8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Oct 16, 2017)

Filed October 16, 2017For Securities:AXP

Summary

This 8-K filing from American Express (AXP) on October 16, 2017, provides updated credit performance statistics for its U.S. Consumer Services (USCS) and U.S. Small Business lending portfolios for the months of July, August, and September 2017, as well as the third quarter of 2017. The report details delinquency rates and net write-off rates, offering investors a snapshot of the company's credit quality trends during the period. Key takeaways suggest a stable to slightly improving credit environment. Delinquency rates remained consistent, and net write-off rates showed a slight decline, particularly for the U.S. Small Business segment. The filing also includes information on the American Express Credit Account Master Trust (Lending Trust), highlighting its credit performance, which appears consistent with the broader portfolios, though direct comparisons require understanding of differing calculation methodologies.

Key Highlights

  • 1Provides delinquency and net write-off statistics for U.S. Consumer Services (USCS) and U.S. Small Business portfolios for July, August, September 2017, and Q3 2017.
  • 2USCS 30-day past due rate remained stable at 1.2%-1.3% of total loans.
  • 3USCS net write-off rate decreased to 1.6% in September 2017, from 1.8% in previous months.
  • 4U.S. Small Business 30-day past due rate was consistently low at 1.1% of total loans.
  • 5U.S. Small Business net write-off rate showed a declining trend, reaching 1.4% in September 2017.
  • 6Total U.S. Consumer and Small Business loans stood at $59.9 billion as of September 30, 2017.
  • 7Includes credit performance data for the American Express Credit Account Master Trust (Lending Trust), showing stable annualized default rates.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide investors with current information on American Express's credit performance, specifically focusing on delinquency rates and net write-off rates for its U.S. Consumer Services and U.S. Small Business loan portfolios. This is furnished under Regulation FD to ensure fair disclosure of material information.

The reported credit metrics suggest a stable to slightly improving credit environment. The 30-day delinquency rates remained consistent and low. Notably, the net write-off rates for both the U.S. Consumer Services and U.S. Small Business segments showed a declining trend towards the end of the reported period (September 2017), indicating a reduction in loan losses relative to the portfolio size.

The filing clarifies that the statistics for the U.S. Consumer Services and U.S. Small Business portfolios include all securitized and non-securitized loans. In contrast, the American Express Credit Account Master Trust (Lending Trust) statistics pertain only to securitized loans. Differences in loan portfolio mix, vintage, aging, and calculation methodologies (e.g., using end-of-period principal vs. average loan balances for write-off rates) mean that the Lending Trust's performance may not perfectly mirror the company's total portfolios.

As of September 30, 2017, the total loans for the U.S. Consumer Services portfolio were $49.3 billion, and for the U.S. Small Business portfolio, they were $10.5 billion. This brings the combined total U.S. Consumer and Small Business Card Member loans to $59.9 billion.