Full Transcript: Peoples Bancorp Q2 2026 Earnings Call

Peoples Bancorp (NASDAQ:PEBO) reported second-quarter financial results on Tuesday. The transcript from the company's second-quarter earnings call has been provided below.

This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.

Access the full call at https://app.webinar.net/qD3QK9ljvY0

Summary

Peoples Bancorp reported a 6 basis point increase in net interest margin, driven by disciplined deposit costs and higher interest income.

The company's balance sheet is well-positioned for a rising rate environment, with a neutral stance on fee-based income, which grew by $3 million in the first half of 2026.

Noninterest expenses rose by 2%, influenced by acquisition-related costs and increased operating lease expenses.

The efficiency ratio improved to 58.3% in Q2 2026, attributed to higher revenue.

Loan-to-deposit ratio increased to 91.5%, with a reduction in deposits partly offset by increases in money market and noninterest-bearing deposits.

The company anticipates the Citizens merger to close by early Q4 2026 and expects core system conversion by early Q2 2027.

Guidance for 2026 includes a net interest margin between 4.1% and 4.3% and fee-based income between $28 million and $30 million per quarter.

Management remains optimistic about potential future acquisitions and maintaining asset levels under $10 billion.

Expectations for loan growth are towards the lower end of 3% to 5% due to paydowns, while anticipating positive impacts on credit loss provisions.

Full Transcript

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Or 6%, while net interest margin expanded 6 basis points. Our deposit cost discipline along with higher interest income contributed to the increase. Accretion income totaled $2.4 million compared to $6.1 million for 2025, contributing 6 basis points and 15 basis points to net interest margin respectively. As far as our balance sheet structure at this time, we are positioned to benefit more from a rising rate environment. A falling rate environment would cause a nominal reduction in our net interest income.

However, rate uncertainty validates our relatively neutral position as it relates to our fee-based income. We had growth of over $340,000 compared to the linked quarter. We had improvements in the majority of our fee-based income lines which more than offset the decline in insurance income driven by the annual performance-based insurance commission received in the first quarter of each year. For the first six months of 2026, fee-based income grew $3 million mostly due to higher lease income and trust and investment income.

Our noninterest expenses were up 2% compared to the linked quarter, which included $410,000 of acquisition-related expenses, the majority of which contributed to the increase in professional fees. For the first six months of 2026, noninterest expenses were up 2%. The growth was driven by higher operating lease expenses, which corresponds to our fee-based lease income, as well as salaries and employee benefits costs and data processing and software expense.

For the first half of 2026, we have recorded $426,000 of acquisition-related expenses. Our reported efficiency ratio was 58.3% for the second quarter and 58.6% for the linked quarter. The improvement in our efficiency ratio was driven by higher revenue compared to the first quarter. For the first 6 months of 2026, our reported efficiency ratio was 58.4% compared to 60% for the prior year and was also driven by higher revenue. Looking at our balance sheet at quarter end, our loan-to-deposit ratio increased to 91.5% compared to 88.5% at March 31.

As we had loan growth for the second quarter coupled with a reduction in deposits, our investment portfolio as a percent of total assets declined to 19.1% at June 30 compared to 20.3% at the linked quarter end. The decline was driven by the sale of approximately $135 million of available-for-sale investment securities, resulting in a loss of $8.2 million for the second quarter. These sales were part of our current plan to stay below $10 billion in total assets and restructure our portfolio in conjunction with the pending Citizens merger.

Our core deposit balances, which exclude brokered CDs, declined $155 million compared to March 31. As expected, we had seasonal decreases in our governmental deposits, which were down $87 million. We also had reductions in our interest-bearing demand accounts of $17 million. During the second quarter, we also had reductions of $92 million in retail CDs. However, we improved our deposit costs by 6 basis points compared to the linked quarter. These declines were partially offset by an increase of $37 million in money markets and $7 million in noninterest-bearing deposits.

