Q4 2022 Peoples Bancorp Inc Earnings Call
Yeah.
Good morning, and welcome to Peoples Bancorp, Inc Conference call.
My name is Betsy and I will be your conference facilitator.
Today's call will cover a discussion of the results of operations for the quarterly and fiscal year ended December 31st 2022.
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After the Speakers' remarks, there will be a question and answer period.
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Please be advised that the commentary in this call will contain projections or other forward looking statements regarding peoples' future financial performance or future events.
These statements are based on management's current expectations.
The statements in this call, which are not historical facts are forward looking statements and involve a number of risks and uncertainties detailed in Peoples' Securities and Exchange Commission filings.
Management believes the forward looking statements made during this call are.
Just on a reasonable assumptions within the bounds of their knowledge of peoples' business and operations.
However, it is possible actual results may differ materially from these forward looking statements.
Peoples disclaim any responsibility to update these forward looking statements. After this call except as may be required by applicable legal requirements.
Peoples' fourth quarter 2022 earnings release was issued this morning and is available at peoples Bancorp Dot com under Investor Relations.
A reconciliation of the non generally accepted accounting principles or GAAP financial measures discussed during this call to the most directly comparable GAAP financial measures is included at the end of the earnings release.
This call will include about 20 to 25 minutes of prepared commentary.
Followed by a question and answer period, which I will facilitate.
An archived webcast of this call will be available on peoples Bancorp Dot com in the Investor Relations section for one year.
Participants in today's call will be Chuck Dolan, Vice President and Chief Executive Officer, and Katie Bailey, Chief Financial Officer, and Treasurer, and each will be available for questions. Following opening statements.
Mr. Sella Rusty you may begin your conference. Thank.
Thank you Betsy and good morning, and we appreciate you joining our call today we.
We are pleased to report that our net income totaled $26 8 million for the fourth quarter or <unk> 95 in diluted earnings per share.
The full year, our net income more than doubled compared to 2021 to $101 3 million or $3 60 in diluted EPS. This is record annual net income for our company.
Our fourth quarter results included several highlights we.
We had record quarterly total revenue compared to prior periods of over $90 million, which was nearly $3 million higher than the linked quarter.
We're able to expand our fourth quarter net interest margin by 27 basis points compared to the linked quarter as we closely managed our deposit costs, while our yields improved.
We had annualized loan growth of 8% compared to the linked quarter.
We lowered our reported efficiency ratio to 56, 7% compared to 57, 2% for the linked quarter, we generated positive operating leverage compared to the linked quarter for the full year of 2022, we grew our total revenues by 37% while growing our.
Rented by their team.
<unk> percent compared to 2021, resulting in positive operating leverage we had record pretax pre provision net revenue as a percent of total average assets, which was 2.06% for the fourth quarter and 177% for the full year of 2022 are we.
Turn on average stockholders' equity grew to 13, 9% compared to 12, 9%, but the linked quarter and was 12, 7% for the full year of 2022 compared to seven 2% for 2021.
Our fourth quarter return on average assets improved six basis points from the linked quarter to 151% and we maintained our fourth quarter total noninterest expense excluding acquisition related expenses within the range. We previously had guided.
Our allowance for credit losses was relatively flat compared to the linked quarter and was down 17% from the period year and from.
From the prior year and provision for credit losses was $2 3 million for the fourth quarter, which negatively impacted diluted EPS by six cents for the full year, we had a release of provisions totaling $3 5 million, which added 10 cents to diluted EPS.
Our allowance for credit losses has grown in recent quarters due to the theory of ration and macroeconomic conditions within the underlying forecast coupled with loan growth. We have also experienced improvements in our reserves for individually annualized loan, which partially offset the increases.
Our allowance for credit losses stood at 1.1% of total loans at quarter end slightly lower than the linked quarter end and a decrease from 1.4% at prior year end moving on to our loan portfolio for the fourth quarter, we grew balances by $96 million.
