Summary
This 8-K filing from American Express Company (AXP) provides updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for the months ending June 30, July 31, and August 31, 2009. The report primarily focuses on performance metrics presented on both an "owned" (GAAP) basis and a "managed" basis, with the latter being emphasized as management's preferred view for understanding the business dynamics. Investors should note that the "managed" basis presentation offers a more comprehensive look at the company's cardmember lending business by including securitized loans. Key trends observed include a general decline in the 30-day past due percentages on a managed basis throughout the reported period, moving from 4.4% in June to 4.1% in August. Similarly, the net write-off rate on a managed basis showed improvement, decreasing from 9.9% in June to 9.0% in August. While the "owned" basis also saw a dip in 30-day delinquencies, its net write-off rate saw a slight increase in August, which the company attributes to specific securitization mechanics, including loan transfers to the American Express Credit Account Master Trust. The filing also includes performance data from the Lending Trust itself, showing a notable decrease in its annualized default rate in the most recent period, also influenced by securitization activities.
Key Highlights
- 1American Express is providing updated delinquency and write-off statistics for its U.S. Card Services segment for June, July, and August 2009.
- 2The "managed basis" presentation, which includes securitized loans, is highlighted as management's preferred view for understanding the business.
- 3On a managed basis, 30-day past due loan percentages generally decreased from June (4.4%) to August (4.1%).
- 4The net write-off rate on a managed basis showed improvement, declining from 9.9% in June to 9.0% in August.
- 5The "owned basis" net write-off rate increased in August, attributed by the company to specific securitization events and loan transfers.
- 6Data from the American Express Credit Account Master Trust (Lending Trust) shows a decrease in its annualized default rate in the period ending August 25, 2009, influenced by loan acquisitions.
- 7The filing includes forward-looking statements and risk factors related to credit risk management, economic conditions, and potential impacts on future write-off rates.