Our demand deposits as a percent of total deposits grew to 36% at June 30 compared to 35% at the linked quarter end. Our noninterest-bearing deposits to total deposits ratio was flat at 21% for both June 30 and March 31. As it relates to our capital levels, all of our regulatory capital ratios improved compared to the linked quarter end as earnings outpaced dividends. I will now turn the call back over to Tyler for his closing comments.

Tyler Wilcox, President and Chief Executive Officer

Thank you, Katie. We continue to make progress with the pending Citizens merger and are excited about the opportunity to bring our associates together. We have spent a considerable amount of time within the footprint interacting with associates and hosting meetings to discuss our future. We are coordinating processes between teams, both on the front lines and operationally, to ensure a seamless transition. We are awaiting regulatory and Citizens shareholder approvals for the merger but are anticipating a close date of early in the fourth quarter of 2026.

As with recent bank acquisitions, the core system conversion will be at a later date, which we are targeting to take place early in the second quarter of 2027. At the same time, we will continue to be opportunistic about other potential acquisitions. Moving on to our performance expectations for the full year of 2026, excluding the impact of non-core expenses and the planned merger, we expect to achieve positive operating leverage for 2026 compared to 2025.

We anticipate our net interest margin will be between 4.1% and 4.3% for the full year of 2026. A 25 basis point increase in rates from the Federal Reserve is expected to result in a 6 to 8 basis point improvement in our net interest margin for the full year. We believe our quarterly fee-based income will range between $28 million and $30 million. We expect quarterly total noninterest expense to be between $73 million and $75 million for the remaining quarters of 2026.

We believe our loan growth will come in towards the low end of our guided range of 3% to 5% due to the continued movement of paydowns from late 2025 to 2026. We anticipate a slight reduction in our net charge-offs for 2026 compared to 2025, which we expect to continue to positively impact provision for credit losses, excluding any changes in the economic forecast. For the remainder of the year, we will focus on the integration of the Citizens merger along with continuing to develop our core business while closely monitoring our total asset levels in relation to the $10 billion threshold.

As we mentioned before, we continue to have diverse and potentially fruitful conversations with other institutions. Our lines of business work together to deliver a client experience unlike many institutions, and we see opportunities arise because of our unique market offerings for the clients and associates of Citizens. We are excited to share our deep bench of experienced professionals who will bring access to our vast array of products and services.

This concludes our commentary and we will open the call for questions once again. This is Tyler Wilcox, and joining me for the Q&A session is Katie Bailey, our Chief Financial Officer. I will now turn the call back into the hands of our call staff facilitator. Thank you.

OPERATOR

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time we'll pause momentarily to assemble the roster. The first question will come from Jeff Rulis with DA Davidson. Please go ahead.

Ryan Payne, Analyst at DA Davidson

Good morning, this is Ryan Payne on for Jeffrey's today. Starting on the margin, does that 410 to 430 for the full year bake in any rate move expectations?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

It does not. It's a relatively stable rate environment.

Ryan Payne, Analyst at DA Davidson

Got it. Okay. And maybe bigger picture. What would have to happen for the margin to end the year at the higher end of that range?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

I mean, I think the aggressiveness by which we continue to reprice our CDs and the ability to maintain a sizable deposit book on the noninterest-bearing or the interest-bearing account. I think that will be heavily influencing, as you saw the outcome in this quarter in the margin. So I think that will have heavy influence in the margin going forward.

Ryan Payne, Analyst at DA Davidson

Understood. I was going off on deposits there, some seasonality it sounds like. But how would you describe the competitive environment for funding now, and would you expect to increase rates to maintain or grow deposits this year?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

I would say that deposit competition remains relatively stable. I think it's competitive, but it's not increasingly so relative to what we've been seeing the last few months. I think we will continue to evaluate the term of rate increases. I don't know that the rates on the shorter-term products will move significantly. But I think with rate expectations as they are and as they evolve over time, we'll continue to evaluate the term at which we're raising rates.

Ryan Payne, Analyst at DA Davidson

Okay, thanks. That's all for me.

OPERATOR

Thank you. The next question will come from Brendan Nosell with Hovde Group. Please go ahead.

