8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (May 16, 2011)

Filed May 16, 2011For Securities:AXP

Summary

American Express Company (AXP) filed an 8-K on May 16, 2011, to disclose delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for February, March, and April 2011. The report provides insights into the credit quality of the company's loan portfolio, a key indicator for financial institutions. Overall, the data shows a favorable trend with declining delinquency and net write-off rates for the USCS total portfolio during the reported period. Specifically, the 30-day past due loan percentage decreased from 2.0% to 1.7%, and the net write-off rate improved from 3.8% to 3.5%. This suggests strengthening credit performance and effective risk management within American Express's core lending business, which is positive news for investors concerned about credit losses.

Key Highlights

  • 1Filing provides delinquency and write-off statistics for the U.S. Card Services (USCS) operating segment for February, March, and April 2011.
  • 2Total loans in the USCS segment showed a slight increase, moving from $48.3 billion to $49.4 billion over the three-month period.
  • 3The 30-day past due loan rate for USCS demonstrated a positive downward trend, decreasing from 2.0% in February to 1.7% in April 2011.
  • 4The net write-off rate for USCS also improved, declining from 3.8% in February to 3.5% in April 2011, indicating better credit quality and lower expected losses.
  • 5Additional data is presented for the American Express Credit Account Master Trust (Lending Trust), showing a decrease in the annualized default rate from 4.2% to 3.7% over its reporting periods.
  • 6The company notes differences in loan characteristics and calculation methodologies between the total USCS portfolio and the securitized Lending Trust portfolio, which can lead to variations in reported credit performance.

Frequently Asked Questions

The primary purpose of this 8-K filing is to voluntarily disclose current delinquency and write-off statistics for American Express's U.S. Card Services (USCS) operating segment for the months of February, March, and April 2011. This information provides investors with timely insights into the credit quality of the company's loan portfolio.

The trends observed in the USCS portfolio are positive. The percentage of loans that are 30 days past due decreased from 2.0% in February to 1.7% in April 2011. Similarly, the net write-off rate improved, falling from 3.8% in February to 3.5% in April 2011. These improvements suggest a strengthening credit environment and effective credit risk management by American Express.

The filing provides data for both the total USCS portfolio and the American Express Credit Account Master Trust (Lending Trust). While both show improving credit metrics, there are noted differences in their characteristics and how statistics are calculated. The Lending Trust's annualized default rate decreased from 4.2% to 3.7% over its reporting periods. The company explains these differences arise from variations in loan mix, vintage, and calculation methods, so direct month-to-month comparison should be made with caution.

No, these statistics are furnished under Regulation FD Disclosure (Item 7.01) and are provided in addition to the data reported in the Lending Trust's Form 10-D filings. They offer a more current snapshot of credit performance than typically found in quarterly or annual financial statements but are not the primary financial statements themselves.