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PennyMac Home Loan Financial Investment Trust Reports First Quarter 2022 Outcomes

Byadmin2

May 5, 2022
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WESTLAKE TOWN, Calif., Might 05, 2022–( ORGANIZATION WIRE)– PennyMac Home Loan Financial Investment Trust (NYSE: PMT) today reported a bottom line attributable to typical investors of $29.6 million, or $( 0.32) per typical share on a diluted basis for the very first quarter of 2022, on net financial investment earnings of $81.8 million. PMT formerly revealed a money dividend for the very first quarter of 2022 of $0.47 per typical share of helpful interest, which was stated on March 4, 2022 and paid on April 28, 2022 to typical investors of record since April 15, 2022.

Very First Quarter 2022 Emphasizes

Monetary outcomes:

  • Bottom line attributable to typical investors of $29.6 million, compared to a bottom line of $27.3 million in the previous quarter

    • Credit delicate methods affected by reasonable worth reduces arising from credit spread widening

    • Strong lead to the rate of interest delicate methods partly balanced out by $37.2 countless tax arrangements in PMT’s taxable REIT subsidiary

  • Bought 2.0 million PMT typical shares at an expense of $31.8 million; likewise redeemed an extra 990 thousand shares in April at an expense of $15.4 million

  • Book worth per typical share reduced to $17.87 at March 31, 2022 from $19.05 at December 31, 2021 1

1 As explained in Note 3 of PMT’s Yearly Report on kind 10-K for the year ended December 31, 2021, a current accounting modification needs that starting in 2022, the part of PMT’s senior notes that are exchangeable for PMT typical shares of helpful interest initially assigned to extra paid-in capital was reclassified to the bring worth of the exchangeable notes. Offering impact to this modification on a pro forma basis, PMT’s book worth since December 31, 2021 would have been $18.60.

Other financial investment highlights:

  • Financial investment activity driven by reporter production volumes

    • Standard reporter loan production volumes of $9.8 billion in overdue primary balance (UPB), down 43% from the previous quarter and 71% from the very first quarter of 2021 as an outcome of the smaller sized origination market and considerable levels of competitors for standard loans, consisting of from the federal government sponsored business (GSEs)

    • Maintained home loan securities from a PMT securitization of agency-eligible financier loans amounting to $420 million in UPB; in aggregate, the reasonable worth of PMT’s financial investments in financier loan securitizations was roughly $103 million at March 31, 2022

  • Invested $86 million in floating-rate credit danger transfer (CRT) bonds just recently provided by Freddie Mac and Fannie Mae

  • Invested $27 million in fixed-rate bonds from a senior tranche of a just recently finished jumbo securitization

Significant activity after quarter-end:

” PMT’s very first quarter bottom line was mostly driven by reasonable worth decreases in its credit delicate methods due to spread out broadening that arised from financial unpredictability throughout monetary markets and an arrangement for tax expenditure driven by reasonable worth boosts in its taxable REIT subsidiary,” stated Chairman and CEO, David Spector. “In addition, competitive pressure in the standard reporter production channel continued as home loan rates increased to levels not seen in more than a years. Alternatively, PMT’s rate of interest delicate methods carried out well, gaining from MSR net appraisal associated gains that mostly arised from lower anticipated prepayment activity in the future.”

Mr. Spector continued, “While the origination market continues to shift, greater rate of interest and broader credit spreads exist appealing chances for PMT to release capital. We continued to buy secondary tranches from the securitization of our own production of financier loans throughout the quarter. Furthermore, we just recently opportunistically invested more than $140 million in securities with appealing predicted returns from freshly provided Company CRT deals and non-agency securitizations. As the home loan environment continues to develop, PMT stays well-positioned with the deep understanding and competence of this management group to discover and buy possessions with appealing, long-lasting risk-adjusted returns.”

