipment, net 47,887 46,859 
Accrued interest receivable57,021 55,460 
Deferred tax assets, net139,262 150,409 
Customers’ liabilities on acceptances1,267 818 
Bank owned life insurance (“BOLI”)87,842 77,078 
Investments in affordable housing partnerships45,995 47,711 
Operating lease right-of-use assets (“ROU”), net53,211 55,034 
Goodwill464,450 464,450 
Core deposit intangible assets, net5,278 5,726 
Servicing assets, net11,628 11,628 
Other assets122,944 144,742 
Total assets$20,568,884 $19,164,491 


(Continued)
4

HOPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
 March 31,
2023		December 31,
2022
LIABILITIES AND STOCKHOLDERS’ EQUITY(Dollars in thousands, except share data)
LIABILITIES:
Deposits:
Noninterest bearing$4,504,621 $4,849,493 
Interest bearing:
Money market and NOW accounts4,331,998 5,615,784 
Savings deposits231,704 283,464 
Time deposits6,759,886 4,990,060 
Total deposits15,828,209 15,738,801 
FHLB and Federal Reserve Bank (“FRB”) borrowings2,130,000 865,000 
Convertible notes, net206,658 217,148 
Subordinated debentures, net106,875 106,565 
Accrued interest payable53,818 26,668 
Acceptances outstanding1,267 818 
Operating lease liabilities57,500 59,088 
Commitments to fund investments in affordable housing partnerships9,608 11,792 
Other liabilities116,369 119,283 
Total liabilities$18,510,304 $17,145,163 
Commitments and contingent liabilities (Note 12)
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value; 150,000,000 authorized shares: issued and outstanding 137,248,567 and 119,865,732 shares, respectively, at March 31, 2023, and issued and outstanding 136,878,044 and 119,495,209 shares, respectively, at December 31, 2022
$137 $137 
Additional paid-in capital1,430,977 1,431,003 
Retained earnings1,106,390 1,083,712 
Treasury stock, at cost; 17,382,835 and 17,382,835 shares at March 31, 2023 and December 31, 2022, respectively
(264,667)(264,667)
Accumulated other comprehensive loss, net(214,257)(230,857)
Total stockholders’ equity2,058,580 2,019,328 
Total liabilities and stockholders’ equity$20,568,884 $19,164,491 


See accompanying Notes to Consolidated Financial Statements (Unaudited)

5

HOPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended March 31,
 20232022
(Dollars in thousands, except per share data)
INTEREST INCOME:
Interest and fees on loans$215,935 $132,672 
Interest on investment securities15,125 11,656 
Interest on cash and deposits at other banks6,641 137 
Interest on other investments695 407 
Total interest income238,396 144,872 
INTEREST EXPENSE:
Interest on deposits94,067 8,676 
Interest on FHLB and FRB borrowings6,698 687 
Interest on other borrowings and convertible notes3,753 2,333 
Total interest expense104,518 11,696 
NET INTEREST INCOME BEFORE PROVISION (CREDIT) FOR CREDIT LOSSES133,878 133,176 
PROVISION (CREDIT) FOR CREDIT LOSSES1,700 (11,000)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES132,178 144,176 
NONINTEREST INCOME:
Service fees on deposit accounts2,221 1,974 
International service fees1,088 794 
Wire transfer fees773 900 
Swap fees42 785 
Net gains on sales of SBA loans2,225 5,603 
Net gains on sales of residential mortgage loans64 757 
Other income and fees4,565 2,373 
Total noninterest income10,978 13,186 
NONINTEREST EXPENSE:
Salaries and employee benefits57,169 47,745 
Occupancy7,521 7,335 
Furniture and equipment5,058 4,644 
Data processing and communications2,822 2,461 
Professional fees1,543 2,211 
Amortization of investments in affordable housing partnerships1,716 2,019 
FDIC assessments1,781 1,569 
Earnings credit rebate4,427 476 
Other8,317 6,913 
Total noninterest expense90,354 75,373 
INCOME BEFORE INCOME TAXES52,802 81,989 
INCOME TAX PROVISION13,681 21,251 
NET INCOME$39,121 $60,738 
EARNINGS PER COMMON SHARE
Basic$0.33 $0.51 
Diluted$0.33 $0.50 