Anira, Analyst at Hovde Group

Hi, this is Anira on for Brendan. First question, kind of looping back to the NIM and looking on Slide 15. We can see you increased your sensitivity to a plus 25 increase with the Fed funds from 3 to 4 basis points previously to 6 to 8 basis points currently. Can you just unpack that change a bit and dig into the drivers behind that?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Yeah. So I just want to be clear. The projection or the guidance of 410 to 430 is a steady rate environment. It does not include an increase or a decrease in rates. What we have been doing in the past couple quarters is quantifying if rates do go down by 25 basis points or if the Fed moves by 25 basis points. We've been quantifying what that would do on an annual basis to our margin. And given when we were drafting this, the expectation was more likely for a rate increase than a rate cut.

We quantified the upside potential of a 25 basis point increase. That's not baked into that 410 to 430. That's just articulating what the benefit would be if that situation unfolds. And so I think it's largely that we have over 50% of our loan portfolio as variable rates. I think that's influencing the benefit on the upside. And given our deposit costs, as you can see in the release and in the presentation, there's not as much room to go down in that avenue as there is to go up on the variable-rate loan.

Anira, Analyst at Hovde Group

Thank you. And just one follow up. Looping into credit. In your opening remarks you talked about those two commercial credits. Is there any other color that you can provide on them?

Tyler Wilcox, President and Chief Executive Officer

Sure. This is Tyler, a couple thoughts. Two completely different credits, first of all, so no commonality between them. One is a larger multifamily project that is in footprint, somewhat anchored to a related kind of large economic project that is somewhat delayed but we believe will continue. So, you know, hence the comment that we don't expect any kind of losses over the long term in that project. The other is in vehicle floorplan finance that we expect to be fully paid off by the end of the year.

So again, no losses expected and no pattern there. Just kind of a reversion to the mean is what I would say with respect to the criticized and our kind of historical, historical averages.

Anira, Analyst at Hovde Group

Perfect. Thank you. And that's all my questions.

OPERATOR

Thank you. Thank you. The next question will come from Daniel Tamayo with Raymond James. Please go ahead.

Tim Delacion, Analyst at Raymond James

Hey, good morning, Tyler. Good morning, Katie. This is Tim Delacion for Danny. Hope you're doing well.

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Good to hear from you.

Tim Delacion, Analyst at Raymond James

Hey. Hey. So just starting off on loan growth here, you know, loan growth was obviously impacted by the CRE paydown activity, but, you know, otherwise growth is pretty good outside of that. So, you know, just curious if you can help us think about the expectations, you know, you guys have for payoff activity, you know, in the back half of the year and, you know, maybe how loan pipelines are shaping up.

Tyler Wilcox, President and Chief Executive Officer

Sure thing. Thanks for the question. So a couple thoughts on the expected paydowns. We guided last quarter that we expected about $480 million in payoffs for the full year and estimated that we would come in at about, you know, two-thirds to three-quarters of that in the first half. Where we came out was about $300 million in the first half. We still expect the full year to fall somewhere around that original estimate. So call it anywhere from $150 to $200 million for the remainder of the year.

So that certainly is a bit of a headwind. And then you combine that a little bit with some of the, a good, I would say, robust pipeline that's kind of competing with that and a little bit of remixing over the last multiple quarters into the C&I business away from the CRE business because of the increased paydowns in CRE is where we land there at that kind of lower end of the guide because the payoffs, amortization. And then the final kind of factor I would add would be that in the consumer lending, we're seeing kind of muted demand.

So we expect kind of indirect auto to be largely flat throughout the year and not experience growth as well. So those would be the kind of puts and takes factors that are getting us out there with respect to the loan growth.

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Yes, they were sold in early May and the yields were about 2.75%.

Tyler Wilcox, President and Chief Executive Officer

Yeah, since we last spoke, the story is really, it is what we thought it was. And that's why we're very excited about adding it. You know, the strong deposit base, you know, good loyal clients and communities that we do well in, you know, and an opportunity. We've added some, for example, some wealth management professional capabilities in those markets and are already seeing some benefits there. We are very strong in insurance in eastern Kentucky and bringing to bear those introductions to our clients and kind of the beginnings of the cross pollination that will take place over the coming months and years.