The following table provides the pretax earnings contributions of PMT’s sections:

Quarter ended March 31, 2022

Credit delicate methods

Rates of interest delicate methods

Reporter production

Business

Consolidated

( in thousands)

Net financial investment earnings (loss):

Bottom lines on financial investments and fundings:

CRT financial investments

$

( 35,623

)

$

$

$

$

( 35,623

)

Loans at reasonable worth

443

443

Loans held by variable interest entities internet of asset-backed protected funding

( 7,390

)

( 7,390

)

Mortgage-backed securities

( 2,335

)

( 184,190

)

( 186,525

)

( 44,905

)

( 184,190

)

( 229,095

)

Web (losses) gains on loans gotten for sale

( 4

)

3,957

3,953

Net loan maintenance charges

304,178

304,178

Net interest (expenditure) earnings:

Interest earnings

2,058

29,110

19,181

714

51,063

Interest expenditure

10,128

41,685

11,560

141

63,514

( 8,070

)

( 12,575

)

7,621

573

( 12,451

)

Other earnings

288

14,966

15,254

( 52,691

)

107,413

26,544

573

81,839

Expenditures:

Loan satisfaction and maintenance charges payable to PennyMac Financial Solutions, Inc.

59

21,029

16,754

37,842

Management charges payable to PennyMac Financial Solutions, Inc.

8,117

8,117

Other

3,211

2,175

5,212

7,224

17,822

$

3,270

$

23,204

$

21,966

$

15,341

$

63,781

Pretax (loss) earnings

$

( 55,961

)

$

84,209

$

4,578

$

( 14,768

)

$

18,058

Credit Delicate Methods Sector

The Credit Delicate Methods section mostly consists of arise from PMT’s organically-created GSE CRT financial investments, financial investments in non-agency secondary bonds from private-label securitizations of PMT’s production, opportunistic financial investments in GSE CRT and other tradition financial investments. Pretax loss for the section was $56.0 million on net financial investment losses of $52.7 million, compared to pretax earnings of $33.2 million on net financial investment earnings of $38.8 million in the previous quarter.

Bottom lines on financial investments in the section were $44.9 million, compared to net gains on financial investments of $48.3 million in the previous quarter and consisted of $35.6 million in bottom lines on PMT’s organically-created GSE CRT financial investments, $7.4 million in bottom lines from financial investments in non-agency secondary bonds from PMT’s production, $2.3 million in bottom lines on mortgage-backed securities (MBS) and $0.4 million in net gains on loans at reasonable worth.

Bottom lines on PMT’s organically-created CRT financial investments for the quarter were $35.6 million, compared to net gains of $43.1 million in the previous quarter, and consisted of $74.9 million in valuation-related losses, which showed the effect of credit spread widening. The previous quarter consisted of $1.6 million in valuation-related gains. Bottom lines on PMT’s organically-created CRT financial investments likewise consisted of $23.3 million in understood gains and bring, compared to $26.9 million in the previous quarter. Healings internet of understood losses throughout the quarter were $16.0 million, mostly associated with L Street Securities 2017-PM1, as losses were reversed for loans that had actually remained in forbearance and reperformed.

Throughout the quarter, PMT maintained home loan securities from a PMT securitization of agency-eligible financier loans amounting to $420 million in UPB. This led to roughly $23 million in reasonable worth of brand-new financial investments, internet of associated asset-backed funding. PMT likewise opportunistically invested $86 million in floating-rate CRT bonds just recently provided by Freddie Mac and Fannie Mae.

Net interest expenditure for the section amounted to $8.1 million, compared to $11.2 million in the previous quarter. Interest earnings amounted to $2.1 million, up from $1.1 million in the previous quarter. Interest expenditure amounted to $10.1 million, below $12.3 million in the previous quarter due to reduced funding expenditures as an outcome of smaller sized CRT balances.

Sector expenditures were $3.3 million, below $5.7 million in the previous quarter.

Rates Of Interest Delicate Methods Sector

The Rates Of Interest Delicate Methods section consists of arise from financial investments in MSRs, Company mortgage-backed securities (MBS), non-Agency senior MBS and rate of interest hedges. Pretax earnings for the section was $84.2 million on net financial investment earnings of $107.4 million, compared to a pretax loss of $43.2 million on net financial investment losses of $20.8 million in the previous quarter. The section consists of financial investments that usually have balancing out reasonable worth direct exposures to modifications in rate of interest. For instance, in a duration with increasing rate of interest, MSRs are anticipated to increase in reasonable worth whereas Company go through and non-Agency senior MBS are anticipated to reduce in reasonable worth.

The lead to the Rates of interest Delicate Methods section include net gains and losses on financial investments, net interest earnings and net loan maintenance charges, in addition to associated expenditures.