See accompanying Notes to Consolidated Financial Statements (Unaudited)
6

HOPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 Three Months Ended March 31,
 20232022
(Dollars in thousands)
Net income$39,121 $60,738 
Other comprehensive income (loss):
Change in unrealized net holding gains (losses) on securities available for sale31,215 (141,272)
Change in unrealized net holding (losses) gains on interest rate contracts used in cash flow hedges(5,938)4,002 
Reclassification adjustments for net (gains) losses realized in net income(1,738)64 
Tax effect(6,939)40,453 
Other comprehensive income (loss), net of tax16,600 (96,753)
Total comprehensive income (loss)$55,721 $(36,015)


See accompanying Notes to Consolidated Financial Statements (Unaudited)

7

HOPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Common stockAdditional paid-in capitalRetained
earnings		Treasury stockAccumulated other comprehensive loss, netTotal
stockholders’ equity
 SharesAmount
 (Dollars in thousands, except share and per share data)
BALANCE, DECEMBER 31, 2021120,006,452 $136 $1,421,698 $932,561 $(250,000)$(11,412)$2,092,983 
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations321,237 1 530 531 
Stock-based compensation374 374 
Cash dividends declared on common stock ($0.14 per share)
(16,816)(16,816)
Comprehensive loss:
Net income60,738 60,738 
Other comprehensive loss(96,753)(96,753)
BALANCE, MARCH 31, 2022120,327,689 $137 $1,422,602 $976,483 $(250,000)$(108,165)$2,041,057 
BALANCE, DECEMBER 31, 2022119,495,209 $137 $1,431,003 $1,083,712 $(264,667)$(230,857)$2,019,328 
Adoption of ASU 2022-02407 407 
Adoption of ASU 2022-02 tax impact(120)(120)
Issuance of shares pursuant to various stock plans, net of forfeitures and tax withholding cancellations370,523 — 
Stock-based compensation(26)(26)
Cash dividends declared on common stock ($0.14 per share)
(16,730)(16,730)
Comprehensive income:
Net income39,121 39,121 
Other comprehensive income16,600 16,600 
BALANCE, MARCH 31, 2023119,865,732 $137 $1,430,977 $1,106,390 $(264,667)$(214,257)$2,058,580 


See accompanying Notes to Consolidated Financial Statements (Unaudited)

8

HOPE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
 20232022
 (Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$39,121 $60,738 
Adjustments to reconcile net income to net cash from operating activities:
Discount accretion, net of depreciation and amortization3,850 6,201 
Stock-based compensation expense2,351 2,598 
Provision (credit) for credit losses1,700 (11,000)
Provision for unfunded loan commitments1,620 200 
Provision for accrued interest receivables on loans— 200 
Valuation adjustment of OREO— 276 
Net gains on sales of loans(2,244)(6,360)
Gains on BOLI(351)(309)
Net losses (gains) on sales of OREO271 (20)
Net change in fair value of equity investments with readily determinable fair value(69)1,247 
Amortization of investments in affordable housing partnerships1,640 1,943 
Gain on debt extinguishment(236)— 
Net change in deferred income taxes4,088 65 
Proceeds from sales of loans held for sale12,883 88,359 
Originations of loans held for sale(23,385)(16,916)
Originations of servicing assets(965)(1,463)
Net change in accrued interest receivable(2,544)3,693 
Net change in other assets15,798 31,861 
Net change in accrued interest payable27,150 554 
Net change in other liabilities(4,534)21,795 
Net cash provided by operating activities76,144 183,662 
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of interest earning deposits in other financial institutions735 1,224 
Investment securities available for sale:
Purchase of securities(2,775)(85,171)
Proceeds from matured, called, or paid-down securities45,038 114,879 
Investment securities held to maturity:
Purchase of securities(5,545)— 
Proceeds from matured, called, or paid-down securities5,357 — 
Purchase of equity investments(247)— 
Proceeds from sales of other loans held for sale previously classified as held for investment99,180 18,711 
Purchase of loans receivable— (27,936)
Net change in loans receivable176,163 (165,294)
Proceeds from sales of OREO1,209 331 
Purchase of FHLB stock(4,650)(3,300)
Redemption of FHLB stock6,030 1,650 
Purchase of premises and equipment(2,992)(2,146)
Purchase of BOLI policy(11,000)— 
Proceeds from BOLI death benefits587 — 
Investments in affordable housing partnerships(2,184)(672)
Net cash provided by (used in) investing activities304,906 (147,724)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits89,408 (525,322)
Proceeds from FHLB advances4,200,000 3,123,000 
Repayment of FHLB advances(4,700,000)(2,723,000)
Proceeds from FRB borrowings17,132,000 121,000 
Repayment of FRB borrowings(15,367,000)(49,000)
Repurchase of convertible debt(10,490)— 
Cash dividends paid on common stock(16,730)(16,816)
Taxes paid in net settlement of restricted stock(2,377)(2,224)
Issuance of additional stock pursuant to various stock plans— 531 
Net cash provided by (used in) financing activities1,324,811 (71,831)
NET CHANGE IN CASH AND CASH EQUIVALENTS1,705,861 (35,893)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD506,776 316,266 
CASH AND CASH EQUIVALENTS, END OF PERIOD$2,212,637 $280,373 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid$76,822 $10,609 
Income taxes paid$1,665 $1,317 
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Transfer from loans receivable to loans held for sale$162,483 $104,553 
Transfer from loans held for sale to loans receivable$— $3,418 
Lease liabilities arising from obtaining ROU assets$2,031 $1,298 

