8-KRegulation FD

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

Filed September 15, 2011For Securities:AXP

Summary

This 8-K filing by American Express Company (AXP) on September 15, 2011, provides investors with updated credit performance metrics for its U.S. Card Services (USCS) operating segment for the months of June, July, and August 2011. The report details delinquency and write-off rates for its cardmember lending portfolio, offering insights into the credit quality of its loan book. Key data points include total loans, 30-day past due percentages, and net write-off rates. Additionally, the filing provides comparative data from the American Express Credit Account Master Trust, highlighting potential differences in reporting methodologies and portfolio composition. Investors should note that the USCS total portfolio figures encompass both securitized and non-securitized loans, while the Lending Trust data pertains specifically to securitized assets.

Key Highlights

  • 1American Express is voluntarily providing updated delinquency and write-off statistics for its U.S. Card Services (USCS) segment.
  • 2Total cardmember loans in the USCS portfolio remained relatively stable, growing slightly from $49.9 billion in June to $50.6 billion in August 2011.
  • 3The 30-day past due loan rate for the USCS total portfolio was consistently low, at 1.5% for June and July, and slightly improved to 1.4% in August 2011.
  • 4The net write-off rate for the USCS total portfolio, on a principal-only basis, was also stable, hovering around 2.7% to 2.8% during the reported months.
  • 5The filing clarifies that the USCS total portfolio includes both securitized and non-securitized loans, offering a broader view of credit performance than the Lending Trust data alone.
  • 6Data for the American Express Credit Account Master Trust shows an annualized default rate of 2.8% to 2.9% and a 30+ day delinquent amount of $0.5 billion across the reporting periods.
  • 7Differences in reporting periods and loan characteristics between the USCS total portfolio and the Lending Trust are noted, impacting direct month-to-month comparisons.

Frequently Asked Questions

The primary purpose of this 8-K filing is to provide investors with timely updates on the credit quality of American Express's U.S. Card Services (USCS) loan portfolio. It discloses delinquency and write-off statistics for the months of June, July, and August 2011, which are key indicators of credit risk.

No, they are not directly comparable. The USCS total portfolio includes both securitized and non-securitized loans, offering a comprehensive view. The American Express Credit Account Master Trust data specifically pertains to securitized assets. Differences in loan mix, vintage, calculation methodologies, and reporting periods can lead to variations in reported credit performance between the two datasets.

The reported rates suggest a relatively stable and healthy credit performance for the USCS portfolio during the specified period. The 30-day past due rate remained low (1.4%-1.5%), and the net write-off rate was consistent (2.7%-2.8%). These figures indicate that borrowers were generally meeting their payment obligations, and credit losses were contained within expected ranges.

This filing supplements information previously reported in the company's regular financial statements and other SEC filings, such as the Form 10-D for the Lending Trust. It provides more granular, monthly data on credit performance for the USCS segment, offering a near-real-time view of trends in loan quality.