Stale terms, scheduled reset: the existing book is priced for a world that has moved on
The model's full reasoning — Q4 2017 call → NOWe need to determine if management describes that a meaningful portion of existing business is still carried at prices/terms below current market, and that this business is coming up for repricing on a schedule already determined, so economics improve as older terms roll off without needing new customers. Look at the transcript. Kevin O'Donnell discusses January 1 renewals. He says: "Due to the cat events in the second half of the year, the reinsurance market at January 1 was improved over prior renewals and our structure and access to the right capital allowed us to execute well and grow into the better terms. We saw the reversal of several years of declining rates in our property segment with across the board increases and material opportunities to grow both our property catastrophe and other property portfolios." That's about new business and renewals at Jan 1. He also says: "It is noteworthy that a significant portion of our portfolio is multiyear in nature, which reduces the amount of limit subject to rate increase. That said, we were able to access new business and grow in the market with relatively flat demand." This suggests that a significant portion of the portfolio is multiyear, meaning it is not subject to rate increases until later. But does he describe that as a gap between old terms and current terms that will reset? He says "reduces the amount of limit subject to rate increase" - that implies that the multiyear business is at older, lower rates, and will not reset soon. He doesn't describe a schedule for when those multiyear contracts will reset. He mentions that only about 40% of property portfolio renews at 1/1, and there will be more loss affected programs incepting at midyear. He says: "We would expect to see the recent price increases carry forward to those programs as we move through 2018." That is about future renewals, not already secured resets. He says "we would expect" - that's expectation, not already determined. He also says: "For the year, we grew gross written premium in our casualty segment by 7%... At the January renewal, rates in casualty lines were up and terms and conditions generally remained stable." That's about new renewals.
| 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.