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

The main purpose of this 8-K filing is to provide investors with current information on American Express's credit performance. It discloses updated statistics regarding loan delinquencies and net write-offs for its key U.S. lending portfolios (Consumer Services and Small Business) and for its securitized loan trust.

Are the delinquency and write-off rates presented in this filing for all of American Express's loans?

No, the filing clarifies that the statistics for the U.S. Consumer Services and U.S. Small Business Card Member loan portfolios include both securitized and non-securitized loans. However, the American Express Credit Account Master Trust statistics represent only the securitized portion of the loans and may have different characteristics and credit performance compared to the total portfolios.

What do the trends in these statistics suggest about American Express's credit quality?

The trends presented show a slight increase in 30-day delinquencies for both consumer and small business segments, and an increasing net write-off rate for the consumer segment in February. The default rate for the securitized trust also trended upwards. While these figures are still relatively low, investors should monitor these increasing trends as they could indicate a modest deterioration in credit quality or a normalization of loss rates after a period of strength.

How do the write-off rates presented differ from what might be reported elsewhere?

The filing specifies that the net write-off rate is based on 'principal only' and calculated using 'average loan balances over the reporting period' for the USCS and U.S. Small Business portfolios. This differs from how the write-off statistics might be calculated for the Lending Trust (e.g., using end-of-period principal balances and impacted by additions to the trust), meaning direct month-over-month comparisons between the total portfolios and the securitized trust require careful consideration of the calculation methodologies.

AXP 8-K: Regulation FD — Mar 15, 2017

Summary

This 8-K filing from American Express (AXP) provides updated delinquency and write-off statistics for its U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios, as well as the American Express Credit Account Master Trust, for the months of December 2016 through February 2017. These disclosures offer investors a timely look at the company's credit performance, which is a critical factor in assessing the health of its loan portfolios and the potential for future losses. The data indicates a slight uptick in 30-day past due rates for both USCS and U.S. Small Business portfolios in January and February 2017 compared to December 2016. Similarly, the net write-off rate for USCS increased in February, while the U.S. Small Business write-off rate saw a slight decrease in January before rising in February. The Credit Account Master Trust, which represents securitized loans, also shows a rising annualized default rate. Investors should monitor these trends as they provide an early indicator of credit quality within American Express's lending operations.

Key Highlights

1Disclosure of updated delinquency and write-off statistics for USCS and U.S. Small Business portfolios.
2Data covers the monthly periods ending December 31, 2016, January 31, 2017, and February 28, 2017.
3USCS 30-day past due loans as a percentage of total loans increased from 1.1% to 1.2% over the period.
4USCS net write-off rate (principal only) increased from 1.5% in December/January to 1.8% in February.
5U.S. Small Business 30-day past due loans as a percentage of total loans rose from 1.1% to 1.3% over the period.
6U.S. Small Business net write-off rate (principal only) fluctuated, ending at 1.5% in February.
7American Express Credit Account Master Trust shows an increasing annualized default rate, reaching 1.5% in February.

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

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Key Highlights

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