And so we're very excited about those two core businesses of ours, particularly the investments in insurance and the opportunity to provide those to the Citizens clients and everything is according to plan. I will note, just since you asked about Citizens and a couple of the early reaction notes I think commented that the expected closing was delayed. We don't view it as delayed and if we gave that impression, I just wanted to clear that up. I think we had guided second half in last quarter's call and we are still right on schedule.

And everything of course is pending regulatory approval and shareholder approval. But we believe we're right on track with where we expected to be. Thank you.

OPERATOR

The next question will come from Tim Switzer with KBW. Please go ahead.

Tim Switzer, Analyst at KBW

Hey, good morning. Thank you for taking my questions.

Tyler Wilcox, President and Chief Executive Officer

Good morning, Tim.

Tim Switzer, Analyst at KBW

I have a follow up on the balance sheet restructuring. I think you guys previously talked about selling about $560 million of balances, including the Citizens portfolio. Should we expect more sales to occur before the deal closes? And if it's after the deal closes, what's the timing we should expect for that?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Yeah, so just as a reminder, about half of that was the sale of what we would be acquiring from Citizens in their investment portfolio. And then about half of it was selling some of our portfolio and you've seen us sell about half of our contribution of that. We would anticipate selling the Citizens portion, including as close to close as possible. And we will continue to evaluate the sale of the remaining component of our portfolio. We may do something in the third, but it likely wouldn't be until the fourth.

And it will all just be dependent on where we are from an asset size and where the rate environment is at the time.

Tim Switzer, Analyst at KBW

Okay, and do you still see a way for that to be accretive to NII by pairing it with the offloading of, I assume, brokered deposits, kind of like what we saw this quarter?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Yes, I think that's right. And an overnight position as well, once brokered, completely eliminated, reduced.

Tim Switzer, Analyst at KBW

Okay, that's helpful. And putting Citizens aside for a minute, how do you see the trajectory of the margin over the rest of this year? In early '27, assuming there's no rate movements at all, do you think you can continue to squeeze out a little bit of margin improvement going forward?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Yes, I think there continues to be some mix shift in the deposit portfolio. So I think there's upward potential.

Tyler Wilcox, President and Chief Executive Officer

The only thing I would add that adds some potential upside as well is, you know, we've been decreasing the small ticket leasing portfolio and we expect kind of in early 2027 for that to begin to turn around and see growth there and higher yielding assets there have the potential to impact NIM as well.

Tim Switzer, Analyst at KBW

Okay, okay. And how do you see the rate environment, especially with rates moving higher over the last few months, how do you see that impacting the credit performance of the leasing portfolio?

Tyler Wilcox, President and Chief Executive Officer

Yeah, you know, I think it depends. I think more impact potentially is, you know, we've weathered, I would say we've weathered the, you know, tariff, you know, kind of questions. We've seemed to have weathered the, you know, kind of fuel price increases, which, you know, this portfolio specifically is a little bit more, you know, small business oriented. Now recall that these are fixed rate leases in this business, but, you know, the term is also not incredibly long.

So we think there's limited credit risk there overall. And you know, depending on, I don't think, I don't think a quarter, a couple of rate increases will be meaningfully, you know, a meaningful change. And recall that that portfolio is already kind of at a gross origination yield of between 18 and 20%. So they're not particularly rate sensitive given the, you know, the originations being where they are.

Tim Switzer, Analyst at KBW

Okay, got that. That's super helpful. Thank you guys.

Tyler Wilcox, President and Chief Executive Officer

Thank you.

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Thanks, Tim.

OPERATOR

The next question will come from Nathan Race with Piper Sandler. Please go ahead.

Adam Kroll, Analyst at Piper Sandler

Hey, this is Adam Kroll on for Nate. Good morning Tyler and Katie and thanks for submitting my questions.

Tyler Wilcox, President and Chief Executive Officer

No problem.

