8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Aug 17, 2015)

Filed August 17, 2015For Securities:AXP

Summary

This 8-K filing from American Express Company (AXP) provides updated credit performance statistics for its U.S. Card Services (USCS) operating segment for the months ending May, June, and July 2015. The report focuses on delinquency and write-off rates for the Card Member lending portfolio. Investors should note that the presented data offers a more granular view of credit quality than what is typically seen in securitization trust reports, as it encompasses both securitized and non-securitized loans within the total USCS portfolio. Overall, the key metrics presented for the USCS total portfolio remained stable during the reported period. The 30 days past due loans as a percentage of total loans stayed constant at 0.9%, and the net write-off rate (principal only) remained at 1.3%. This stability suggests a consistent credit environment for American Express's U.S. card lending business during the second and third quarters of 2015, which is a positive indicator for asset quality.

Key Highlights

  • 1American Express provided updated delinquency and write-off statistics for its U.S. Card Services (USCS) operating segment for May, June, and July 2015.
  • 2The total loan balance for USCS Card Member lending remained relatively stable, hovering around $61.7 billion to $61.8 billion.
  • 3The 30-day delinquency rate for the USCS portfolio was consistently 0.9% across all three reported months.
  • 4The net write-off rate (principal only) for the USCS portfolio remained stable at 1.3% for May, June, and July 2015.
  • 5The filing clarifies that these statistics represent the total USCS portfolio, including both securitized and non-securitized loans, providing a broader view than securitization trust reports alone.
  • 6Data for the American Express Credit Account Master Trust (Lending Trust) was also provided, showing stable annualized default rates (net of recoveries) between 1.1% and 1.2% for the same periods.

Frequently Asked Questions

The primary purpose of this 8-K filing is to voluntarily disclose updated credit performance statistics, specifically delinquency and write-off rates, for American Express's U.S. Card Services (USCS) operating segment for the months of May, June, and July 2015. This provides investors with timely information on the credit quality of the company's loan portfolio.

The presented statistics indicate stability in credit performance. The 30-day delinquency rate remained constant at 0.9%, and the net write-off rate (principal only) stayed at 1.3% for the USCS total portfolio across the three reported months. This suggests no significant deterioration or improvement in credit quality during this period.

The USCS total portfolio data includes all Card Member loans within the USCS segment, encompassing both securitized and non-securitized loans. The American Express Credit Account Master Trust (Lending Trust) data pertains only to the loans that have been securitized. The filing notes that these two portfolios may have different characteristics (e.g., mix of loans, calculation methods), leading to potential differences in reported credit performance.

The stability of these credit metrics is generally viewed positively by investors as it suggests consistent risk management and a stable economic environment impacting American Express's core lending business. It indicates that the company is effectively managing its loan portfolio without a significant increase in defaults or delinquencies during the reporting period.