Or 8% annualized compared to the linked quarter end.
The largest contributor to the growth with our consumer indirect loans, which increased $37 million or 25% annualized.
We had significant.
Significant growth in our leasing balances, which were up $32 million or 41% annualized our COO.
Construction loans increased $31 million or 58% annualized while commercial.
And industrial loans were up $15 million or 7% annualized.
Compared to year end 2021 we had organic loan growth of 5%.
We doubled our organic lease balances, which were up 133 million compared to year end 2021.
Consumer indirect loans increased 19% compared to December 31, 2021 while construction and premium finance loans, each had 17% growth.
5% annual organic growth is on the low end of all 5% to 11% historic annual growth rate. Since 2013, we continue to have high production levels, which exceeded our 2021 project production, we had some headwinds.
During the year with pay offs. Some of these payoffs would desire to improve our concentrations in overall credit quality during the fourth quarter, we were able to return to our historic growth levels.
I'm a credit quality perspective, we had stable metrics compared to the linked quarter end nonperforming assets as a percent of total assets improved to 63 basis points, which is one basis point lower than the linked quarter end and five basis points lower than the prior year and.
Our nonperforming loans were relatively flat compared to the linked quarter and as declines in loans 90, plus days past due and accruing well offset by higher non accruals.
Portion of our loan portfolio considered current stood at 98, 6%, which was a slight decline from 98, 9%, but the linked quarter.
Our quarterly annualized net charge off rate was 18 basis points for the fourth quarter and totaled 16 basis points for 'twenty 'twenty. Two we had some growth in our net charge offs compared to the linked quarter and experienced most of the increase in leases and consumer indirect loans.
Classified loans declined compared to the linked quarter end and were driven by $7 million in upgrades and $3 million in pay offs. Our criticized loans grew compared to the linked quarter end and were primarily driven by the downgrade of three commercial and industrial relationships. We believe all three relationships.
All have positive resolution future months, so we expect downgrades will be temporary.
The increase in criticized loans from these downgrades was partially offset by pay downs of $7 million and upgrades of about $8 million compared to the linked quarter end.
We continue to closely monitor our credit quality and take action to reduce exposure and risk where we can we are confident in the credit quality of our new originations as we focus on maintaining high credit standards as it relates to our announced merger we have made a lot of progress thanks to the alignment and cooperation from the law.
<unk> team, we continue to be impressed with the organization and prospects and looking forward to closing.
We have submitted a proposed applications and documents to our regulators and they are in the process of obtaining shareholder approval at the same time, we have sent teams to limestone locations to ensure a smooth transition and a positive outlook.
For all associates, our extensive experience with merger at ex acquisitions allows us to complete an array of processes quickly accurately and efficiently at this point, we are impressed with the limestone team and the quality of their talent. We are on track to meet our internal and external deadlines associated with the merger.
Would you expect to close during the second quarter of 2023 and we are looking forward to putting our teams together to move our combined institution forward I will now turn the call over to Katy for additional details around our financial performance.
Thank you Chuck our net interest income continued to grow and was up 5% compared to the linked quarter and our net interest margin expanded 27 basis points to 444%.
Our loan and investment yields increased compared to the linked quarter.
<unk> to be positively impacted by the higher market and interest rate environment.
Accretion income net of amortization expense from acquisitions was $2 $2 million and a 14 basis points of margin compared to $2 8 million and 16 basis points, respectively for the linked quarter.
Our funding costs were up 12 basis points and were driven by higher borrowing cost and increased borrowing balances, while we raised our deposit rates marginally.
Our controlled deposit costs, which were 19 basis points for the fourth quarter compared to 16 basis points from the linked quarter have continued to help our margin expand at a high rate in recent quarters.
Compared to the prior year quarter net interest income grew 29% and net interest margin expanded 107 basis points.
We continue to see improvement from our core growth and the increases in market interest rates.
