What is the main purpose of this filing?

The primary purpose of this 8-K filing is to provide investors with current, monthly updates on key credit performance metrics, specifically delinquency and write-off rates for American Express's U.S. Consumer Services and U.S. Small Business lending portfolios, as well as for the securitized loans in the American Express Credit Account Master Trust. This offers a more granular view of credit risk than standard quarterly reports.

What are the key credit performance indicators presented, and what is the trend observed?

The key indicators are the percentage of loans 30 days past due and the net write-off rate (principal only). For USCS, 30-day delinquencies remained stable at 1.4% in February, while the write-off rate increased to 2.2%. For U.S. Small Business, 30-day delinquencies saw a slight increase to 1.4%, and the write-off rate rose to 1.7%. These figures suggest a slight uptick in credit stress towards the end of the reporting period.

Why is there a mention of a shift in write-offs between January and February?

The company disclosed that a timing adjustment occurred where some accounts that were due to be written off in January were instead processed in February. This 'shifted' write-off affected the reported write-off rate by approximately 10 basis points, meaning the February rate was higher and the January rate was lower than they would have been without this administrative adjustment. Investors should consider this when comparing month-over-month write-off trends.

How does the data from the Lending Trust differ from the overall portfolio data?

The filing clarifies that the Card Member loans in the American Express Credit Account Master Trust (Lending Trust) do not have identical characteristics to the entire USCS or U.S. Small Business portfolios. Differences can arise from the mix, age, and vintage of loans, as well as variations in how write-off statistics are calculated (e.g., end-of-period principal balances for the Trust vs. average loan balances for the portfolios). Therefore, the credit performance reported for the Trust may differ from the overall portfolio's performance.

AXP 8-K: Regulation FD — Mar 15, 2018

Summary

This 8-K filing by American Express Company (AXP) provides updated delinquency and write-off statistics for its U.S. Consumer Services (USCS) and U.S. Small Business lending portfolios, as well as the American Express Credit Account Master Trust, for the periods ending December 31, 2017, and January 31 and February 28, 2018. The key takeaway for investors is the trend in credit quality metrics, which are crucial for assessing the company's risk exposure and the health of its loan portfolio. While specific figures fluctuate, the data offers a timely snapshot beyond regularly reported quarterly financials.

Key Highlights

1AXP is providing updated monthly credit performance data for its U.S. Consumer Services and U.S. Small Business lending portfolios.
2For U.S. Consumer Services, total loans stood at $52.1 billion as of February 28, 2018, with 30-day delinquencies at 1.4% and a net write-off rate of 2.2% for February.
3For U.S. Small Business, total loans were $10.9 billion as of February 28, 2018, with 30-day delinquencies at 1.4% and a net write-off rate of 1.7% for February.
4Total Card Member loans across both U.S. segments were $63.0 billion at the end of February 2018.
5A note indicates that certain Card Member accounts that should have been written off in January were shifted to February, impacting the write-off rate by approximately 10 basis points between those two months.
6The filing also includes data for the American Express Credit Account Master Trust, showing an ending principal balance of $23.2 billion and an annualized default rate of 1.8% for February 2018.

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Mar 15, 2018)

Summary

Key Highlights

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