8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Aug 16, 2021)

Filed August 16, 2021For Securities:AXP

Summary

This 8-K filing by American Express Co. (AXP) provides an update on key credit performance metrics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios as of July 31, 2021, and for the preceding two months. The information is presented to offer additional insights beyond the data reported in the American Express Credit Account Master Trust's Form 10-D filings. For investors, the most crucial takeaway is the stability and low levels of delinquency and net write-off rates across both the U.S. Consumer and U.S. Small Business segments. The data indicates a consistent and robust credit performance, with 30-day past due rates remaining very low (0.4%-0.7%) and net write-off rates showing a downward trend for the Consumer segment. This suggests effective credit risk management by American Express during the reporting period.

Key Highlights

  • 1U.S. Consumer Card Member loans showed a slight decrease in the net write-off rate from 1.1% in May to 0.7% in July 2021.
  • 230 days past due rates for U.S. Consumer Card Member loans remained stable at 0.6% for June and July, down from 0.7% in May.
  • 3U.S. Small Business Card Member loans maintained consistently low 30-day past due rates, at 0.4% for June and July, down from 0.5% in May.
  • 4Net write-off rates for U.S. Small Business Card Member loans were also stable and low, at 0.5% to 0.6% over the three-month period.
  • 5Total U.S. Consumer and Small Business Card Member loans increased from $65.3 billion in May to $67.1 billion in July 2021.
  • 6The American Express Credit Account Master Trust reported a consistent annualized default rate, net of recoveries, of 0.6% for June and July 2021, down from 0.8% in May.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide investors with updated delinquency and net write-off statistics for American Express's U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ending May 31, June 30, and July 31, 2021. This information is supplementary to data reported in the company's securitization trust filings.

The filing clarifies that the Card Member loans securitized through the Lending Trust may have different characteristics than the total U.S. Consumer or U.S. Small Business portfolios. Differences in loan mix, vintage, aging, and calculation methods (e.g., end-of-period balances vs. average balances for write-offs) can lead to variations in reported credit performance between the total portfolios and the securitized trust.

The provided statistics indicate strong credit performance. Both U.S. Consumer and U.S. Small Business segments show very low delinquency rates (30 days past due) and net write-off rates. The trend shows stability or improvement in these metrics during the reported period, suggesting effective credit risk management and resilient borrower repayment behavior.

The total loan balances for the combined U.S. Consumer and U.S. Small Business portfolios showed a modest increase, growing from $65.3 billion in May 2021 to $67.1 billion in July 2021, indicating continued growth in the company's lending activities.