Current Press Releases

QNB Corp. Reports Record Earnings for First Quarter 2018

Quakertown, PA (April 24, 2018) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank, reported net income for the first quarter of 2018 of $2,935,000, or $0.85 per share on a diluted basis, compared to net income of $2,860,000, or $0.83 per share on a diluted basis, for the same period in 2017. 

Total assets as of March 31, 2018 were $1,172,168,000 compared with $1,152,337,000 at December 31, 2017. Loans receivable at March 31, 2018 were $750,187,000 compared with $733,283,000 at December 31, 2017, an increase of $16,904,000, or 2.3%.  Total deposits at March 31, 2018 were $1,006,369,000, increasing $12,421,000, or 1.2%, compared with $993,948,000 at December 31, 2017.

“The first quarter of 2018 marked record-setting earnings and several milestones for the Bank,” said David W. Freeman, President and Chief Executive Officer. “Net income and earnings per share grew 2.6% and 2.4%, respectively compared to the first quarter of 2017. The loan, deposit, and household growth we saw in 2017 was sustained during first quarter 2018 and asset quality remains strong.  Construction was completed on our relocated and expanded Warminster Office in 56 days  ̶  our 11th full-service branch opened for business on April 16.  Also, our securities and advisory service, QNB Financial Services, saw assets under management exceed $130 million”.

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended March 31, 2018 totaled $8,791,000, an increase of $911,000, or 11.6%, from the same period in 2017. The net interest margin was 3.22% for both the first quarter of 2018 and 2017.  The yield on earning assets was 3.83% for the first quarter 2018, an increase of twelve basis points from 3.71% in the first quarter of 2017.  The cost of interest-bearing liabilities was 0.75% for the first quarter ended March 31, 2018, compared with 0.60% for the same period in 2017.

Asset Quality, Provision for Loan Loss and Allowance for Loan Loss

QNB recorded a $188,000 provision for loan losses in the first quarter of 2018 compared with $300,000 in the first quarter 2017.  QNB's allowance for loan losses of $8,037,000 represents 1.07% of loans receivable at March 31, 2018 compared to $7,841,000, or 1.07% of loans receivable at December 31, 2017, and $7,719,000, or 1.17% of loans receivable at March 31, 2017. Net loan recoveries were $8,000 for the first quarter of 2018, compared with net recoveries of $25,000 for the first quarter of 2017.

Total non-performing loans, which represent loans on non-accrual status, loans past due 90 days or more and still accruing interest and restructured loans were $8,327,000, or 1.11% of loans receivable at March 31, 2018, compared with $9,242,000, or 1.26% of loans receivable at December 31, 2017, and $11,023,000, or 1.67% of loans receivable at March 31, 2017. In cases where there is a collateral shortfall on impaired loans, specific impairment reserves have been established based on updated collateral values even if the borrower continues to pay in accordance with the terms of the agreement.  At March 31, 2018, $4,964,000, or approximately 70% of the loans classified as non-accrual are current or past due less than 30 days.  Commercial loans classified as substandard or doubtful, which includes non-performing loans, totaled $17,416,000 at March 31, 2018.  This was an increase of $769,000, or 4.6%, from the $16,647,000 reported at December 31, 2017 and a decrease of $851,000, or 4.7%, from the $18,267,000 reported at March 31, 2017.

Non-Interest Income

Total non-interest income was $1,067,000 for the first quarter of 2018, a decrease of $923,000, or 46.4%, compared with the same period in 2017.  Decreases in non-interest income comprise; net gains on investment securities, net gain from trading activity and net gain on sale of loans, which decreased $910,000, $17,000, and $43,000, respectively, in first quarter 2018 compared with the same period in 2017.  The net gain on investment securities was $85,000 in the first quarter of 2018 compared with $765,000 for the same period in 2018.  The adoption of Accounting Standard Update 2016-01 effective January 1, 2018 requires the Company to record unrealized gains or losses on available for sale securities classified as equity securities through earnings, rather than in other comprehensive income (loss), a component of shareholders’ equity.  At March 31, 2018, these unrealized losses totaled $246,000.  Fees for services to customers and ATM and debit card income increased $29,000, or 7.4% and $13,000, or 3.1%, respectively, to $421,000 and $430,000, respectively.  The increase in fees for services to customers is due primarily to an increase in overdraft income, while the increase in ATM and debit card income is due to increased credit card activity for the first quarter of 2018 compared. to the same period in 2017.

