Summary
This 8-K filing from American Express Company (AXP), filed on June 15, 2010, provides updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for the months of March, April, and May 2010. Investors should note the downward trend in both 30-day past due loans as a percentage of total loans and the net write-off rate for the USCS total portfolio. This indicates improving credit quality within the company's core lending business during this period. The report also includes data for the American Express Credit Account Master Trust, which is a securitized portfolio. While the trends in the trust's annualized default rate and 30+ days delinquent amounts are also generally positive, the filing clarifies that the performance of the securitized trust may differ from the total USCS portfolio due to various structural and loan characteristic differences. Investors should primarily focus on the USCS total portfolio data as a more comprehensive indicator of American Express's overall credit risk management.
Key Highlights
- 1USCS 30-day past due loans as a percentage of total loans decreased from 3.3% in March 2010 to 2.9% in May 2010.
- 2USCS net write-off rate declined from 7.5% in March 2010 to 6.3% in May 2010, indicating reduced credit losses.
- 3Total loans in the USCS segment remained relatively stable, ranging from $48.9 billion to $49.5 billion during the reporting period.
- 4The American Express Credit Account Master Trust saw its annualized default rate decrease from 7.3% to 6.1% between its March and May 2010 reporting periods.
- 5Total 30+ days delinquent amounts in the Lending Trust also showed a declining trend, from $1.2 billion to $1.0 billion.
- 6The filing clarifies differences between the USCS total portfolio and the securitized Lending Trust portfolio, explaining potential performance variations.
- 7The data provided is supplemental to the standard 10-D filings for the securitized trust.