Quarterly loan yields improved by 116 basis point, while our investment security field with 70 basis points higher than the prior year quarter.
Funding cost doubled and were tied to higher borrowing costs imbalances and the increase in our deposit rate.
For the full year, our net interest income grew 47%, while our net interest margin expanded 56 basis points compared to 2021.
The majority of the increase was driven by the Premier merger and vantage acquisition, coupled with organic growth and higher market interest rates during 2022.
We are currently in an asset sensitive position as it relates to our balance sheet and we expect a slight reduction in asset sensitivity once we complete the limestone merger.
As it relates to our efficiency ratio. We are pleased that our efforts for reduction has paid off.
Our efficiency ratio was 56, 7% on a reported basis for the fourth quarter compared to 57, 2% for the linked quarter and 62, 7% for the prior year quarter.
When adjusted for Noncore expenses, our efficiency ratio was 55, 9% a decline compared to 56, 6% for the linked quarter and 61, 5% for the prior year quarter.
On a year to date basis, we improved our fish our reported efficiency ratio to 59, 6% from 73, 6% for 2021.
Yeah adjusted efficiency ratio was 58, 6% compared to 63, 5% for 2020 one.
We had positive operating leverage compared to the linked quarter prior year quarter and full year of 2021.
The value we find in this measure is identifying if we are growing our revenues faster than our expenses and we did well.
On a reported basis and when adjusted for noncore expenses compared to the prior period.
Compared to the linked quarter, our fee based income declined 4%.
Well insurance income grew the overall decrease was driven by lower commercial loan swap fee income, which is included in other noninterest income along with lower lease and electronic banking income.
Compared to the prior year quarter, our fee based income was down 1%.
Lease income grew considerably totaling $1 3 million compared to $600000 for the prior year quarter.
Our insurance income grew 12% compared to the fourth quarter of 2021 and was positively impacted by our insurance acquisition earlier this year.
We also experienced growth in bank owned life insurance income as we personally purchased additional policies during 2022.
And we had higher deposit account service charges.
Our increases were more than offset by declines in mortgage banking and commercial loan swap fee income, which were a result of the high interest rate environment, reducing customer demand.
For the full year fee based income was up 14% compared to the prior year. Our biggest area of growth was deposit account service charges, which was driven by the additional customers from the premier merger.
Net income grew $3 million compared to 2021, driven by the lease acquisitions.
Our electronic banking income increased largely due to higher customer activity and additional accounts from the premier merger in late 'twenty or 'twenty one.
Insurance income increased during 2022 compared to 2021 and mortgage banking income declined due to fewer refinancing and home purchases made by customers related to higher market interest rates in recent period.
Based on life insurance and kind of increase because of the policies purchased stirring 2022.
Moving on to expenses.
Compared to the linked quarter total noninterest expense increased 2%.
This was driven by higher data processing and software expense well other noninterest expense and professional fees grew due to recent acquisition related expenses recorded which totaled over $700000 for the quarter.
At the same time, we had higher other loan expenses.
We were able to offset some of these increases with declines in our electronic banking franchise tax and marketing expenses.
Compared to the prior year quarter, our total noninterest expense grew 11%.
Largest growth was in salaries and employee benefit cost, which was driven by the increases in pay per associate related to merit increases during 2022 coupled with the recent salary increase we completed at the beginning of October for associates, making $60000 or less a year.
We had increased expenses due to the addition of associates from the vantage and elite acquisitions completed this year.
Also contributing to the increase was higher sales and incentive compensation tied to improved performance in production along with higher medical insurance cost.
We recorded higher data processing and software expenses as well as increased amortization of intangible assets associated with our recent acquisitions.
We had the additional operating expenses from the vantage acquisition, which was completed in early 2022.
The growth in these expenses was partially offset by lower electronic banking and franchise tax expense.
For the full year of 2022 compared to 2021, our total noninterest income expense grew 13%.