Non-Interest Expense

Total non-interest expense was $6,178,000 for the first quarter of 2018, increasing $590,000, or 10.6% from $5,588,000 for the same period in 2017.  Salaries and benefits expense increased $259,000, or 8.4%, to $3,345,000 when comparing the two quarters.  Salary expense and related payroll taxes increased $149,000, or 5.5%, to $2,851,000 during the first quarter 2018 compared to the same period in 2017.  Medical premiums, retirement plan expense and post-retirement life insurance benefit expense increased $63,000, $21,000, and $24,000, respectively during the same period.   Net occupancy and furniture and equipment expense increased $78,000, or 8.9%, to $958,000 for the first quarter 2018, due to increased equipment, building and software maintenance totaling $70,000 and utilities expense, increasing $7,000, comparing the first quarter of 2018 with the same period in 2017.  Other non-interest expense increased $253,000, or 15.6%, when comparing first quarter 2018 with first quarter 2017, due to increased expenses for marketing of $81,000, third-party services of $28,000, employee training of $26,000, FDIC insurance of $34,000, and ATM/check cards of $75,000.

Provision for income taxes decreased $565,000, or 50.4%, to $557,000 in the first quarter 2018 due to decreased pre-tax income and a reduced corporate tax rate from 34% to 21%, resulting from the Tax Cuts and Jobs Act, effective January 1, 2018.  The effective tax rates for the first quarters of 2018 and 2017 were 16.0% and 28.2%, respectively.

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking services in the communities it serves. In addition, the Company provides securities and advisory services under the name of QNB Financial Services through Investment Professionals, Inc., a registered Broker/Dealer and Registered Investment Advisor, and title insurance as a member of Laurel Abstract Company LLC. More information about QNB Corp. and QNB Bank is available at www.qnbbank.com.

Forward Looking Statement

This press release may contain forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that increased demand or prices for the Company’s financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission, including "Item lA. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

QNB Bank Seeking Art for 2019 Collector Calendar

Quakertown, PA (March 27, 2018) QNB Bank is seeking artwork for its 2019 Student Art Calendar Contest from High School students (grades 9-12) from all schools in the QNB Bank market area. This will be the 23rd installment of the QNB Student Art Collector Calendar.

The theme for this year is “Sports” and the art format is pen and ink drawings. Fourteen drawings will be selected by the Bank to be featured in the Calendar. Entry forms with a full list of rules and regulations for the Contest can be picked up at any of QNB Bank’s Branch Offices or participating schools’ art departments.

All artwork must be received by Thursday, May 31st and may be dropped off at the QNB Towne Bank Center, located at 320 W. Broad Street, Quakertown, or any of QNB Bank’s Branch Offices. Artwork may also be mailed to:

            QNB Bank
            Attn: Marketing Department
            PO Box 9005
            Quakertown, PA 18951-9005

Winners of the contest will be chosen and notified in June. Questions may be directed to the QNB Bank Marketing Department at 215-538-5600 ext. 5756.

Mary Beth Liddle Joins QNB Bank as Senior Vice President, Chief Accounting Officer/Controller

Quakertown, PA (March 12, 2018) Mary Beth Liddle was recently named Senior Vice President, Chief Accounting Officer/Controller at QNB Bank. She is responsible for managing the Bank’s accounting, regulatory reporting and tax functions while maintaining a system of internal controls.

Mary Beth has been in banking for 32 years. In her previous employment, she served as Senior Vice President & Controller for Univest Corporation of PA. Mary Beth earned her Bachelor of Science Degree at Delaware Valley University where she graduated magna cum laude.

Mary Beth lives in Pipersville, PA with her family. She has served as past President and Board Member of the Philadelphia Chapter of the Financial Managers Society (FMS) as well as Treasurer of the FMS East Coast Regional.

QNB Corp. Increases Dividend

Quakertown, PA (February 20, 2018) The Board of Directors of QNB Corp. (OTC Bulletin Board: QNBC), parent company of QNB Bank, at a regular meeting on February 20, 2018 declared a quarterly cash dividend of $0.32 per share. The amount represents a 3.2% increase from the prior quarter. Based upon the closing price of a share as of close of business February 16, 2018, this represents a yield of 2.9%. The cash dividend is payable on March 30, 2018 to shareholders of record March 16, 2018.

“As a result of the continued solid financial performance of QNB Corp., the Board of Directors is pleased to be able to increase the dividend by 3.2%. As a result of its well capitalized position, QNB Corp. is able to continue its uninterrupted history of quarterly dividends,” said David W. Freeman, President and Chief Executive Officer.

