8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jul 15, 2011)

Filed July 15, 2011For Securities:AXP

Summary

This 8-K filing from American Express Co. provides an update on the credit performance of its U.S. Card Services (USCS) operating segment for the period ending June 30, 2011. The filing focuses on delinquency and write-off rates for the cardmember lending portfolio. Investors can find key insights into the company's credit risk management and the overall health of its loan portfolio during this period. The data presented indicates a positive trend in credit quality. The 30-day delinquency rate for USCS decreased from 1.7% in April to 1.5% in June. Similarly, the net write-off rate showed a notable decline, falling from 3.5% in April to 2.7% in June, and averaging 3.2% for the second quarter. These figures suggest that American Express is effectively managing credit risk and experiencing a reduction in problematic loans within its significant U.S. Card Services segment.

Key Highlights

  • 1The 30-day past due loan rate for U.S. Card Services (USCS) showed a declining trend, moving from 1.7% in April 2011 to 1.5% in June 2011.
  • 2The net write-off rate for USCS also demonstrated improvement, decreasing from 3.5% in April 2011 to 2.7% in June 2011.
  • 3For the three months ended June 30, 2011, the average net write-off rate for USCS was 3.2%.
  • 4Total cardmember loans in the USCS segment remained relatively stable, hovering around $49.9 billion as of June 30, 2011.
  • 5The filing provides supplementary credit performance data for the American Express Credit Account Master Trust, separate from the overall USCS portfolio.
  • 6The report clarifies potential differences in reported credit performance between the total USCS portfolio and the securitized Lending Trust due to variations in loan mix, vintage, and calculation methodologies.
  • 7The Lending Trust's annualized default rate, net of recoveries, declined from 3.7% as of March 26, 2011, to 2.9% as of May 26, 2011.

Frequently Asked Questions

The filing reports key credit metrics including the percentage of loans that are 30 days past due, the net write-off rate, and total loan balances. It also includes data on defaulted amounts and annualized default rates for the American Express Credit Account Master Trust.

The trend appears positive. Both the 30-day delinquency rate and the net write-off rate for the U.S. Card Services segment show a decrease from April to June 2011, indicating improving credit quality and reduced loan losses during this period.

The report explains that the total USCS portfolio includes both securitized and non-securitized loans, while the Lending Trust primarily reflects securitized loans. Differences in loan mix, vintage, business loan proportions, and calculation methods for write-off rates can lead to variations in their reported credit performance.

Yes, the statistics for the U.S. Card Services segment as of and for the months ended April 30, May 31, and June 30, 2011, are noted as preliminary in the filing.