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

This 8-K filing is a Regulation FD disclosure that provides investors with preliminary delinquency and write-off statistics for American Express's U.S. Consumer Services and U.S. Small Business lending portfolios for the first quarter of 2018. It offers a more immediate look at credit performance beyond the company's regular financial reports.

Are the reported delinquency and write-off rates concerning for investors?

The rates reported are preliminary and provide a snapshot. The 30-day delinquency rates for both consumer and small business segments remained largely stable in the low 1% range. The slight increase in the USCS net write-off rate in March is noted, but the explanation of a timing shift in write-offs for February should be considered. Investors should monitor these trends in future earnings reports and compare them against historical performance and industry benchmarks.

How do these reported numbers differ from the data in the Lending Trust's 10-D filings?

The filing clarifies that the loan portfolios reported here (total USCS and U.S. Small Business) include both securitized and non-securitized loans, and may have different characteristics (e.g., mix, vintage, aging) compared to the loans held within the American Express Credit Account Master Trust (the Lending Trust). Additionally, the calculation methods for write-off rates differ (e.g., average vs. end-of-period principal balances), which can lead to variations in reported credit performance between the two sources.

What was the impact of the write-off timing shift mentioned?

The filing notes that some Card Member accounts that should have been written off in January 2018 were instead processed in February. This timing shift affected the reported net write-off rate by approximately 10 basis points between January and February for the USCS portfolio, meaning February's rate was artificially higher and January's was artificially lower than they would have been without the shift.

AXP 8-K: Regulation FD — Apr 16, 2018

Summary

This 8-K filing from American Express (AXP) provides a regulatory disclosure (Item 7.01) of preliminary delinquency and write-off statistics for its U.S. Consumer Services (USCS) and U.S. Small Business lending portfolios for the months ending January, February, and March 2018, as well as the first quarter of 2018. The report aims to offer additional insights into credit performance beyond what is reported in the company's securitized trust filings. Investors should note the slight uptick in the net write-off rate for the USCS portfolio in March 2018 to 2.2% from 1.7% in January, with a note indicating a timing shift in write-offs impacting February's rate. The U.S. Small Business portfolio showed a more stable write-off rate around 1.6%-1.8% for the quarter. While overall delinquency rates remained relatively flat at 1.3%-1.4% for 30 days past due, these preliminary figures offer an early look at credit trends that could influence future earnings and loan loss provisions.

Key Highlights

1Provides preliminary delinquency and write-off statistics for U.S. Consumer Services (USCS) and U.S. Small Business lending portfolios for Q1 2018.
2USCS 30-day past due rate remained stable at 1.4% across January, February, and March 2018.
3USCS net write-off rate for principal only increased to 2.2% in March 2018, up from 1.7% in January 2018.
4A portion of January's write-offs for USCS were shifted to February, impacting the reported rate for both months.
5U.S. Small Business 30-day past due rate fluctuated between 1.3% and 1.4%.
6U.S. Small Business net write-off rate for principal only averaged 1.6% for Q1 2018, with monthly rates ranging from 1.4% to 1.8%.
7Includes supplementary data on the American Express Credit Account Master Trust, detailing its default rates and delinquencies for comparison.

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Apr 16, 2018)

Summary

Key Highlights

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