8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Feb 18, 2020)

Filed February 18, 2020For Securities:AXP

Summary

This 8-K filing from American Express (AXP) on February 18, 2020, provides investors with updated delinquency and write-off statistics for key U.S. lending portfolios. The report focuses on the U.S. Consumer Card Member lending portfolio within the Global Consumer Services Group and the U.S. Small Business Card Member lending portfolio within Global Commercial Services, covering the months of November 2019, December 2019, and January 2020. The disclosed data indicates stable credit performance across these portfolios. Delinquency rates for both consumer and small business segments remained consistent at 1.6% and 1.3%, respectively. Net write-off rates also showed only minor fluctuations, suggesting a controlled credit environment for American Express during this period. The filing also provides supplementary information on the American Express Credit Account Master Trust, a securitized portfolio, noting differences in reporting metrics compared to the total loan portfolios.

Key Highlights

  • 1Stable 30-day delinquency rates: U.S. Consumer at 1.6% and U.S. Small Business at 1.3% for all reported months.
  • 2Slightly declining net write-off rates: U.S. Consumer from 2.5% to 2.3%, and U.S. Small Business from 2.1% to 1.9% between December 2019 and January 2020.
  • 3Total Card Member loans (U.S. Consumer and Small Business) were $74.0 billion as of January 31, 2020, down slightly from $76.0 billion as of December 31, 2019.
  • 4The filing provides data for both securitized and non-securitized loan portfolios, offering a comprehensive view.
  • 5Information on the American Express Credit Account Master Trust (securitized portfolio) shows consistent annualized default rates (net of recoveries) around 1.6%-1.7%.
  • 6Total loans in the U.S. Consumer segment decreased from $62.4 billion (Dec 2019) to $60.2 billion (Jan 2020).
  • 7Total loans in the U.S. Small Business segment remained stable around $13.7-$13.8 billion.

Frequently Asked Questions

The filing reports on 30-day past due loan percentages and net write-off rates (principal only) for both the U.S. Consumer and U.S. Small Business Card Member lending portfolios. It also includes data for the American Express Credit Account Master Trust, such as ending total principal balance and annualized default rates.

The delinquency rates have been consistently stable, with the U.S. Consumer portfolio at 1.6% and the U.S. Small Business portfolio at 1.3% for all reported months. The net write-off rates show a slight downward trend from November 2019 to January 2020 for both segments, indicating stable or improving credit quality.

These figures represent specific U.S. lending portfolios: the U.S. Consumer Card Member lending portfolio and the U.S. Small Business Card Member lending portfolio. The filing clarifies that these include both securitized and non-securitized loans, and also provides separate, distinct data for the American Express Credit Account Master Trust, which is a securitized portfolio.

The data for the Lending Trust provides insights into a specific, securitized portion of American Express's loan portfolio. The company notes that this data may differ from the total portfolio statistics due to variations in loan mix, vintage, aging, and calculation methodologies. Consistent default rates in this trust further support the overall stable credit environment.