QNB Corp. offers commercial and retail banking services through the eleven banking offices of its subsidiary, QNB Bank. In addition, QNB Bank provides securities and advisory services under the name of QNB Financial Services through Investment Professionals, Inc., a registered Broker/Dealer and Registered Investment Advisor, and title insurance as a member of Laurel Abstract Company LLC. QNB Corp.’s stock is traded in the over-the-counter market under the symbol “QNBC.” For more information, visit QNB’s web site at QNBbank.com.

QNB Bank Promotes Karen Krier to Vice President, Branch Manager at Perkasie Office

Quakertown, PA (February 14, 2018) QNB is pleased to announce the promotion of Karen Krier to the position of Vice President, Branch Manager II at the Bank’s Perkasie Office. In her role, Karen is responsible for the effective management of the full-service branch, as well as coaching branch staff, developing new business, and retaining and expanding existing relationships. Her previous position was Assistant Vice President, Branch Manager II at QNB’s Perkasie Office.

Karen has been with QNB for 30 years. She is a graduate of Quakertown Community High School and lives in the Quakertown area with her family. As an active member of the community, she remains involved in a variety of local events including the Perkasie Fall Festival, the Perkasie Tree Lighting and Bucks County Big Brothers Big Sisters’ Bowl for Kids’ Sake.

QNB Corp. Reports Earnings

Quakertown, PA (January 30, 2018) QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank (the “Bank”), reported net income for the fourth quarter of 2017 of $489,000, or $0.14 per share on a diluted basis, compared with $2,269,000, or $0.66 per share on a diluted basis during the same period in 2016.  For the year ended December 31, 2017, QNB reported net income of $8,289,000, or $2.41 per share on a diluted basis. This compares to net income of $8,924,000, or $2.63 per share on a diluted basis, reported for 2016.  For the year 2017 the rate of return on average assets and average shareholders’ equity was 0.74% and 8.17%, respectively, compared with 0.87% and 9.45%, respectively, for the year 2016.

QNB's fourth quarter and full year 2017 reported net income and earnings per share were reduced by $2,054,000 due to the new federal tax legislation, Tax Cuts and Jobs Act (“the Tax Act”), as summarized in the table below.  The additional tax provision related to tax legislation on fourth quarter and year-end 2017 net income was primarily attributable to revaluation of deferred tax assets at the lower statutory tax rate from 35% to 21%.

Summary Impact of 2017 Tax Legislation

 

 

 

 

 

 

 

 

Quarter ended 12/31/2017

 

 

Year ended 12/31/2017

 

Non-GAAP adjusted net income excluding impact of tax legislation

$

2,543

 

 

$

10,343

 

Tax provision, revaluation of net deferred tax asset

 

(2,054)

 

 

 

(2,054)

 

 (GAAP) Net Income

$

489

 

 

$

8,289

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted EPS excluding impact of tax legislation

$

0.73

 

 

$

3.00

 

Effect of tax legislation on EPS

$

(0.59)

 

 

$

(0.59)

 

(GAAP) EPS

$

0.14

 

 

$

2.41

 

David W. Freeman, President and Chief Executive Officer stated, “While our fourth quarter and year-end earnings were negatively impacted by the required accounting treatment of the new Federal tax legislation, our core metrics of loan, deposit and household growth remained strong throughout 2017. Solid asset quality and an increasing net interest margin continue to have a positive impact on the Company’s profitability”.

Total assets as of December 31, 2017 were $1,152,337,000 compared with $1,063,141,000 at December 31, 2016. Loans receivable at December 31, 2017 were $733,283,000, compared with $633,079,000 at December 31, 2016, an increase of $100,204,000, or 15.8%, with commercial lending as the largest contributor to the growth.  Total deposits at December 31, 2017 were $993,948,000, an increase of 8.8% compared with $913,355,000 at December 31, 2016, due to strong growth in demand and savings deposit balances.

Net Interest Income and Net Interest Margin

Net interest income for the quarter and twelve months ended December 31, 2017 totaled $8,369,000 and $32,422,000, respectively, an increase of $1,090,000 and $3,918,000, respectively, from the same periods in 2016. The net interest margin for the fourth quarter of 2017 was 3.11% compared to 2.97% for the fourth quarter of 2016.  Net interest margin for the twelve months ended December 31, 2017 was 3.14%, an increase of 11 basis points compared to the same period in 2016.  The yield on earning assets increased 22 basis points from 3.44% for the fourth quarter of 2016 to 3.66% for the fourth quarter of 2017. For the twelve months ended December 31, 2017, the yield on earning assets increased 17 basis points, from 3.50% in 2016 to 3.67%.    The cost of interest-bearing liabilities was 0.68% for the fourth quarter and 0.64% for the year ended December 31, 2017, compared with 0.57% for the both periods in 2016.

