8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Apr 15, 2016)

Filed April 15, 2016For Securities:AXP

Summary

This 8-K filing from American Express (AXP) on April 15, 2016, provides investors with updated statistics on delinquency and write-off rates for its U.S. Consumer Services (USCS) and U.S. Small Business segments for the periods ending January, February, and March 2016. These figures offer a snapshot of credit quality and potential loan losses for the company's core lending portfolios. Notably, the filing clarifies that certain card member loans related to co-brand partnerships with Costco and JetBlue have been reclassified to "held for sale" as of December 1, 2015, and are therefore excluded from the presented "held for investment" statistics. This distinction is important for investors to understand the composition of the reported loan portfolios and how these specific, significant partnerships are being accounted for.

Key Highlights

  • 1Provides delinquency and write-off statistics for USCS and U.S. Small Business Card Member loans held for investment for the months of January, February, and March 2016.
  • 2Delinquency rates (30+ days past due) for USCS remained stable at 1.0% for the period, while U.S. Small Business saw a slight increase to 1.1% in February before returning to 1.0%.
  • 3Net write-off rates for USCS were 1.4% in January and February, increasing to 1.5% in March. U.S. Small Business maintained a consistent 1.4% net write-off rate.
  • 4Total loans held for investment in USCS fluctuated slightly but ended March at $42.4 billion.
  • 5Total loans held for investment in U.S. Small Business increased to $8.3 billion by March 2016.
  • 6Loans related to Costco and JetBlue co-brand partnerships (HFS Portfolios) have been reclassified to 'held for sale' and are excluded from these 'held for investment' statistics.
  • 7Includes supplementary information on the American Express Credit Account Master Trust, showing annualized default rates and 30+ days delinquent amounts.

Frequently Asked Questions

The primary purpose of this 8-K filing is to furnish investors with current statistics on credit performance, specifically delinquency and write-off rates, for American Express's U.S. Consumer Services and U.S. Small Business loan portfolios held for investment, covering the period of January through March 2016.

The loans related to the Costco and JetBlue co-brand partnerships have been reclassified as 'held for sale' as of December 1, 2015. As these are no longer held for investment, they are excluded from the delinquency and write-off rate statistics presented in this filing.

For the USCS segment, the 30-day delinquency rate remained stable at 1.0%, but the net write-off rate saw a slight increase from 1.4% to 1.5% by March. For the U.S. Small Business segment, delinquency rates were stable around 1.0%-1.1%, and the net write-off rate remained consistent at 1.4% throughout the period. Overall, credit quality appears relatively stable, with minor upward pressure on write-offs in the consumer segment.

The data from the American Express Credit Account Master Trust provides additional context on securitized loan performance. While it may not have identical characteristics to the 'held for investment' portfolios, it offers insight into the company's broader credit exposure and trends in default rates and delinquencies within its securitized assets.