See accompanying Notes to Consolidated Financial Statements (Unaudited)

9

HOPE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



1.Hope Bancorp, Inc.
Hope Bancorp, Inc. (“Hope Bancorp” on a parent-only basis and the “Company” on a consolidated basis), headquartered in Los Angeles, California, is the holding company for Bank of Hope (the “Bank”). As of March 31, 2023, the Bank operated branches in California, New York, New Jersey, Illinois, Washington, Texas, Virginia, Alabama and Georgia, loan production offices in Colorado, Florida, Texas, Oregon, Washington, Georgia, Southern California, Northern California, and a representative office in Seoul, South Korea. The Company is a corporation organized under the laws of the state of Delaware and a bank holding company registered under the Bank Holding Company Act of 1956, as amended.

2.Basis of Presentation
The consolidated financial statements included herein have been prepared without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), except for the Consolidated Statement of Financial Condition as of December 31, 2022, which was from the audited financial statements included in the Company’s 2022 Annual Report on Form 10-K. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations.
The consolidated financial statements include the accounts of Hope Bancorp and its wholly owned subsidiaries, principally Bank of Hope. All intercompany transactions and balances have been eliminated in consolidation. The Company has made all adjustments, that in the opinion of management, are necessary to fairly present the Company’s financial position at March 31, 2023 and December 31, 2022 and the results of operations for the three months ended March 31, 2023 and 2022. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. The results of operations for the interim periods are not necessarily indicative of results to be anticipated for the full year.
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.
These unaudited consolidated financial statements should be read along with the audited consolidated financial statements and accompanying notes included in the Company’s 2022 Annual Report on Form 10-K.
Accounting Pronouncements Adopted
In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures. The standard addresses the following: 1) eliminates the accounting guidance for TDRs, will require an entity to determine whether a modification results in a new loan or a continuation of an existing loan, 2) expands disclosures related to modifications, and 3) will require disclosure of current period gross write-offs of financing receivables within the vintage disclosures table (see footnote 6 “Loans Receivable and Allowance for Credit Losses”). The amendments in this update are effective for fiscal years beginning after December 15, 2022. On January 1, 2023, the Company adopted ASU 2022-02 by applying the amended requirements prospectively from the beginning of the fiscal year of adoption, January 1, 2023, except the recognition and measurement of existing TDRs, for which the Company elected the option to apply a modified retrospective transition method. This resulted in a cumulative effect adjustment to retained earnings of $287 thousand, net of tax. Subsequent to adoption, the new guidance is applied uniformly to the Company’s entire loans held for investment portfolio when estimating expected credit losses, including both TDRs existing as of December 31, 2022, and new modifications to borrowers experiencing financial difficulties. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.