Asset Quality, Provision for Loan Loss and Allowance for Loan Loss

QNB recorded a $700,000 provision for loan losses in the fourth quarter of 2017.  QNB recorded a net reversal of $95,000 in provision for the fourth quarter 2016, related primarily to the sale of the Bank’s interest in third-party originated finance contracts in October 2016.   For the twelve months ended December 31, 2017 and 2016, QNB recorded $1,400,000 and $30,000, respectively, in provision for loan losses.  QNB's allowance for loan losses of $7,841,000 represents 1.07% of loans receivable at December 31, 2017 compared to $7,394,000, or 1.17% of loans receivable at December 31, 2016.  Net loan charge-offs of $953,000 for 2017, or 0.14% of total average loans, were primarily related to a single credit.  This compares with net charge-offs of $190,000, or 0.03% annualized of total average loans for the same period in 2016.  The majority of charge-offs recorded during both 2017 and 2016 had specific reserves established during the allowance for loan loss calculation process prior to the decision to charge-off the loan.

 Non-performing assets totaled $9,242,000 at December 31, 2017 compared with $14,219,000 at December 31, 2016. Included in this classification are non-performing loans and non-performing pooled trust preferred securities. In June 2017, the Bank sold five non-performing pooled trust preferred securities, with a $2,234,000 carrying value.  The remaining pooled trust preferred security, which had a carrying balance of $215,000 at December 31, 2017, was returned to accruing status in June 2017.

Total non-performing loans, which represent loans on non-accrual status, loans past due 90 days or more and still accruing interest and restructured loans were $9,242,000, or 1.26% of loans receivable at December 31, 2017, compared with $11,938,000, or 1.89% of loans receivable at December 31, 2016.  In cases where there is a collateral shortfall on impaired loans, specific impairment reserves have been established based on updated collateral values even if the borrower continues to pay in accordance with the terms of the agreement. At December 31, 2017, $5,977,000, or approximately 75% of the loans classified as non-accrual are current or past due less than 30 days.   At December 31, 2017 substandard or doubtful loans totaled $16,647,000, a reduction of $5,557,000, or 25.0%, from the $22,204,000 reported at December 31, 2016.

Non-Interest Income

Total non-interest income was $1,812,000 for the fourth quarter of 2017, and $6,887,000 for the year ended December 31, 2017, an increase of $739,000 and $1,220,000, respectively, compared to the same periods in 2016.  Net gain on investment securities available-for-sale increased $514,000, due primarily to sales of equity securities.  The Company recorded an $87,000 net loss on trading securities in the fourth quarter 2016.  This portfolio was redeemed in its entirety during the second quarter of 2017.  Net gain on sale of loans increased $225,000, due to a $223,000 loss on sale of the finance contracts recorded during the fourth quarter 2016.  ATM and debit card income and fees for services to customers increased $26,000 and $10,000, respectively, in the fourth quarter 2017, compared with the same period in 2016.  These increases in income were offset in part by decreases in retail brokerage and advisory fees and other fee income of $117,000 and $6,000, respectively. 

Non-Interest Expense

Total non-interest expense was $5,999,000 for the fourth quarter of 2017, an increase of $564,000, or 10.4%, compared with $5,435,000 for the fourth quarter of 2016.  For year ended December 31, 2017, total non-interest expense increased $1,557,000, or 7.0%, to $23,720,000, compared to the same period in 2016.  Salaries and benefits expense increased $387,000, or 13.4%, for the quarter ended December 31, 2017, compared to the same period in 2016.  Salary expense increased $110,000, and accrued incentives increased $268,000 for the fourth quarter 2017, compared with the same period in 2016.    Net occupancy and furniture and equipment expense increased $47,000, or 5.2%, for the fourth quarter 2017 compared to the same period in 2016, due primarily to increased software, equipment and building maintenance expense of $29,000, $17,000, and $5,000, respectively offset in part by lower depreciation expense of $8,000.  Other operating expenses for the three months ended December 31, 2017 increased $130,000, or 7.9% due to increased marketing, FDIC insurance premiums, telecommunication expenses of $65,000, $67,000, $17,000, respectively, offset in part by decreased training and postage expense of $14,000 and $17,000, respectively. 

Provision for income taxes increased $2,250,000 in the fourth quarter and $2,846,000 for the year ended December 31, 2017, due to a $2,054,000 additional provision related to revaluation of the net deferred tax asset resulting from federal tax reform enacted during the fourth quarter, as well as the increase in taxable net income.  The effective tax rate for the fourth quarter and year ended December 31, 2017 was 86.0% and 41.6%, respectively, compared to 24.7% and 25.5%, respectively, for the same periods in 2016.  The increase in effective tax rate was primarily due to the above-mentioned Tax Act and resulting revaluation of net deferred tax asset.

