Summary
This 8-K filing from American Express (AXP) provides an update on credit performance metrics for its U.S. Consumer Services (USCS) and U.S. Small Business segments as of September 30, 2016, along with data for the preceding two months. The report indicates stable credit quality, with 30-day delinquency rates and net write-off rates remaining consistent across the observed periods. This information is crucial for investors as it offers a snapshot of the company's risk management and loan portfolio health in its core domestic lending operations. The filing also includes data on the American Express Credit Account Master Trust (Lending Trust), which represents securitized card member loans. While the statistics for the Lending Trust differ in calculation methodology, they generally show a consistent low annualized default rate and stable delinquency levels. Investors should note these distinctions in reporting when assessing overall credit risk and portfolio performance.
Key Highlights
- 1Stable 30-day delinquency rates of 1.1% for both U.S. Consumer Services and U.S. Small Business segments for the months ended July, August, and September 2016.
- 2Consistent net write-off rates (principal only) for USCS at 1.6% and for U.S. Small Business at 1.5%-1.6% during the observed three-month period.
- 3Total loans in USCS remained steady around $44.8 billion to $45.0 billion, while U.S. Small Business loans grew slightly from $8.7 billion to $9.0 billion by September 30, 2016.
- 4The report clarifies that securitized loans in the Lending Trust have different characteristics and reporting methodologies than the direct USCS and U.S. Small Business portfolios.
- 5The American Express Credit Account Master Trust demonstrated a consistently low annualized default rate of 1.0% net of recoveries for the three months ending September 30, 2016.
- 6Total delinquent loans (30+ days) in the Lending Trust remained stable at $0.2 billion across the reported months.