Adam Kroll, Analyst at Piper Sandler

Maybe a question for Katie. So just going back to the margin, I think last quarter's call you mentioned an additional 15 to 20 basis points opportunity still in potential NIM expansion for 2027 post the security sale and borrowings pay down. So I guess is that still the right way to think about it for 2027 and just any additional color there?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

Yes, I think so. And that was in conjunction with the Citizens acquisition, I think collectively which was inclusive of this securities trade that we've been talking about. We just preemptively did a portion of our sale in the second quarter but yes, that's still accurate.

Adam Kroll, Analyst at Piper Sandler

Got it. And then could you remind us what you have in terms of fixed rate loans that would be set to reprice higher over the next 12 months or so?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

I mean our fixed rate book is about 46, 48% of the portfolio. Average three to five, I think average life three to five years. So yeah.

Adam Kroll, Analyst at Piper Sandler

Okay. Maybe moving to the charge off guide for a slight reduction for '26. I was wondering if you could quantify this slight reduction guide a bit further. And you know is the expectation that charge offs remain around the 30 to 40 basis point range for the back half of the year?

Tyler Wilcox, President and Chief Executive Officer

Yeah, I think your "slight, slight" may be a little bit understating it at this point. You know, we were pleased with moving to, you know, kind of an annualized rate of 31 basis points and I think you'll see consistency. You know, we talked for a while about the major component of that being the small ticket leasing and that is 20, 20 basis points of our 31 for this quarter. And we talked about for the last year kind of the plateau in the second half kind of coming down and we still expect that and maybe are seeing that happen a little bit earlier than we had expected, which is a good sign.

So you know I think when you compare us year over year, we expect this trend to continue for the remainder of the year. Continued strength in the commercial which doesn't really have much charge off to speak of. You saw consumer come down because the first quarter is generally historically our larger charge off quarter in that space and small ticket leasing continues to decline. So we are optimistic.

Adam Kroll, Analyst at Piper Sandler

Got it. Thanks for that Tyler. And on North Star, I was wondering if you had the contribution, the charge off contribution from the high balance accounts during the quarter.

Tyler Wilcox, President and Chief Executive Officer

High balance accounts specifically. If you give me one sec to shuffle some papers I can get that for you. First of all, the high balance accounts at this point comprise about 7% of the total portfolio. And so their contribution to the losses was about 1.3, 1.4 million of the 9 million in charge offs or so. Excuse me, of the year to date charge offs, not quarterly charge offs.

Adam Kroll, Analyst at Piper Sandler

Okay, got it. Thanks for taking my questions.

Tyler Wilcox, President and Chief Executive Officer

Thank you.

OPERATOR

The next question will come from Daniel Cardenas with Brean Capital. Please go ahead.

Daniel Cardenas, Analyst at Brean Capital

Morning, guys.

Tyler Wilcox, President and Chief Executive Officer

Morning, Dan.

Daniel Cardenas, Analyst at Brean Capital

Thanks for all the color so far on the margin and all the moving pieces. So it sounds like deposit competition is still relatively sane and kind of stable-ish. But can you provide some color on the lending side? What's competition for the better quality loans looking like? And you know, would you say that the market is still, you know, or competition is still rational coming here into 3Q?

Tyler Wilcox, President and Chief Executive Officer

Thanks, Dan. I would say it's largely rational. I would say there is a small element of, you know, the pressure on balances, particularly in the commercial real estate space, of increased competition. And as we've said on this call before, we are not inclined to chase stupid and we'll be happy to trade slightly lower balances for sticking to our knitting on pricing. But it is competitive for quality assets. We're not seeing the lemmings going over the cliff to any degree, just to be very clear.

But we are scrutinizing deals that we want, being competitive where we are. And there are also maybe a bit fewer projects in general out there, but again, not any major trends that I would identify at this point. I don't know if that helps.

Daniel Cardenas, Analyst at Brean Capital

Very helpful. Thank you. And then just looking at your margin here for the quarter and accretion was about 5 basis points contribution to the margin. Absent Citizens, is the expectation that yield accretion continues to give you about 5 basis points for the next couple of quarters?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

I think that it starts to come down a basis point a quarter roughly. I mean stable to down a basis point, I would say. But it's in the range of 5 basis points. Yes.

