8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Oct 15, 2019)

Filed October 15, 2019For Securities:AXP

Summary

This 8-K filing by American Express (AXP) provides an update on the credit performance of its U.S. Consumer and U.S. Small Business Card Member loan portfolios for the periods ending July 31, August 31, and September 30, 2019, along with a three-month summary for the quarter ended September 30, 2019. The information is furnished to provide additional context beyond the data reported in the company's securitization trusts. Investors should note that the presented statistics are preliminary and cover both securitized and non-securitized loans, which may differ from the performance reported by specific trusts. Overall, the credit metrics presented for both the U.S. Consumer and U.S. Small Business segments appear stable and show only minor fluctuations. The 30-day delinquency rates remain low, and the net write-off rates are within historical norms, suggesting resilient credit quality in American Express's core lending portfolios despite the ongoing economic environment. The filing also includes credit performance data for the American Express Credit Account Master Trust, which generally aligns with the broader portfolio trends.

Key Highlights

  • 1Provides preliminary delinquency and write-off rate statistics for U.S. Consumer and U.S. Small Business Card Member loan portfolios as of and for the months ending July, August, and September 2019.
  • 2U.S. Consumer Card Member loans: Total loans stood at $59.7 billion as of September 30, 2019, with 30-day past due loans at 1.5% and a net write-off rate of 2.0% for the three months ended September 30, 2019.
  • 3U.S. Small Business Card Member loans: Total loans were $13.4 billion as of September 30, 2019, with 30-day past due loans at 1.3% and a net write-off rate of 1.7% for the three months ended September 30, 2019.
  • 4Overall U.S. Consumer and Small Business Card Member loans totaled $73.2 billion as of September 30, 2019.
  • 5Net write-off rates are based on principal only, excluding interest and/or fees.
  • 6Includes credit performance data for the American Express Credit Account Master Trust, showing a stable annualized default rate, net of recoveries, generally around 1.5% to 1.6% for the three months presented.
  • 7Highlights that the characteristics of loans within the Lending Trust may differ from the total U.S. Consumer or U.S. Small Business loan portfolios, potentially leading to variations in reported credit performance.

Frequently Asked Questions

The primary purpose of this 8-K filing is to furnish investors with updated, preliminary statistics on the credit performance of American Express's U.S. Consumer and U.S. Small Business Card Member lending portfolios for recent monthly periods (July, August, September 2019) and the third quarter of 2019. This information supplements disclosures made in other SEC filings, such as the 10-D reports related to securitization trusts.

The presented statistics show relatively stable credit performance for both U.S. Consumer and U.S. Small Business portfolios. For instance, the 30-day past due rate for U.S. Consumer loans remained at 1.5% for September 2019, and the net write-off rate was 2.0% for the third quarter. Similarly, U.S. Small Business delinquency and write-off rates remained consistent, indicating no significant deterioration in credit quality during the reported periods.

No, these statistics represent specific U.S. Consumer and U.S. Small Business Card Member loan portfolios. The filing explicitly states that Card Member loans securitized through the American Express Credit Account Master Trust do not possess identical characteristics to the total U.S. Consumer or U.S. Small Business loan portfolios. Therefore, the reported credit performance of the Lending Trust may differ from the overall portfolio performance due to factors like loan mix, vintage, and calculation methodologies.

'Net write-off rate – principal only' means that the calculation of write-offs only considers the principal amount of the loans that have defaulted and have not been recovered. It excludes any interest or fees that may have been accrued but not collected on those defaulted loans.