We have been acquisitive in recent periods, which has led to a growth and costs associated with our larger size and footprint over the last year.
This has resulted in higher costs reflected through most categories excluding acquisition related expenses.
Moving on to the balance sheet, we grew or held to maturity investment portfolio by over $150 million from the linked quarter and.
We have been purchasing bonds that are high yielding with relatively low credit risk as they are issued by government sponsored enterprises.
The additional investment in held to maturity investment Securities has allowed us to reduce some of our exposure to the swings in accumulated other comprehensive losses that we have been experiencing in our available for sale investment securities.
At yearend, our investment securities comprised 24.1% of our total assets.
Third to 23, 1% for the linked quarter end and 23, 8% for the prior year end.
We anticipate that our investment securities as a percent of total assets could decline in future periods as we continue to manage our liquidity position.
As Chuck mentioned earlier, we had loan growth of over 996 million and eight or 8% annualized since September 30th 2022.
Compared to the linked quarter and our total deposits declined 3%.
This was driven by outflows of governmental deposits, which have a seasonal decrease during the fourth quarter of each year.
We also had some shrinkage in our noninterest bearing and retail Cds.
However, our demand deposits as a percent of total deposits were still at 48% at year end.
Consistent with the linked quarter end and prior year end.
We had some growth in our brokered CD balances, which is which was a function of our funding process. As these were at a lower price than certain S. H L. B advances.
At year end the reduction in our deposits put us in an overnight borrowed position.
From a capital perspective, we grew our regulatory capital ratios compared to the linked quarter end.
At yearend, our common equity tier one capital ratio was 12%.
Total risk based capital ratio was 13, 2% in the tier one leverage ratio was eight 9%.
Each ratio improved by 22 to 28 basis points compared to September 30th 2022.
We have substantially recovered from the decreases in our capital ratios caused by the vantage acquisition earlier in 2022.
Our tangible equity to tangible asset ratio improved to six 7% from six 5% at the linked quarter and as earnings net of dividends increased our capital coupled with a slight recovery in our accumulated other comprehensive loss.
We grew our book value and tangible book value per share by 13% and 25%, respectively on an annualized basis compared to the linked quarter.
I will now turn the call back to Chuck for additional comments. Thank.
Thank you Katie we have improved our performance considerably during 2022, along with reaping the benefits of the market interest rate increases and prior acquisitions we.
We were recognized by Newsweek as the 2023 that's small bank in the state of Ohio. We were also recognized by American banker as the best Bank to work for in 2022. This is the second year in a row. We have received this honor and we are one of only 90 banks to receive the award in 'twenty two.
Two.
We have positioned ourselves to continue to provide a profitable return for shareholders. During 2023, while also expanding our business into larger markets in Kentucky, and the pending with the pending limestone merger we.
We have been able to capitalize on our recent mergers and acquisitions substantially reducing our efficiency ratio building on our positive operating leverage by growing revenues, while offering state of the art technology to our new clients as we look to our future. We are refreshing our guidance for 'twenty 'twenty.
Three which includes the impact of the pending limestone merger, but excludes the acquisition related expenses.
During 2023, we expect our net interest income to continue to grow.
Two the limestone merger as well as full year benefit of higher market interest rates as our loans re priced to the newest rate. We expect net interest margin expansion to slow as we will need to increase our funding costs in future periods with that being said, we believe net interest margin for 'twenty.
Twenty-three will be between 4.5% and 4.65%, which assumes relatively flat rates for 2023 as compared to year end 2022.
We anticipate loan growth of between 25, and 30%, including the new limestone balances, while we believe our annual organic growth without the acquired loans will be between five and 7%. We expect fee based income percentage growth to be in low double digits compared to 2022.
<unk>, which includes the impact of the pending limestone merger.
We anticipate a 20% increase in our total noninterest expense for 2023, excluding acquisition related expenses compared to the full year of 2022.
