Summary
This 8-K filing from American Express (AXP) provides updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for the months ending March 31, April 30, and May 31, 2011. The data indicates a positive trend in credit quality, with both the 30-day past due loan rate and the net write-off rate declining sequentially over the reported period. Total loans in the USCS portfolio also showed a slight increase, suggesting continued portfolio growth. Furthermore, the filing includes comparable credit performance data for the American Express Credit Account Master Trust (Lending Trust), which is a portion of the overall USCS portfolio. While the Lending Trust also shows improved credit metrics, the company notes that direct month-to-month comparisons between the total USCS portfolio and the Lending Trust can be influenced by differences in loan mix, securitization mechanics, and reporting period timing. Investors should note the general downward trend in delinquencies and write-offs as a positive indicator of the company's credit risk management.
Key Highlights
- 1Delinquency rate (30+ days past due) for U.S. Card Services declined from 1.8% in March 2011 to 1.6% in May 2011.
- 2Net write-off rate for U.S. Card Services decreased from 3.7% in March 2011 to 3.2% in May 2011.
- 3Total loans in the U.S. Card Services portfolio grew from $49.2 billion in March 2011 to $50.3 billion in May 2011.
- 4The American Express Credit Account Master Trust also showed a declining annualized default rate, falling from 3.9% to 3.2% over its reporting periods.
- 5The filing clarifies potential differences in reported credit performance between the total USCS portfolio and the securitized Lending Trust due to varying methodologies and loan compositions.
- 6These statistics are furnished in accordance with Regulation FD to provide additional, timely information on credit portfolio performance.