8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jan 17, 2017)

Filed January 17, 2017For Securities:AXP

Summary

This 8-K filing from American Express (AXP) on January 17, 2017, provides updated credit performance statistics for its U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios for the months of October, November, and December 2016, as well as the fourth quarter of 2016. The report highlights key metrics such as loan balances, delinquency rates (30 days past due), and net write-off rates. Investors can use this information to gauge the health of American Express's loan portfolios and assess potential credit risk. Overall, the data indicates stable credit performance during the reported periods, with 30-day delinquency rates remaining consistent at 1.1% across both USCS and U.S. Small Business portfolios. Net write-off rates also remained relatively stable, particularly for the USCS segment. The filing also provides supplementary data on the American Express Credit Account Master Trust, offering further insights into its credit performance and a comparison to the broader loan portfolios.

Key Highlights

  • 1Provides delinquency and write-off rate statistics for Q4 2016 and the months of October, November, and December 2016 for U.S. Consumer Services (USCS) and U.S. Small Business loan portfolios.
  • 2Total loans in the USCS portfolio grew from $45.5 billion in October to $48.8 billion in December 2016.
  • 3Total loans in the U.S. Small Business portfolio increased from $9.2 billion in October to $9.5 billion in December 2016.
  • 430-day past due loan rates remained consistent at 1.1% for both USCS and U.S. Small Business portfolios across all reported months.
  • 5Net write-off rate for USCS was stable at 1.5% for November and December 2016, and 1.6% for October.
  • 6Net write-off rate for U.S. Small Business fluctuated slightly, from 1.2% in November to 1.6% in December 2016, averaging 1.4% for the quarter.
  • 7Includes credit performance data for the American Express Credit Account Master Trust, showing stable annualized default rates of 1.1%.

Frequently Asked Questions

The primary purpose of this 8-K filing is to provide investors with updated statistics on credit performance, specifically delinquency and write-off rates, for American Express's U.S. Consumer Services and U.S. Small Business lending portfolios for the period ending December 31, 2016. This is a routine disclosure to keep stakeholders informed about the health of the company's loan book.

The filing indicates stable delinquency performance. The 30-day past due loan rate remained consistently at 1.1% for both the U.S. Consumer Services and U.S. Small Business portfolios throughout October, November, and December 2016. This suggests no significant deterioration in borrowers' ability to meet their payment obligations during this period.

For the U.S. Consumer Services portfolio, the net write-off rate was 1.5% for November and December 2016, slightly higher at 1.6% for October. For the U.S. Small Business portfolio, the rate was 1.2% in November, rising to 1.6% in December, with an average of 1.4% for the quarter. These rates are generally considered manageable for credit card portfolios, and the stability shown, particularly for the larger consumer segment, suggests controlled credit losses.

The filing notes that the loans securitized through the Lending Trust may have different characteristics than the total portfolios, leading to variations in reported credit performance. While the Lending Trust showed a consistent 1.1% annualized default rate, net of recoveries, the broader USCS and Small Business portfolios showed slightly different write-off rates. This highlights the importance of looking at both the securitized and non-securitized portions of the company's loan book for a complete picture.