We expect our efficiency ratio to be between 55, and 57% for the full year, including a limestone. We believe we will have we believe we will see an increase of about five basis points and our net charge off rate during 2023 compared to 2022.
Yeah.
We continue to believe we will.
We will meaningfully exceed all current analyst EPS estimates for 'twenty, 'twenty, three, especially considering our refreshed guidance and the anticipated benefits of the limestone merger I will note for all four quarters of 2022 we have well exceeded analyst consensus.
Quarterly EPS estimates as we move into the new year I wanted to note as we customarily do that our first quarter expenses are generally higher due to a few expenses that we typically expect to recognize during the first quarter, which include employer contributions to health savings account.
Stock based compensation expense for certain employees higher payroll taxes and annual merit increases we intend to keep our momentum moving into 2023 with a focus on strategically growing our core business. While also working to seamlessly integrate the limestone merger.
We are making positive progress toward our goals and we'll keep those in the forefront of everything we do in 2023.
Concludes our commentary and we will open the call for questions. Once again. This is Chuck seller of ski and joining me for the Q&A session. It's Katie Bailey, our Chief Financial Officer, I will now turn the call back into the hands of I'll call facilitator.
We will now begin the question and answer session.
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At this time, we will pause momentarily to assemble our roster.
Yeah.
The first question today comes from Brendan novel Piper Sandler. Please go ahead.
Hey, good morning folks how are you.
Great Good morning.
Maybe just to start off on the margin you. Obviously fantastic performance. This year has caused the cost of a barely budged I was hoping for the outlook for next year. He can kind of walk through the quarterly progression that gets you into that 450 to $4 65 for the year I would imagine at some point funding costs have to have to accelerate more meaningfully just to reflect where we.
Rates are today, it's just kind of curious how that that moves throughout the year.
I'd, just say a couple of different things and then I'll, let Katie give her thoughts on it.
Well first off the value of this franchise is the deposit book.
And the low rate environment over the last decade, really hasnt give an opportunity for that to shine.
So rates have gone up 4% and our deposit costs have gone up five basis points.
Yes.
Tell me how much more rates are going to go up but my guess would be another half of a point to 25 basis points increases and deposit cost.
You know May go up 10 to 20 basis points more during the course of twenty-three, but not a whole not a whole lot more.
Yeah. The other things I would note our as it relates to the year over year benefit just from the right the rates as they rose throughout 'twenty, two we'll get the annual benefit of that in quarterly see that come through in 'twenty three.
Also the asset mix changes with our leasing portfolio, which you're well aware has a meaningfully higher yield than our other core bank portfolio. So as we continue to see strong growth in our.
Our specialty businesses, we will see some benefit through margin as well.
Got it okay.
And then one more for me I appreciate the guide on expenses, including limestone maybe.
Flows for those folks who are not yet in modeling the deal could you offer a kind of a standard.
Standalone P. BOE cost guide I think last quarter, he said $56 million to $58 million per quarter or 23, Yeah. I think that's still the core P. Boe expectation for 'twenty three on a quarterly basis with the 56 to 58.
Fantastic. Thank you so much.
Hugh.
The next question comes from Garlinger Oh. Please go ahead.
Hey, guys I just had one quick question I wanted to follow up on that margin.
You said four and a half to 465, but Chuck you also included some things that were inclusive of limestone was that was that margin inclusive of limestone or not.
Yes.
And then I appreciate you kind of go into the color of.
Our Fad plus 25, and then assuming another plus 25.
I'm, just kind of thinking the 15 basis point of spread is pretty big.
The deposit cost the biggest.
I don't know variable I guess, you could say between the high end and the low end or is it just more of a mix on the asset side.
And then what we're paying for alternative funding to.
You know comes into the comes into the equation.
I'd tell you I would lean towards the high side of the range, but Katie will kick me.
Yeah, I mean, I think it's as you pointed out is largely contingent about where we see the loan growth and also to on the deposit costs, what kind of moves we have to do there.
