8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Oct 17, 2011)

Filed October 17, 2011For Securities:AXP

Summary

This 8-K filing from American Express Company (AXP) provides an update on the credit performance of its U.S. Card Services (USCS) operating segment as of and for the months ending July, August, and September 2011, along with data for the third quarter of 2011. The report primarily focuses on delinquency and write-off rates for cardmember loans, offering preliminary figures that are crucial for investors to assess the company's risk profile and the health of its loan portfolio in the prevailing economic environment. Key metrics presented include total loans, 30-day past due loans as a percentage of total loans, and net write-off rates. The information is also supplemented with data from the American Express Credit Account Master Trust, providing a more granular view of securitized assets. Investors should pay close attention to trends in these credit metrics, as improvements or deteriorations can significantly impact the company's profitability and outlook.

Key Highlights

  • 1Preliminary delinquency and write-off statistics for American Express's U.S. Card Services (USCS) segment for July, August, and September 2011.
  • 2Total loans in the USCS portfolio remained relatively stable, ranging from $49.9 billion to $50.6 billion during the reporting period.
  • 3The 30-day past due loan rate for USCS was consistently around 1.4% to 1.5% across the three months.
  • 4The net write-off rate (principal only) for USCS showed a declining trend, decreasing from 2.8% in July to 2.3% in September, averaging 2.6% for the third quarter.
  • 5The filing also provides separate credit performance data for the American Express Credit Account Master Trust, showing a stable annualized default rate (net of recoveries) of 2.6% to 2.9%.
  • 6The report clarifies that USCS portfolio statistics include both securitized and non-securitized loans, while the Lending Trust data pertains specifically to securitized assets, which may have different characteristics and reporting mechanics.

Frequently Asked Questions

For the U.S. Card Services (USCS) segment, total loans were around $49.9 billion to $50.6 billion in Q3 2011. The 30-day past due rate was stable at 1.4%-1.5%. Encouragingly, the net write-off rate (principal only) showed improvement, decreasing from 2.8% in July to 2.3% in September, averaging 2.6% for the quarter.

No, the report provides statistics for the total USCS portfolio (including both securitized and non-securitized loans) and separate data for the American Express Credit Account Master Trust (which holds securitized loans). While related, these datasets may differ due to factors such as loan mix, vintage, and reporting methodologies, meaning the credit performance of the trust may not always mirror the total portfolio.

The net write-off rate for principal only in the USCS segment showed a positive trend during the period. It declined from 2.8% in July to 2.7% in August and further to 2.3% in September. This suggests improving credit quality or more effective collections within the portfolio during the third quarter of 2011.

The statistics are labeled 'Preliminary,' indicating that they are subject to final review and potential adjustments. While they offer timely insights into the company's credit portfolio health, investors should be aware that final reported numbers in subsequent filings might vary slightly. However, these preliminary figures are generally reliable for assessing short-term trends.