Daniel Cardenas, Analyst at Brean Capital

All right. All my other questions have been asked and answered. Thank you guys.

Tyler Wilcox, President and Chief Executive Officer

Thanks, Dan.

OPERATOR

Again, if you have a question, please press star and then one. The next question will come from Matthew Breese with Stephens Inc. Please go ahead.

Matthew Breese, Analyst at Stephens Inc.

Hey, good morning. First for me, this topic has been talked about a couple times too. But Katie, just curious, what was the spot cost of deposits and the spot NIM at the end of the quarter? And I guess I'm curious. I'm going to ask it a different way. How you feel about your ability to maintain or further lower deposit costs from here? Is that realistic?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

I think it is. I think we were right around the 4.20% range for the spot at the end of June. There is some nuance in each month, as you might expect, but I do think maybe not as much expansion per quarter, but I think there continues to be some room to reprice some of our CDs downward as we proceed through the year.

Matthew Breese, Analyst at Stephens Inc.

Okay, so we're not done yet on deposit costs?

Kathryn Bailey, EVP, Chief Financial Officer And Treasurer

I don't think so.

Matthew Breese, Analyst at Stephens Inc.

And then, Tyler, you had mentioned some of the dynamics within commercial real estate. Do you think that that portfolio has been down for three quarters in a row? Do you think we can start to see some commercial real estate balance stabilization by the end of the year? And what is your expectation on when you might be able to show some growth there?

Tyler Wilcox, President and Chief Executive Officer

Yeah, first of all, I don't mind, as I mentioned earlier, I don't mind our kind of mix shift towards C&I. As you're aware, we've kind of been proud of our ability to be selective in the commercial real estate space and in our lower portion of CRE to risk-based capital that, you know, I think is now around 178%. So that's kind of been a strategic goal. The pipeline is strong in that area. You know, recall part of what is driving these payoff pressures is largely two things: one, earlier sales of many of these properties, so it shows there's still high demand in the space; and two, kind of the permanent market refinancing opportunities. But as I look at our pipeline and as we evaluate that, we do think there is still strong demand. And I could see us, you know, going into the 2027 with stabilized to potentially increasing over the coming year. But I am very comfortable with where we are at and where that mix shift is. And it gives us the ability to be very competitive and price right and select the deals that make the most sense for our credit philosophy, which is to be highly selective.

Matthew Breese, Analyst at Stephens Inc.

Got it. Okay. Last one for me is, obviously there's a lot on your plate with the upcoming deal close, but given the balance sheet size dynamics, I would imagine that you remain engaged in additional M&A conversations. And we'd just love to hear about how those conversations are going and whether or not you see opportunity on that front in the near to medium term. Thank you.

Tyler Wilcox, President and Chief Executive Officer

Absolutely. Thank you. And, you know, one, we remain ready, willing, and able to do additional deals and would feel very comfortable. And I'm not announcing an announcement, but just to say we would be very comfortable in making an announcement should something materialize that we find strategically compelling. Engaged in a lot of discussions, and I hope they are fruitful. And I believe that there are counterparties out there that are interested in the story and in the upside of a better future together.

And we continue to engage in those conversations and hope that some of them will bear some fruit here. So in the meantime, we're, as we have for, you know, call it three years plus now, exercising strategic patience and focusing on executing in the core, which I think this quarter really demonstrates, as this year as a whole. So we are ready to go and optimistic.

Matthew Breese, Analyst at Stephens Inc.

I'll leave it there. Thanks. Thank you so much.

OPERATOR

At this time, there are no further questions. Sir, do you have any closing remarks?

Tyler Wilcox, President and Chief Executive Officer

Yes. I want to thank everyone for joining our call this morning. Please remember that our earnings release and a webcast of this call, including our earnings conference call presentation, will be archived at peoplesbancorp.com under the Investor Relations section. Thank you for your time and have a great day.

OPERATOR

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.