Bottom line on financial investments for the section was $184.2 million and included losses on MBS due to greater rate of interest.

Net loan maintenance charges were $304.2 million, compared to $12.2 million in the previous quarter. Net loan maintenance charges consisted of maintenance charges of $146.9 million, down somewhat from the previous quarter due to seasonal collection patterns, and $9.1 million in other charges, decreased by $88.9 million in awareness of MSR money streams, which were up somewhat from the previous quarter driven by greater typical MSR worths. Net loan maintenance charges likewise consisted of $392.6 million in reasonable worth boosts of MSRs, $163.8 million in associated hedging decreases, and $8.3 countless MSR regain earnings. PMT’s hedging activities are planned to handle the Business’s net direct exposure throughout all rate of interest delicate methods, that include MSRs and MBS.

The following schedule information net loan maintenance charges:

Quarter ended

March 31, 2022

December 31, 2021

March 31, 2021

( in thousands)

From non-affiliates:

Contractually defined( 1 )

$

146,885

$

148,135

$

116,287

Other charges

9,114

13,994

16,245

Impact of MSRs:

Brought at reasonable worth– modification in reasonable worth

Awareness of cashflows

( 88,919

)

( 87,734

)

( 59,385

)

Due to modifications in appraisal inputs utilized in appraisal design

392,640

( 83,995

)

337,667

303,721

( 171,729

)

278,282

( Losses) gains on hedging derivatives

( 163,802

)

9,087

( 374,403

)

139,919

( 162,642

)

( 96,121

)

295,918

( 513

)

36,411

From PFSI– MSR regain earnings

8,260

12,701

13,634

Net loan maintenance charges

$

304,178

$

12,188

$

50,045

( 1 ) Consists of contractually defined maintenance charges, internet of warranty charges.

The reasonable worth of the MSR increased by $392.6 million in the quarter, driven by greater home loan rates which led to expectations for lower prepayment activity in the future. Company MBS and rate of interest hedges reduced in reasonable worth as an outcome of boosts in market rate of interest.

Furthermore, throughout the quarter PMT opportunistically invested $27 million in fixed-rate bonds from a senior tranche of a just recently finished jumbo securitization.

Net interest expenditure for the section was $12.6 million, versus net interest expenditure of $19.9 million in the previous quarter. Interest earnings amounted to $29.1 million, up from $22.7 million in the previous quarter due to greater typical MBS balances and a decrease in prepayment activity. Interest expenditure amounted to $41.7 million, down somewhat from the previous quarter mostly due to a decrease in interest shortage from slower prepayment activity.

Sector expenditures were $23.2 million, up somewhat from $22.4 million in the previous quarter.

Reporter Production Sector

PMT obtains freshly stemmed loans from reporter sellers and usually offers or securitizes the loans, leading to current-period earnings and additions to its financial investments in MSRs associated with a part of its production. PMT’s Reporter Production section produced pretax earnings of $4.6 million, basically the same from the previous quarter.

Through its reporter production activities, PMT obtained $22.5 billion in UPB of loans, down 31 percent from the previous quarter and 56 percent from the very first quarter of 2021. Of overall reporter acquisitions, standard adhering acquisitions amounted to $9.8 billion, and government-insured or ensured acquisitions amounted to $12.7 billion, below $17.2 billion and $15.7 billion, respectively, in the previous quarter. Rates of interest lock dedications on standard loans amounted to $10.2 billion, below $14.7 billion in the previous quarter, due to decreased market volumes driving raised levels of competitors for standard loans, consisting of from the GSEs.

Sector profits were $26.5 million, a 13 percent reduction from the previous quarter and consisted of other earnings of $15.0 million, which mostly includes volume-based origination charges, net interest earnings of $7.6 million, and net gains on loans gotten for sale of $4.0 million. Net gain on loans gotten for sale in the quarter increased from the previous quarter as an outcome of greater general gain on sale margins. Interest earnings was $19.2 million, below $30.8 million in the previous quarter, and interest expenditure was $11.6 million, below $18.9 million in the previous quarter, both due to lower volumes.

Sector expenditures were $22.0 million, below $25.8 million in the previous quarter driven by the reduction in acquisition volumes and somewhat balanced out by a boost in the weighted typical satisfaction charge rate. The weighted typical satisfaction charge rate in the very first quarter was 17 basis points, up from 12 basis points in the previous quarter.

