8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Dec 16, 2013)

Filed December 16, 2013For Securities:AXP

Summary

American Express Company (AXP) filed an 8-K on December 15, 2013, to provide updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment. This filing offers investors a more granular look at the company's credit performance beyond what is typically reported. The data covers the months ending September 30, October 31, and November 30, 2013, and includes metrics for both the total USCS lending portfolio and the American Express Credit Account Master Trust.

Key Highlights

  • 1Total loans in the U.S. Card Services lending portfolio grew slightly from $54.5 billion in September to $55.6 billion in November 2013.
  • 2The 30-day past due rate for the U.S. Card Services portfolio remained stable at 1.1% throughout the three-month period.
  • 3The net write-off rate (principal only) for the U.S. Card Services portfolio was 1.6% in September, improved to 1.5% in October, and returned to 1.6% in November 2013.
  • 4The filing clarifies that USCS statistics include both securitized and non-securitized loans, providing a broader view than the securitized trust data alone.
  • 5Data for the American Express Credit Account Master Trust (focused on securitized loans) shows a stable annualized default rate of 1.6% for the periods ending in October and November 2013.
  • 6The 30+ days delinquent amount for the securitized trust was $0.4 billion in October and November 2013, up slightly from $0.3 billion in the prior period.
  • 7The company explicitly notes that the characteristics of loans in the securitized trust may differ from the total USCS portfolio, potentially leading to variations in reported credit performance.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide investors with more timely and detailed information regarding American Express's credit performance, specifically the delinquency and write-off rates for its U.S. Card Services lending portfolio, as well as for its securitized trust.

For the U.S. Card Services portfolio, the 30-day past due rate remained stable at 1.1% from September to November 2013. The net write-off rate (principal only) was 1.6% in September, dipped to 1.5% in October, and returned to 1.6% in November 2013, indicating relatively stable credit quality during this period.

No, they are not exactly the same. The U.S. Card Services statistics represent the total lending portfolio, including both securitized and non-securitized loans. The American Express Credit Account Master Trust statistics pertain specifically to securitized loans. The filing notes that differences in loan mix, vintage, and calculation methodologies can lead to variations in reported credit performance between the two data sets.

The total loan balance for the U.S. Card Services lending portfolio showed a modest increase, growing from $54.5 billion in September 2013 to $55.6 billion by the end of November 2013, suggesting continued loan growth.