8-KRegulation FD

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

Filed July 17, 2017For Securities:AXP

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 for the periods ending April 30, May 31, and June 30, 2017, along with the three months ended June 30, 2017. The data offers a glimpse into the credit quality of Amex's loan portfolios, which is a key metric for investors evaluating the company's risk management and overall financial health. The report also includes similar statistics for the American Express Credit Account Master Trust, providing a comparative view of credit performance.

Key Highlights

  • 1U.S. Consumer Services (USCS) 30-day past due loan percentage remained stable at 1.1% for April, May, and June 2017.
  • 2U.S. Consumer Services (USCS) net write-off rate (principal only) showed a slight decrease to 1.7% in June 2017 from 1.8% in April and May.
  • 3U.S. Small Business Card Member loans showed a stable 30-day past due rate of 1.1% in May and June 2017.
  • 4U.S. Small Business Card Member loans experienced a slight increase in the net write-off rate to 1.6% in June 2017, compared to 1.5% in April and May.
  • 5Total U.S. Consumer and Small Business Card Member loans grew slightly from $57.5 billion in April to $58.5 billion by June 2017.
  • 6The American Express Credit Account Master Trust reported stable annualized default rates (net of recoveries) of 1.3% for May and June 2017.
  • 7Data provided is supplementary to the information reported in the Lending Trust's monthly Form 10-D filings.

Frequently Asked Questions

This report provides key credit performance indicators including '30 days past due loans as a % of total', 'Net write-off rate – principal only', and for the Lending Trust, 'Annualized default rate, net of recoveries'. These metrics help investors understand the level of credit risk within American Express's loan portfolios.

For the U.S. Consumer Services (USCS) portfolio, the 30-day past due rate remained consistently at 1.1% through April, May, and June 2017. For the U.S. Small Business portfolio, the 30-day past due rate was 1.2% in April and then stabilized at 1.1% for May and June 2017. These figures suggest a stable to slightly improving delinquency trend in the U.S. Small Business segment.

The 'Net write-off rate – principal only' indicates the percentage of the loan principal that has been written off as uncollectible, after accounting for any recoveries. A lower rate generally signifies better credit quality and lower losses for the company. For USCS, this rate slightly improved to 1.7% in June, while for U.S. Small Business, it edged up to 1.6% in June.

The company notes that the Card Member loans securitized through the Lending Trust may not have identical characteristics to the total USCS or U.S. Small Business loan portfolios. Differences in loan mix, vintage, aging, and calculation methodologies (e.g., average vs. end-of-period balances for write-offs) can lead to variations in reported credit performance between the total portfolio and the securitized trust.