As rates rise as well as alternative funding.
Got you I appreciate it. Thank you. Thank you.
The next question comes from Michael Perito with Kb W. Please go ahead.
Hey, Chuck and Katy Thanks for taking the questions.
Yeah.
I had a couple I wanted to start could you kind of mentioned it depends on the loan growth. So just on on the loan growth side here I mean.
You know what are some of maybe the the areas that could put you at the higher or lower end of the 5% to 7% range in and then maybe as a follow up Chuck just on the the leasing and some of the.
Premium finance some of the stuff you guys are doing there I mean.
Wow, how if at all and maybe the answer is it hasn't but how if at all has kind of some of the uncertainty of 2023, and and and the funding changing environment and everything impacted your kind of near term outlook for those businesses. Just just curious if theres been any kind of.
Change relative to the last time, we spoke.
No I think the specialty finance businesses all optimistic.
On 2023, I would say that some of those leasing businesses will do better there almost anti cyclical.
In harder times as people leave things as opposed to.
As opposed to purchase.
We have been you know as the.
The script indicated since 2013, we've grown organically a 5% to 11% every year you know last year was tough for us with only 5%.
We have in the guidance the organic pieces being five to seven I think some of the things that.
We will determine whether it's at the high end or higher you know have to do with.
You know what happens in the real estate markets with the higher rates do people take things to the permanent market. A you know a little bit faster I think that good.
Packed us.
But our pipelines are robust.
We had a great year of originations in 'twenty two if we can do as well with the originations in 'twenty three we'll have simply more growth because we arent going to see some of the moves we've made to improve the portfolio by encouraging some.
Credits too.
Go elsewhere.
Helpful. And then just kind of Big picture you know we're hearing on.
On other calls for that you know that the bank M&A is has slowed obviously you guys had had had a bit of activity recently just can you maybe give us an update near term on kind of you know the capital priorities for the banking and in 'twenty, three and and you know is there a period here, where you know there's some digestion in some some.
Growth of platform's acquired that that you guys would like to see occur or is there still enough dislocation, where there are opportunities that that externally that that would be an enticing for you guys to consider.
Well certainly we've been active with M&A and we.
We see M&A as an important part of the business, we do not have plans to do a deal in 2023.
But having said that we talked to banks all the time.
And.
It's analogous to a.
Two a portfolio manager running a portfolio you always have to make your your.
Tax in terms of capital priorities.
You know, we have that really robust dividend and well retain a we will retain that were blocked out from share buybacks.
Cost of the acquisition, although certainly at this price we think the you know the stocks of steel and we just would like to.
To build on our capital levels.
Yes.
Great and then just lastly for me I know you guys gave kind of the broader the guidance and the outlook for 'twenty three but you guys have quite a few contributors in that part and I'm curious Chuck if I had to put you on the spot I mean, any particular area, where where do you think maybe there could be some upside or some optimism about dislocation or growth opportunities for next year on the noninterest income.
<unk> businesses.
Well you know obviously the stock market has put a dent in our investment businesses last year, you know we were pretty much neutral from a revenue standpoint.
If the market turns around those earnings will increase last year was one of the few years.
Over my career, where you had the double whammy of stocks being down in bonds being off Oh, that's pretty unusual I don't expect that to happen again, this year and I think our investment business has potential upside.
Cool. Thank you guys I appreciate you, taking my questions and and hope you're well.
You.
Your next question comes from Terry and I can't believe that Steven. Please go ahead.
Thanks, Good morning, Chuck Good morning, Katie good morning.
Terry.
Maybe the first question have you scheduled a conversion date for limestone and what I'm getting at is trying to understand kind of the cost savings and what you foresee happening in 2023, and if theres any kind of follow through into 2024.
Yes, we have a date in August .
I think it's August .
Four scheduled for conversion.
I will tell you that we will get.
The vast majority of the expense saves.
In 'twenty three.
We will get some year over year benefit in 'twenty four.