Non-GAAP Financial Measures

Non-GAAP financial measures, such as adjusted net income and adjusted net income per diluted common share (EPS) were used to reflect the impact of one-time income tax expenses recorded as a result of the revaluation of net deferred tax asset due to enactment of the Tax Cuts and Jobs Act of 2017 which lowered corporate tax rates.  Management believes that these non-GAAP measures will provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons of our financial results over different periods and with the performance of our peers.  Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The non-GAAP financial measures we use may differ from the non-GAAP financial measures other financial institutions use to measure their performance and trends.

 Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. In the event of disclosure or release of non-GAAP financial measures, the Securities and Exchange Commission's (SEC) Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP (included in the table of this release). 

 About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking services in the communities it serves. In addition, the Company provides securities and advisory services under the name of QNB Financial Services through Investment Professionals, Inc., a registered Broker/Dealer and Registered Investment Advisor, and title insurance as a member of Laurel Abstract Company LLC. More information about QNB Corp. and QNB Bank is available at www.qnbbank.com.

 Forward Looking Statement

This press release may contain forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that increased demand or prices for the Company’s financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission, including "Item lA. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

QNB Bank and Employees Donate Over $33,000 to United Way

Quakertown, PA (January 18, 2018) QNB Bank recently held its annual campaign to raise funds for the United Way. Led by Dee Fesmire, this year’s campaign was the most successful yet, tallying up an impressive $28,179 from employees and an additional $5,636 from the Bank for a total contribution of $33,815.

QNB Bank currently operates eleven branches in Bucks, Montgomery, and Lehigh Counties and offers commercial and retail banking in the communities it serves. In addition, QNB provides securities and advisory services under the name of QNB Financial Services through Investment Professionals, Inc., a registered Broker/Dealer and Registered Investment Advisor, and title insurance as a member of Laurel Abstract Company LLC.

Area Banker Receives Exemplary Service Award

Quakertown, PA (December 8, 2017) – Rick Slimmer, Vice President/Commercial Loan Officer of QNB Bank, has received the Sigma Phi Epsilon (SigEp) 2018 Exemplary Service Award for his significant and lasting impact on SigEp’s chapters and campus communities. The award recognizes devoted and productive service to the Fraternity at the local or national level for a minimum of 20 years. Among the dedicated group of SigEp volunteers who mentor undergraduates, manage chapter assets, and assist in chapter operations, a select few stand out as truly exemplary. Each year since 2015, only 5 volunteers out of the Fraternity’s 2,400+ have been honored with this prestigious award. Rick will be formally recognized for his achievement in February at the annual Carlson Leadership Academy by SigEp’s National Board of Directors.

Rick has been the heart and soul of Pennsylvania Iota since becoming an alumnus. He’s often credited with continuing the Sig Ep tradition at Muhlenberg, his alma mater and a college of just over 2,000 students. His dedication is apparent in everything he does, from stopping by to check on the chapter house during the summer and holidays to his more than 40 years as Treasurer of the Alumni and Volunteer Corporation of SigEp. Chapter volunteers consider him a mentor and say one of the reasons they serve is for the opportunity to work with and learn from him. Rick is a Distinguished Alumnus recipient, and a chapter scholarship was named after him at the chapter’s 75th anniversary celebration in 2013.

QNB Corp. Declares Dividend

Quakertown, PA (November 29, 2017) The Board of Directors of QNB Corp. (OTC Bulletin Board: QNBC), parent company of QNB Bank, at a regular meeting on November 28, 2017 declared a quarterly cash dividend of $0.31 per share. The cash dividend is payable on December 29, 2017 to shareholders of record December 15, 2017.

QNB Corp. offers commercial and retail banking services through the 11 banking offices of its subsidiary, QNB Bank. In addition, QNB Bank provides securities and advisory services under the name of QNB Financial Services through Investment Professionals, Inc., a registered Broker/Dealer and Registered Investment Advisor, and title insurance as a member of Laurel Abstract Company LLC. QNB Corp.’s stock is traded in the over-the-counter market under the symbol “QNBC.” For more information, visit QNB’s web site at QNBbank.com.

QNB Bank Unveils 2018 Collector Calendar

Quakertown, PA (November 29, 2017) – Another New Year is just around the corner and with that comes the annual QNB Student Art Collector Calendar. Like years past, an art contest was held, open to high school students from surrounding districts. This year’s contest received a total of 88 entries from 10 different schools. The 2018 “Pets” Calendar is available now at all QNB Bank locations. Stop in and pick one up for free while supplies last!

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