Operator: The next question comes from Manuel Navas with D. A. Davidson. Please go ahead.
Manuel Navas : Hey, good morning.
Katie Bailey : Good morning.
Katie Bailey : Where should we think the kind of loan-to-deposit ratio creeps up to and where kind of you thinking you’re going to target it over time?
Chuck Sulerzyski : Well, that’s an interesting question. I think it will continue to go up a couple percents a quarter. Keep in mind that we have the Limestone acquisition coming in. I don’t think we will hit the €“ I don’t think we will hit the 90s this year. I think that, I would like the loan-to-deposit ratio generally to be in the low to mid-90s. But again, I think it will improve, but I don’t think we’ll hit 90.
Manuel Navas : Okay. The lease book has phenomenal yields. It’s about 10% this quarter. That should continue to kind of creep up, right? Is that the right way to think about it?
Katie Bailey : Yes, it will go up from there in future quarters. Again, what you’ve seen over time is some reductions in what we were booking. The North Star acquisition that we did in 2021 had higher yields. That’s micro-ticket book. Then the deal we did in 2022 has, which is more of a small mid-ticket book and so you’ve seen some reduction based on that shifts or the combination of those two portfolios together, but I think the opportunity for 2023 is the expansion in that yield.
Manuel Navas : Okay. It’s helpful. I am good for now. Thank you guys.
Katie Bailey : Thank you.
Chuck Sulerzyski : Thank you.
Operator: The next question is a follow-up from Brendan Nosal with Piper Sandler. Please go ahead.
Brendan Nosal: Thanks. One more follow-up for me on the margin. Could you maybe offer some color on how much NPAs are underneath that 4.50 to 4.65 margin for 2023? And then how much of those total PAAs are coming from Limestone?
Katie Bailey : Purchase accounting, you’re asking about?
Brendan Nosal: Yes, how much of the margin is purchase accounting in your thinking>
Katie Bailey : Yes. So we expect that to continue to be in the range of 10 to 15 basis points as we move into 2023 on a quarterly basis.
Brendan Nosal : Okay. I was kind of thinking with Limestone, just given the marks from the rate environment, there would be a bigger pickup there. Is that not the case given the pullback in rates? How should I think about that?
Katie Bailey : Well, I think you have some runoff of the portfolios that we’ve already €“ or the acquisitions we’ve already done. So you’ll see some reduction for the kind of seasoned acquisitions and then you’ll see an offsetting increase for the Limestone acquisition. But by nature it’s going to diminish over time and so it stays relatively steady.
Brendan Nosal : Got it. Okay. That’s super helpful. Thank you.
Katie Bailey : Thank you.
Operator: At this time, there are no further questions. Sir, do you have any closing remarks?
Chuck Sulerzyski : Yes, I want to thank everyone for joining our call this morning. Please remember that our earnings release and a webcast of this call will be archived at peoplesbancorp.com under the Investor Relations section. Thank you for your time and have a great day.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