But the.
It's been our history to get the expense saves pretty quickly.
Uh huh.
And then as a follow up in the in the press release I think it was favorable funding source was the brokerage Cds and you've done a really good job holding cause of noninterest bearing deposits relative to what I've seen across the industry. What's your thoughts on kind of the mix shift of deposits and we continue to rely on an on brokerage Cds in your view in 'twenty three.
It's part of the mix.
A dependency by any stretch the imagination I just reiterate some of the points that were made.
You know a lot of the deposit activity. The decrease was seasonality, we're going to get a great deal of those deposits back in the first quarter, we have a phenomenal deposit book, it's the advantage of being in the communities.
That was you know that we serve that frankly most of the you know many of the competitors have vacated them. So I'm.
It's not by accident.
And I would just say, we evaluate broker in conjunction with our F. H L b opportunities for funding and [laughter] whoever prices Masters, who gets their business. So okay understood.
Understood and then maybe one last question can you remind me have you made any changes to your overdraft fees or consumer fees and if not are you contemplating anything there.
Oh, we have made a few changes of a few adjustments over the last few years nothing.
A substantial I think we have a change going in that's going to that we budgeted that's going to hurt us about $400000. We continue to examine it but don't see anything radical at this point in time.
Okay. Thanks for taking my questions. Thank you. Thank you.
The next question comes from Manuel.
With D. A Davidson. Please go ahead.
Hey, good morning.
Yeah.
Where should we think the kind of loan to deposit ratio creeps up to them.
We're kind of you're thinking you're going to target overtime.
Yeah.
Well, that's an interesting question.
You know I think it'll continue to go up.
A couple of percent a quarter.
Keep in mind that we have the limestone limestone acquisition.
No.
Coming.
Coming in.
I don't think we will hit the you know I don't think we will hit the nineties.
This year.
I think that you know.
I would like the loan to deposit ratio.
Generally to be in the low low to mid nineties.
But.
Again, I think it will improve but I don't think we'll hit 90.
Okay.
The the.
The lease book has phenomenal yields.
It's about 10% this quarter that should just continue to kind of creep up right is that the right way to think about it yes. They chicken it'll go up from there in future quarters and again, what you've seen over time is some reductions in why we were bucking the Northstar acquisition that we did in 2020.
One had higher yield that's that micro ticket Buck Dan what's the deal we did in 'twenty. Two you have which is more of a small mid ticket Buck and so you've seen some reduction based on that shift or the combination of those two portfolios together, but I think the opportunity for 'twenty three is expansion in that.
No.
Okay. That's helpful.
I'm I'm good for now thank you. Thank you guys. Thank you.
As a reminder, if you would like to ask a question. Please press Star then one to enter the question queue.
The next question is a follow up from Brendan Nosal with Piper Sandler. Please go ahead.
Thanks, one more follow up for me on the margin could you maybe offer some color on how much are in P. A's are underneath that 450 to 465 margin for 'twenty three and then how much of those total P. A a's are coming from limestone.
Oh, you're saw as purchase accounting you're asking about.
Yeah, how much of that margin as purchase accounting and your and your thinking yeah. So we expect that to continue to be in the range of 10 to 15 basis points.
Hum.
As we move into 2023 on a quarterly basis.
Okay.
Kind of thinking with limestone could you just given the the marks from the rate environment. It would be a bigger pick up there.
Not the case given the pullback in rates, how should I think about that well I think you have some run off of the portfolios that we've already or the acquisitions that we've already done so you'll see some reduction or that kind of seasoned acquisitions and then you'll see an offsetting increase for the limestone acquisition.
By nature, it's going to diminish over time and so.
It stays relatively steady.
Got it Okay. That's super helpful. Thank you. Thank you.
At this time there are no further questions. Sir do you have any closing remarks, 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 peoples Bancorp Dot com under the Investor Relations section. Thank you Paul.
Your time and have a great day.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.