8-KRegulation FD

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

Filed April 15, 2020For Securities:AXP

Summary

This 8-K filing from American Express (AXP) on April 15, 2020, provides preliminary credit performance statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the periods ending January 31, February 29, and March 31, 2020. The data reveals a slight increase in delinquency rates and net write-off rates in March 2020, particularly for the U.S. Consumer segment, which could signal early impacts of the evolving economic environment at the time. Despite the uptick in March, the overall credit metrics remain relatively stable when viewed over the three-month period. The filing also includes separate statistics for the American Express Credit Account Master Trust, which are presented to offer additional context, though they may not be directly comparable to the total portfolio due to differences in calculation methodologies and loan characteristics. Investors should monitor these trends closely for any sustained deterioration in credit quality as economic conditions evolve.

Key Highlights

  • 1Preliminary credit statistics for U.S. Consumer and U.S. Small Business card member loan portfolios for January, February, and March 2020.
  • 2U.S. Consumer 30-day past due loans increased to 1.7% in March 2020 from 1.6% in prior months.
  • 3U.S. Consumer net write-off rate increased to 2.8% in March 2020 from 2.6% in February and 2.3% in January.
  • 4U.S. Small Business 30-day past due loans remained stable at 1.4% in March 2020, up slightly from 1.3% in prior months.
  • 5U.S. Small Business net write-off rate increased to 2.0% in March 2020 from 1.9% in prior months.
  • 6Total U.S. Consumer and Small Business card member loans decreased to $69.0 billion in March 2020 from $74.0 billion in January 2020, reflecting a general trend of loan reduction.
  • 7Separate data for the American Express Credit Account Master Trust shows a slight increase in the annualized default rate to 2.0% in March 2020, with some fluctuations in prior months.

Frequently Asked Questions

The primary purpose of this 8-K filing is to furnish investors with preliminary, updated credit performance statistics for American Express's U.S. Consumer and U.S. Small Business card member loan portfolios for the months of January, February, and March 2020. This information is provided under Regulation FD to ensure timely and broad dissemination of material information.

For the U.S. Consumer portfolio, both the 30-day past due percentage and the net write-off rate saw a slight increase in March 2020 compared to January and February 2020. The U.S. Small Business portfolio also experienced a minor uptick in these metrics in March. This suggests a potential early indication of credit quality deterioration, possibly influenced by the economic conditions at the time.

The filing notes that the American Express Credit Account Master Trust statistics, while provided for additional context, may not be directly comparable to the total U.S. Consumer or U.S. Small Business loan portfolios. This is due to differences in loan characteristics, vintage, aging, and calculation methodologies (e.g., use of end-of-period versus average loan balances for write-off rates).

The credit statistics presented in this filing are explicitly labeled as 'Preliminary' for March 31, 2020, and for the three months ended March 31, 2020. This means that final figures may differ and will likely be reported in subsequent filings.