Business Sector

The Business section consists of interest earnings from money and short-term financial investments, management charges, and business expenditures.

Sector profits were $0.6 million, below $1.2 million in the previous quarter. Management charges were $8.1 million, below $8.9 million in the previous quarter. Other section expenditures were $7.2 million, up from $6.3 million in the previous quarter.

Taxes

PMT tape-recorded an arrangement for tax expenditure of $37.2 million mostly driven by reasonable worth boosts in MSRs kept in PMT’s taxable subsidiary.

Management’s slide discussion will be offered in the Financier Relations area of the Business’s site at www.pennymac-REIT.com start after the marketplace closes on Thursday, May 5, 2022.

About PennyMac Home Loan Financial Investment Trust

PennyMac Home Loan Financial Investment Trust is a home loan realty financial investment trust (REIT) that invests mostly in property mortgage and mortgage-related possessions. PMT is externally handled by PNMAC Capital Management, LLC, a wholly-owned subsidiary of PennyMac Financial Solutions, Inc. (NYSE: PFSI). Extra details about PennyMac Home loan Financial investment Trust is offered at www.PennyMac-REIT.com

Positive Declarations

This news release includes positive declarations within the significance of Area 21E of the Securities Exchange Act of 1934, as modified, relating to management’s beliefs, price quotes, forecasts and presumptions with regard to, to name a few things, the Business’s monetary outcomes, future operations, organization strategies and financial investment methods, in addition to market and market conditions, all of which go through alter. Words like “think,” “anticipate,” “expect,” “pledge,” “strategy,” and other expressions or words of comparable significances, in addition to future or conditional verbs such as “will,” “would,” “should,” “could,” or “might” are usually planned to determine positive declarations. Real outcomes and operations for any future duration might differ materially from those forecasted herein and from previous outcomes talked about herein. Elements which might trigger real outcomes to vary materially from historic outcomes or those prepared for consist of, however are not restricted to: modifications in rate of interest; our direct exposure to threats of loss and interruptions in operations arising from negative weather, manufactured or natural catastrophes, environment modification and pandemics such as COVID-19; the effect to our CRT arrangements of increased customer ask for forbearance under the CARES Act; the degree and nature of the Business’s competitors; modifications in the Business’s financial investment goals or financial investment or functional methods, consisting of any brand-new line of work or brand-new product or services that might subject it to extra threats; volatility in the Business’s market, the financial obligation or equity markets, the basic economy or the realty financing and realty markets; occasions or situations which weaken self-confidence in the monetary and real estate markets or otherwise have a broad effect on monetary and real estate markets, such as the unexpected instability or collapse of big depository organizations or other considerable corporations, terrorist attacks, natural or manmade catastrophes, or threatened or real armed disputes; modifications in basic organization, financial, market, work and domestic and worldwide political conditions, or in customer self-confidence and costs routines from those anticipated; decreases in realty or considerable modifications in U.S. real estate costs or activity in the U.S. real estate market; the schedule of, and level of competitors for, appealing risk-adjusted financial investment chances in mortgage and mortgage-related possessions that please the Business’s financial investment goals; the intrinsic trouble in winning quotes to get mortgage, and the Business’s success in doing so; the concentration of credit threats to which the Business is exposed; the Business’s reliance on its supervisor and servicer, prospective disputes of interest with such entities and their affiliates, and the efficiency of such entities; modifications in workers and absence of schedule of certified workers at its supervisor, servicer or their affiliates; the schedule, terms and implementation of short-term and long-lasting capital; the adequacy of the Business’s money reserves and working capital; the Business’s capability to keep the preferred relationship in between its funding and the rate of interest and maturities of its possessions; the timing and quantity of capital, if any, from the Business’s financial investments; our