8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Feb 15, 2017)

Filed February 15, 2017For Securities:AXP

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 Card Member lending portfolios, as well as its securitized American Express Credit Account Master Trust. The report covers the periods ending November 30, December 31, 2016, and January 31, 2017. Investors can use this information to gauge the company's risk management and the health of its loan portfolios. Key metrics presented include total loans, 30-day past due rates, and net write-off rates. The data indicates relatively stable performance across these segments during the reporting period, with minor fluctuations. The filing also clarifies how these metrics differ from those reported by the Lending Trust, which may have different characteristics due to securitization.

Key Highlights

  • 1Provides delinquency and write-off statistics for U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios for November and December 2016, and January 2017.
  • 2USCS 30-day past due rate remained stable at 1.1% for November and December, increasing slightly to 1.2% in January 2017.
  • 3USCS net write-off rate (principal only) was consistently 1.5% across all three months.
  • 4U.S. Small Business 30-day past due rate also saw a slight increase from 1.1% to 1.2% over the period.
  • 5U.S. Small Business net write-off rate fluctuated, starting at 1.2%, rising to 1.6% in December, and settling at 1.4% in January 2017.
  • 6Total U.S. Consumer and Small Business loans were $56.1 billion, $58.2 billion, and $56.8 billion for the respective month-ends.
  • 7Presents data for the American Express Credit Account Master Trust, showing stable annualized default rates (net of recoveries) between 1.1% and 1.2%.

Frequently Asked Questions

American Express is reporting key credit performance indicators including total loan balances, the percentage of loans that are 30 days past due, and the net write-off rate (on a principal-only basis). These metrics are provided for both its U.S. Consumer Services and U.S. Small Business lending portfolios, as well as for the securitized American Express Credit Account Master Trust.

The reported data shows relatively stable credit performance. For the U.S. Consumer Services portfolio, the 30-day past due rate remained at 1.1% for November and December 2016, nudging up to 1.2% in January 2017, while the net write-off rate held steady at 1.5%. The U.S. Small Business portfolio saw a similar slight uptick in the 30-day past due rate to 1.2% by January 2017, with its net write-off rate showing a bit more fluctuation (1.2% to 1.6% and back to 1.4%). The securitized trust also reported stable default rates.

The filing clarifies that the Card Member loans securitized through the American Express Credit Account Master Trust may not have identical characteristics to the total U.S. Consumer Services or U.S. Small Business loan portfolios. Differences can arise from the mix, vintage, and aging of loans, as well as variations in how write-off statistics are calculated (e.g., using average loan balances for the total portfolio versus end-of-period principal for the trust). This distinction is important for understanding potential variations in reported credit performance.

Total U.S. Consumer and Small Business Card Member loans increased from $56.1 billion in November 2016 to $58.2 billion in December 2016, before decreasing slightly to $56.8 billion in January 2017. This indicates some fluctuation but overall a substantial portfolio size.