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

The primary purpose of this 8-K filing is to provide investors with supplemental, preliminary delinquency and write-off rate statistics for American Express's U.S. Consumer and U.S. Small Business card portfolios for the period leading up to and including December 31, 2019. This information is intended to offer additional insights into the credit performance of these key segments beyond what is reported in standard SEC filings.

How are the credit performance metrics for the total U.S. portfolios different from the securitized Lending Trust?

The filing notes that the Card Member loans securitized through the Lending Trust may not have identical characteristics to the total U.S. Consumer or U.S. Small Business loan portfolios. Differences can arise from factors such as loan mix, vintage, aging, and the specific methodologies used to calculate write-off statistics (e.g., using average loan balances for the total portfolio versus end-of-period principal balances for the Lending Trust).

What does the trend in net write-off rates suggest for American Express?

The net write-off rates for both U.S. Consumer and U.S. Small Business portfolios showed a slight upward trend from October to December 2019, moving from 2.3% to 2.5% for consumers and 1.9% to 2.1% for small businesses. While these increases are modest, investors will want to monitor this trend in subsequent filings to ensure it does not accelerate, as higher write-off rates can negatively impact profitability.

Are the loan portfolios growing?

Yes, the U.S. Consumer Card Member loan portfolio showed growth, with total loans increasing from $60.0 billion in October to $62.4 billion by December 31, 2019. The U.S. Small Business Card Member loan portfolio remained relatively stable during the same period, fluctuating slightly around $13.7 billion to $13.8 billion.

AXP 8-K: Regulation FD — Jan 15, 2020

Summary

This 8-K filing by American Express (AXP) provides preliminary delinquency and write-off rate statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios as of and for the months ended October 31, November 30, and December 31, 2019, as well as for the three months ended December 31, 2019. The data is presented to supplement information reported by the American Express Credit Account Master Trust (Lending Trust). Investors can use this information to assess the credit quality and potential risk within American Express's core lending operations. The reported statistics indicate stable credit performance across both the U.S. Consumer and U.S. Small Business segments during the period. Delinquency rates remained consistent, and net write-off rates showed only minor fluctuations. While the overall loan balances grew slightly in the consumer segment, the small business segment remained relatively stable. The company also provided data for its securitized Lending Trust, noting potential differences in calculation methodologies compared to the total portfolio data.

Key Highlights

1Preliminary delinquency and write-off statistics for U.S. Consumer and U.S. Small Business card portfolios for Oct-Dec 2019.
2U.S. Consumer Card Member loans: Total loans increased from $60.0B to $62.4B, while the 30-day past due rate remained stable at 1.6%.
3U.S. Consumer Card Member loans: Net write-off rate increased slightly from 2.3% to 2.5% over the three-month period.
4U.S. Small Business Card Member loans: Total loans remained stable around $13.7B-$13.8B.
5U.S. Small Business Card Member loans: 30-day past due rate remained stable at 1.3%.
6U.S. Small Business Card Member loans: Net write-off rate increased slightly from 1.9% to 2.1% over the three-month period.
7Information on the American Express Credit Account Master Trust shows annualized default rates and 30+ day delinquencies, with slight variations across reporting periods.

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jan 15, 2020)

Summary

Key Highlights

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