8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (May 15, 2012)

Filed May 15, 2012For Securities:AXP

Summary

This 8-K filing from American Express Company (AXP) on May 15, 2012, provides updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for the months of February, March, and April 2012. The data offers investors a look into the credit quality of the company's loan portfolio. Notably, the 30-day past due loan rate remained stable at 1.3% for March and April, following a slight dip from 1.4% in February. The net write-off rate for principal only also held steady at 2.4% across all three months. Furthermore, the filing includes credit performance information for the American Express Credit Account Master Trust (Lending Trust) for its three most recent monthly reporting periods. While the USCS segment data shows stable credit metrics, the Lending Trust's annualized default rate fluctuated slightly between 2.5% and 2.7%. Investors should note that the USCS total portfolio statistics and the Lending Trust statistics are presented separately and may not be directly comparable due to differences in loan characteristics, reporting periods, and calculation methodologies.

Key Highlights

  • 1American Express is providing updated credit performance data for its U.S. Card Services segment for February, March, and April 2012.
  • 2The 30-day past due loan rate for the USCS segment remained stable at 1.3% in March and April 2012, after being 1.4% in February 2012.
  • 3The net write-off rate (principal only) for the USCS segment was consistently 2.4% for all three months reported.
  • 4Total cardmember loans in the USCS segment showed a slight increase, rising from $50.7 billion in February to $51.7 billion in April 2012.
  • 5The filing also provides credit performance data for the American Express Credit Account Master Trust.
  • 6The Lending Trust's annualized default rate (net of recoveries) varied slightly, ranging from 2.5% to 2.7% over the reporting periods.
  • 7The company clarifies that USCS total portfolio statistics and Lending Trust statistics may differ due to various factors, including loan mix and reporting mechanics.

Frequently Asked Questions

American Express is reporting delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment. Specifically, it provides data on total loans, 30-day past due loans as a percentage of total loans, and the net write-off rate (principal only). It also includes credit performance for the American Express Credit Account Master Trust, such as ending total principal balance, net defaulted amount, annualized default rate, and total 30+ days delinquent.

For the U.S. Card Services segment, the 30-day past due loan rate showed a slight improvement, moving from 1.4% in February 2012 to 1.3% in March and April 2012. The net write-off rate remained stable at 2.4% throughout the reported period. Total loans in this segment also saw a modest increase.

The filing explains that differences can arise due to several factors. These include variations in the mix and age of loans (e.g., a larger proportion of small business loans in the non-securitized portion of the total portfolio), differences in reporting periods (calendar month for USCS vs. specific monthly cycles for the Trust), and distinct calculation methodologies for write-off rates, particularly how average versus end-of-period balances are used.

Based on the provided data for February, March, and April 2012, the credit performance metrics for the USCS segment appear relatively stable. The 30-day delinquency rate held steady at 1.3% for the latter two months, and the write-off rate remained consistent at 2.4%. While the Lending Trust showed some fluctuation, the overall picture presented by this 8-K filing does not immediately suggest a significant deterioration in credit quality for American Express during this specific period.