significant quantity of insolvency; the efficiency, monetary condition and liquidity of debtors; the capability of the Business’s servicer, which likewise offers the Business with satisfaction services, to authorize and keep track of reporter sellers and finance loans to financier requirements; insufficient or incorrect details or paperwork offered by clients or counterparties, or negative modifications in the monetary condition of the Business’s clients and counterparties; the Business’s indemnification and redeemed commitments in connection with mortgage it purchases and later on offers or securitizes; the quality and enforceability of the security paperwork evidencing the Business’s ownership and rights in the possessions in which it invests; increased rates of delinquency, default and/or reduced healing rates on the Business’s financial investments; the efficiency of mortgage underlying home loan backed securities in which the Business keeps credit danger; the Business’s capability to foreclose on its financial investments in a prompt way or at all; increased prepayments of the home mortgages and other loans underlying the Business’s mortgage-backed securities or associating with the Business’s home loan maintenance rights and other financial investments; the degree to which the Business’s hedging methods might or might not secure it from rate of interest volatility; the impact of the precision of or modifications in the price quotes the Business makes about unpredictabilities, contingencies and possession and liability assessments when determining and reporting upon the Business’s monetary condition and outcomes of operations; the Business’s capability to keep proper internal control over monetary reporting; innovations for loans and the Business’s capability to reduce security threats and cyber invasions; the Business’s capability to acquire and/or keep licenses and other approvals in those jurisdictions where needed to perform its organization; the Business’s capability to identify misbehavior and scams; the Business’s capability to abide by different federal, state and regional laws and policies that govern its organization; advancements in the secondary markets for the Business’s home loan items; legal and regulative modifications that affect the home loan market or real estate market; modifications in policies or the incident of other occasions that affect business, operations or potential customers of federal government companies such as the Federal Government National Home Loan Association, the Federal Real Estate Administration or the Veterans Administration, the U.S. Department of Farming, or government-sponsored entities such as the Federal National Home Loan Association or the Federal Mortgage Home Loan Corporation, or such modifications that increase the expense of working with such entities; legal and regulative modifications that affect business, operations or governance of home loan lending institutions and/or publicly-traded business; the Customer Financial Security Bureau and its provided and future guidelines and the enforcement thereof; modifications in federal government assistance of homeownership; modifications in federal government or government-sponsored house cost programs; constraints troubled the Business’s organization and its capability to please intricate guidelines for it to certify as a REIT for U.S. federal earnings tax functions and receive an exemption from the Investment firm Act of 1940 and the capability of specific of the Business’s subsidiaries to certify as REITs or as taxable REIT subsidiaries for U.S. federal earnings tax functions, as appropriate, and the Business’s capability and the capability of its subsidiaries to run successfully within the constraints enforced by these guidelines; modifications in governmental policies, accounting treatment, tax rates and comparable matters; the Business’s capability to make circulations to its investors in the future; the Business’s failure to deal properly with problems that might trigger reputational danger; and the Business’s organizational structure and specific requirements in its charter files. You must not position excessive dependence on any positive declaration and must think about all of the unpredictabilities and threats explained above, in addition to those more completely talked about in reports and other files submitted by the Business with the Securities and Exchange Commission from time to time. The Business carries out no responsibility to openly upgrade or modify any positive declarations or any other details consisted of herein, and the declarations made in this news release are present since the date of this release just.

