Stale terms, scheduled reset: the existing book is priced for a world that has moved on
The model's full reasoning — Q3 2018 call → NOWe need to determine if management describes a meaningful portion of existing business being carried at prices/rates/terms set in the past that are now below current market, and that this existing business is coming up for repricing/renewal/reset on a schedule management can see, so that economics improve as those older terms roll off, without needing new customers. Look for evidence in the transcript. Management discusses deposit costs, loan yields, etc. They talk about deposit betas, and they have been raising rates. They mention that they have been terming out some money market deposits using deposit service agreements to lock in rates. They also mention that they are deliberately running down money market and increasing CD book to lock in rates. They talk about going out on the curve to get 12 and 18-month money. That is about new deposits, not existing book resetting. They also discuss the loan portfolio: new production has higher coupons than existing, but that's new business. They mention that the run-off of covered loans is a headwind. They talk about the possibility of retaining some high credit quality loans from the loss share portfolio, but that's a special situation. The question asks: does management describe that a meaningful portion of existing business is still carried at prices/rates/terms set in the past that are now below current market, and that this existing business is coming up for repricing/renewal/reset on a schedule management can already see, so that the company's economics are positioned to improve as those older terms roll off over the coming quarters, without needing to win new customers? Look for any mention of existing loans or deposits that will reprice upward automatically. For example, floating rate loans will reprice as rates rise. They mention that new production is 63% floating, and the portfolio is 43% floating. But that's about the mix. They don't specifically say that existing floating rate loans will reprice upward and that this is a meaningful benefit. They do mention that yields on non-covered loans increased to 4.05% from 3.96% linked quarter, partly due to coupon rate increases on floaters. That suggests that existing floating rate loans are repricing upward as rates rise.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| SNV | Synovus Financial Corp. | Q1 2024 | 2024-04-18 | B |
| FISI | Financial Institutions, Inc. | Q4 2023 | 2024-01-26 | B |
| UMBF | UMB Financial Corporation | Q3 2022 | 2022-10-26 | C+ |
| CRK | Comstock Resources, Inc. | Q2 2022 | 2022-08-02 | B+ |
| ADSK | Autodesk, Inc. | Q3 2019 | 2018-11-20 | A |
| T | AT&T Inc. | Q3 2018 | 2018-10-24 | C+ |
| DBX | Dropbox, Inc. | Q2 2018 | 2018-08-09 | B |
| ESS | Essex Property Trust, Inc. | Q2 2018 | 2018-08-03 | B+ |
| PTC | PTC Inc. | Q3 2017 | 2017-07-19 | C+ |
| BDN | Brandywine Realty Trust | Q1 2017 | 2017-04-21 | C+ |
FISI · Q4 2023 → YESThe question is about whether management describes a meaningful portion of the existing business being carried at below-current-market terms, and that it's coming up for repricing on a visible schedul...YES The transcript shows management describing exactly this situation for the company's existing loan and securities portfolios (yields rolling off) and for a meaningful portion of its deposit book (the money-market campaign with 12-month guarantees that reset in July 2024). Jack Plants explicitly ties the expected margin expansion to these scheduled repric ings and redeployments of existing cash flows, stating that the improvement is already embedded in the company's current commitments and does not require new customers or demand. This matches the criteria for a "meaningful portion" of the existing business coming up for repricing on a visible schedule. The answer is therefore YES.
PTC · Q3 2017 → YESThe question is about whether management describes a meaningful portion of the existing business being carried at below-current-market prices/terms that are coming up for repricing on a visible schedu...YES Management describes a meaningful portion of the existing business (large enterprise customers on volume purchase agreements / perpetual licenses with discounted maintenance) being carried at below-current off-the-shelf rates. These older terms are expiring on a visible schedule (many in Q4 2017), creating a compelling event where customers must either convert 50%+ ACV uplift to subscription or renew maintenance at 25% higher rates. This repricing is already embedded in the existing book and will improve economics without new customers or demand, as confirmed by the large pipeline of such opportunities and the fact that most large deals are already moving to subscription.
UMBF · Q3 2022 → YESThe question is about whether management describes a meaningful portion of the existing business being carried at below-current-market terms that will reprice/reset on a known schedule, improving econ...YES The transcript shows management describing a meaningful portion of the existing loan book carried at past terms that are now below current market levels, with repricing already scheduled: 61% of loans (~$12.1 billion) are variable-rate, 60% repricing in the next quarter and 71% within 12 months, tied to short-end indices. Loan yields rose 74 bp quarter-over-quarter to 4.46% (cycle-to-date beta 37%), and the securities portfolio is rolling off at ~1.83% yield while cash flows fund higher-yielding loans.