What is the main purpose of this 8-K filing?

The primary purpose of this 8-K filing is to provide investors with updated, granular data on the credit performance, specifically delinquency and write-off rates, for American Express's U.S. Consumer Services and U.S. Small Business loan portfolios that are held for investment. This information is furnished voluntarily to offer transparency beyond standard financial reporting.

Are the delinquency and write-off rates presented in this filing comparable to the rates reported by the American Express Credit Account Master Trust?

No, American Express explicitly states that the statistics presented for its U.S. Consumer and Small Business segments are not directly comparable to the data reported by the American Express Credit Account Master Trust. This is due to differences in loan characteristics, the mix and vintage of loans, and variations in how write-off rates are calculated (e.g., principal only vs. principal and interest, use of average vs. end-of-period balances).

What is the trend observed in the delinquency and write-off rates for the reported periods?

For the months of June, July, and August 2016, the 30-day delinquency rates for both the U.S. Consumer Services and U.S. Small Business segments remained stable at 1.1%. However, the net write-off rates (principal only) showed a modest upward trend, increasing from 1.3%-1.2% in June to 1.6% in August for both segments. This indicates a slight deterioration in credit quality during the period.

What are the 'adjusted' non-GAAP measures mentioned in the filing?

The 'adjusted' measures exclude the impact of Card Member loans that were reclassified from 'held for sale' to 'held for investment'. By excluding these reclassified loans, the company aims to present a clearer view of the underlying credit performance trends for its core portfolios. For August 31, 2016, the adjusted 30-day delinquency rate was 1.0% and the adjusted net write-off rate was 1.4% for both segments.

AXP 8-K: Regulation FD — Sep 15, 2016

Summary

This 8-K filing by American Express Co. (AXP) on September 15, 2016, provides updated delinquency and write-off statistics for its U.S. Consumer Services (USCS) and U.S. Small Business operating segments for the months ending June 30, July 31, and August 31, 2016. The report primarily aims to offer transparency on credit performance metrics for loans held for investment. Investors should note that these figures are distinct from those reported by the American Express Credit Account Master Trust, which has different loan characteristics and reporting methodologies. Overall, the provided data indicates stable to slightly increasing delinquency and write-off rates across both USCS and U.S. Small Business segments during the period. While the absolute figures remain at levels that suggest manageable credit risk, any upward trend warrants attention. The company also provides adjusted, non-GAAP measures for these statistics, excluding certain loan reclassifications, to offer a clearer view of underlying performance. The filing also includes separate credit performance data for the American Express Credit Account Master Trust, noting the impact of portfolio sales and loan acquisitions on its reported metrics.

Key Highlights

1American Express is providing updated credit performance data for its U.S. Consumer Services and U.S. Small Business loan portfolios held for investment.
2The data covers delinquency (30 days past due) and net write-off rates for the months of June, July, and August 2016.
3For the U.S. Consumer Services segment, 30-day delinquency remained stable at 1.1%, while net write-off rates increased from 1.3% in June to 1.6% in August.
4For the U.S. Small Business segment, 30-day delinquency also remained stable at 1.1%, with net write-off rates increasing from 1.2% in June to 1.6% in August.
5Total loans held for investment for both segments combined grew from $53.2 billion to $53.8 billion over the three-month period.
6The filing clarifies that these statistics differ from those reported by the American Express Credit Account Master Trust due to variations in loan characteristics and calculation methodologies.
7Adjusted, non-GAAP delinquency and write-off rates are provided, excluding the impact of reclassified loans, showing a slightly more stable trend.

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

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