PENNYMAC HOME MORTGAGE FINANCIAL INVESTMENT TRUST AND SUBSIDIARIES

COMBINED BALANCE SHEETS (UNAUDITED)

March 31, 2022

December 31, 2021

March 31, 2021

( in thousands other than share quantities)

PROPERTIES

Money

$

187,880

$

58,983

$

92,842

Short-term financial investments at reasonable worth

236,468

167,999

108,375

Mortgage-backed securities at reasonable worth

3,070,330

2,666,768

1,916,485

Loans gotten for sale at reasonable worth

1,708,745

4,171,025

4,646,761

Loans at reasonable worth

1,826,482

1,568,726

117,647

Acquired possessions

77,823

34,238

182,969

Deposits protecting credit danger transfer plans

1,536,862

1,704,911

2,664,420

Home loan maintenance rights at reasonable worth

3,391,172

2,892,855

2,441,214

Maintenance advances

134,002

204,951

150,160

Due from PennyMac Financial Solutions, Inc.

20,562

15,953

7,521

Other

197,189

286,299

193,860

Overall possessions

$

12,387,515

$

13,772,708

$

12,522,254

LIABILITIES

Possessions offered under arrangements to repurchase

$

5,092,700

$

6,671,890

$

6,091,973

Home loan involvement and sale arrangements

65,699

49,988

68,176

Notes payable protected by credit danger transfer and home loan maintenance possessions

2,372,279

2,471,961

2,897,794

Exchangeable senior notes

544,100

502,459

494,097

Asset-backed fundings at reasonable worth

1,712,650

1,469,999

101,238

Interest-only security payable at reasonable worth

16,373

10,593

18,922

Acquired and credit danger transfer strip liabilities at reasonable worth

129,350

42,206

229,970

Accounts payable and accumulated liabilities

117,682

96,156

122,837

Due to PennyMac Financial Solutions, Inc.

27,722

40,091

68,644

Earnings taxes payable

46,797

9,598

42,493

Liability for losses under representations and service warranties

40,225

40,249

28,967

Overall liabilities

10,165,577

11,405,190

10,165,111

INVESTORS’ EQUITY

Preferred shares of helpful interest

541,482

541,482

299,707

Typical shares of helpful interest– licensed, 500,000,000 typical shares of $0.01 par worth; provided and impressive 93,007,076, 94,897,255, and 97,938,350 typical shares, respectively

930

949

979

Extra paid-in capital

2,000,107

2,081,757

2,137,933

Collected deficit

( 320,581

)

( 256,670

)

( 81,476

)

Overall investors’ equity

2,221,938

2,367,518

2,357,143

Overall liabilities and investors’ equity

$

12,387,515

$

13,772,708

$

12,522,254

PENNYMAC HOME MORTGAGE FINANCIAL INVESTMENT TRUST AND SUBSIDIARIES

COMBINED DECLARATIONS OF OPERATIONS (UNAUDITED)

For the Quarterly Durations Ended

March 31, 2022

December 31, 2021

March 31, 2021

( in thousands, other than per share quantities)

Financial Investment Earnings

Net loan maintenance charges:

From nonaffiliates

Maintenance charges

$

155,999

$

162,129

$

132,532

Modification in reasonable worth of home loan maintenance rights

303,721

( 171,729

)

278,282

Hedging outcomes

( 163,802

)

9,087

( 374,403

)

295,918

( 513

)

36,411

From PennyMac Financial Solutions, Inc.

8,260

12,701

13,634

304,178

12,188

50,045

Web (losses) gains on financial investments and fundings

( 229,095

)

35,177

83,191

Net gains (losses) on loans gotten for sale

3,953

( 9,661

)

53,012

Loan origination charges

14,774

27,867

52,902

Interest earnings

51,063

55,680

37,589

Interest expenditure

63,514

73,738

76,308

Net interest expenditure

( 12,451

)

( 18,058

)

( 38,719

)

Other

480

1,967

966

Net financial investment earnings

81,839

49,480

201,397

Expenditures

Made by PennyMac Financial Solutions, Inc.:

Loan maintenance charges

21,088

20,847

19,093

Loan satisfaction charges

16,754

20,150

60,835

Management charges

8,117

8,919

8,449

Expert services

4,025

6,078

2,224

Loan collection and liquidation

3,177

1,321

3,857

Loan origination

2,842

4,904

9,308

Safekeeping

2,395

2,248

1,941

Payment

1,437

870

2,185

Other

3,946

3,652

2,477

Overall expenditures

63,781

68,989

110,369

Earnings (loss) prior to arrangement for (take advantage of) earnings taxes

18,058

( 19,509

)

91,028

Arrangement for (take advantage of) earnings taxes

37,187

( 2,622

)

19,425

Web (loss) earnings

( 19,129

)

( 16,887

)

71,603

Dividends on favored shares

10,455

10,454

6,234

Web (loss) earnings attributable to typical investors

$

( 29,584

)

$

( 27,341

)

$

65,369

( Loss) revenues per share

Standard

$

( 0.32

)

$

( 0.28

)

$

0.67

Watered Down

$

( 0.32

)

$

( 0.28

)

$

0.67

Weighted typical shares impressive

Standard

94,146

96,306

97,892

Watered Down

94,146

96,306

98,103

View source variation on businesswire.com: https://www.businesswire.com/news/home/20220505006006/en/

Contacts

Media
Kristyn Clark
kristyn.clark@pennymac.com
( 805) 395-9943

Financiers
Kevin Chamberlain
Isaac Garden
investorrelations@pennymac.com
( 818) 224-7028

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