10

ASU 2021-08, issued by the FASB in October 2021, requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The ASU specifies for all acquired revenue contracts, regardless of their timing of payment, (1) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and (2) how to measure those contract assets and contract liabilities. The ASU does not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with Topic 606, such as refund liabilities, or in a business combination, such as customer-related intangible assets and contract-based intangible assets. For example, if acquired revenue contracts are considered to have terms that are unfavorable or favorable relative to market terms, the acquirer should recognize a liability or asset for the off-market contract terms at the acquisition date. The Company adopted ASU 2021-08 on January 1, 2023. The amendments will be applied prospectively to any business combinations subsequent to adoption. The adoption of ASU 2021-08 did not have a material impact on the Company’s consolidated financial statements.
Pending Accounting Pronouncements
In March 2023, the FASB issued ASU 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. This guidance is effective for public business entities for fiscal years including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted in any interim period. ASU 2023-02 is not expected to have a material impact on the Company’s consolidated financial statements.
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3.    Earnings Per Share (“EPS”)
Basic EPS does not reflect the possibility of dilution that could result from the issuance of additional shares of common stock upon exercise or conversion of outstanding equity awards or convertible notes and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options, convertible notes, employee stock purchase program (“ESPP”) shares, or other contracts to issue common stock were exercised or converted to common stock that would then share in earnings. For the three months ended March 31, 2023 and 2022, stock options and restricted share awards of 705,659 and 460,737 shares of common stock, respectively, were excluded in computing diluted earnings per common share because they were anti-dilutive.
The Company previously issued $217.5 million in convertible senior notes maturing on May 15, 2038. The convertible notes can be converted into the Company’s shares of common stock at an initial rate of 45.0760 shares per $1,000 principal amount of the notes (See footnote 10 “Subordinated Debentures and Convertible Notes” for additional information regarding convertible notes issued). With the adoption of ASU 2020-06, the if-converted method is required for calculating dilutive EPS for all convertible instruments since the treasury stock method is no longer available. Under the if-converted method, the denominator of the diluted EPS calculation is adjusted to reflect the full number of common shares issuable upon conversion, while the numerator is adjusted to add back after-tax interest expense for the period. For the three months ended March 31, 2023 and 2022, shares related to the convertible notes issued were not included in the Company’s diluted EPS calculation. In accordance with the terms of the convertible notes and settlement options available to the Company, no shares would have been delivered to investors of the convertible notes based on the Company’s common stock price during the three months ended March 31, 2023 and 2022, as the conversion price exceeded the market price of the Company’s stock.
The following tables show the computation of basic and diluted EPS for the three months ended March 31, 2023 and 2022.
Three Months Ended March 31,
 20232022
 Net Income
(Numerator)		Weighted-Average Shares
(Denominator)		Earnings
Per
Share		Net Income
(Numerator)		Weighted-Average Shares
(Denominator)		Earnings
Per
Share
 (Dollars in thousands, except share and per share data)
Basic EPS - common stock$39,121 119,551,247 $0.33 $60,738 120,131,380 $0.51 
Effect of dilutive securities:
Stock options, restricted stock, and ESPP shares691,048 958,094 
Diluted EPS - common stock$39,121 120,242,295 $0.33 $60,738 121,089,474 $0.50 
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4.    Equity Investments
Equity investments with readily determinable fair values at March 31, 2023 and December 31, 2022, consisted of mutual funds in the amounts of $4.4 million and $4.3 million, respectively, and were included in “Equity investments” on the Consolidated Statements of Financial Condition.
The changes in fair value for equity investments with readily determinable fair values for the three months ended March 31, 2023 and 2022, were recorded in other noninterest income and fees as summarized in the table below:
Three Months Ended March 31,
20232022
(Dollars in thousands)
Net change in fair value recorded during the period on equity investments with readily determinable fair value$69 $(1,247)
Less: Net change in fair value recorded on equity investments sold during the period— — 
Net change in fair value on equity investments with readily determinable fair values held at the end of the period$69 $(1,247)
At March 31, 2023 and December 31, 2022, the Company also had equity investments without readily determinable fair values, which are carried at cost less any determined impairment. The balance of these investments is adjusted for changes in subsequent observable prices. At March 31, 2023, the total balance of equity investments without readily determinable fair values included in “Equity investments” on the Consolidated Statements of Financial Condition was $38.3 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in Community Development Financial Institutions (“CDFI”) investments, and $37.0 million in Community Reinvestment Act (“CRA”) investments. At December 31, 2022, the total balance of equity investments without readily determinable fair values was $38.1 million, consisting of $370 thousand in correspondent bank stock, $1.0 million in CDFI investments, and $36.7 million in CRA investments.
The Company had no impairments or subsequent observable price changes for equity investments without readily determinable fair values for the three months ended March 31, 2023 and 2022.

13

5.    Investment Securities
The following is a summary of investment securities as of the dates indicated:
 March 31, 2023December 31, 2022
 Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses
Fair
Value		Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
 (Dollars in thousands)
Debt securities available for sale:
U.S. Treasury securities$3,992 $— $(81)$3,911 $3,990 $— $(104)$3,886 
U.S. Government agency and U.S. Government sponsored enterprises:
Agency securities4,000 — (127)3,873 4,000 — (133)3,867 
Collateralized mortgage obligations928,676 — (136,448)792,228 947,541 — (153,842)793,699 
Mortgage-backed securities:
Residential533,754 — (83,118)450,636 544,084 — (90,907)453,177 
Commercial401,452 — (46,753)354,699 417,241 — (48,954)368,287 
Asset-backed securities153,538 — (4,979)148,559 153,539 — (5,935)147,604 
Corporate securities23,338