Summary
This 8-K filing from American Express Company (AXP) on April 15, 2010, provides updated delinquency and write-off statistics for its U.S. Card Services (USCS) segment for the months of January, February, and March 2010, as well as the first quarter of 2010. The data indicates a slight sequential increase in the net write-off rate for the USCS lending portfolio in February and March, which aligns with prior company disclosures about potential increases in the first quarter. However, the company anticipates a lower net write-off rate for the second quarter of 2010, assuming credit trends, recoveries, and bankruptcies remain consistent with late 2009 levels. The filing also provides separate credit performance data for the American Express Credit Account Master Trust, which is securitized. While this data may differ from the total USCS portfolio due to varying loan characteristics and calculation methodologies, it generally shows stable or slightly improving delinquency rates and consistent annualized default rates, net of recoveries, over the reported periods. Investors should note that these are preliminary figures and are subject to the risks and uncertainties outlined in the company's forward-looking statements.
Key Highlights
- 1AXP furnished preliminary delinquency and write-off statistics for its U.S. Card Services (USCS) segment for January, February, and March 2010.
- 2The net write-off rate for the USCS lending portfolio saw a slight sequential increase in February (7.4%) and March (7.5%) 2010, consistent with prior company expectations for Q1 2010.
- 3American Express expects the USCS net write-off rate for Q2 2010 to be lower than Q1 2010, assuming stable credit trends and macroeconomic conditions.
- 4Total loans in the USCS portfolio decreased slightly from $50.9 billion in January to $49.2 billion by March 31, 2010.
- 530-day past due loans as a percentage of total loans remained stable at 3.3% for March 2010, down from 3.6% in January and February.
- 6Data for the American Express Credit Account Master Trust (securitized portfolio) shows a largely stable annualized default rate, net of recoveries, around 7.6% - 7.8% for the period ending February 2010.
- 7The filing highlights potential differences between the total USCS portfolio and the securitized trust portfolio due to loan mix, vintage, and calculation methods.