8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jun 15, 2022)

Filed June 15, 2022For Securities:AXP

Summary

This 8-K filing from American Express (AXP) provides updated delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ending May 31, April 30, and March 31, 2022. The report indicates stable credit performance across both portfolios during this period. Total outstanding U.S. Consumer Card Member loans increased from $59.1 billion in March to $62.9 billion in May, while U.S. Small Business loans grew from $18.1 billion to $19.0 billion over the same timeframe. Delinquency rates remained low and consistent, with 30-day past due percentages holding steady at 0.7% for U.S. Consumer and fluctuating slightly between 0.5% and 0.6% for U.S. Small Business. The net write-off rates, which exclude interest and fees, also showed resilience. For the U.S. Consumer portfolio, the rate was 0.9% for May and April, up slightly from 0.8% in March. The U.S. Small Business portfolio saw its net write-off rate at 0.7% in May and March, with a dip to 0.6% in April. The filing also includes separate data for the American Express Credit Account Master Trust (Lending Trust), which represents securitized assets. This data generally mirrors the stable trend observed in the broader portfolios, with annualized default rates remaining low.

Key Highlights

  • 1American Express (AXP) reported stable credit performance for its U.S. Consumer and U.S. Small Business Card Member lending portfolios.
  • 2Total U.S. Consumer loans grew to $62.9 billion as of May 31, 2022, up from $59.1 billion as of March 31, 2022.
  • 3Total U.S. Small Business loans increased to $19.0 billion as of May 31, 2022, up from $18.1 billion as of March 31, 2022.
  • 430-day past due delinquency rates remained low and consistent, at 0.7% for U.S. Consumer and between 0.5%-0.6% for U.S. Small Business.
  • 5Net write-off rates for the U.S. Consumer portfolio were stable at 0.9% in May and April, with a slight increase from 0.8% in March.
  • 6Net write-off rates for the U.S. Small Business portfolio were generally stable, ranging from 0.6% to 0.7%.
  • 7The filing also provides credit performance data for the American Express Credit Account Master Trust (Lending Trust), showing consistent low default rates.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide investors with updated statistics on delinquency and write-off rates for American Express's U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months of March, April, and May 2022. This information offers insight into the credit quality of the company's loan book.

The filing indicates stable credit performance. Delinquency rates (30 days past due) are low and consistent across both portfolios. Net write-off rates, which exclude interest and fees, also remain at manageable levels, showing only slight variations month-over-month.

The filing clarifies that the U.S. Consumer and U.S. Small Business Card Member loan portfolios include both securitized and non-securitized loans. The American Express Credit Account Master Trust (Lending Trust) data specifically relates to the securitized portion. The characteristics and credit performance of loans within the Lending Trust may differ from the broader portfolios due to factors like loan mix, vintage, aging, and specific calculation methodologies for write-off rates.

The filing shows an increase in total loan balances for both the U.S. Consumer and U.S. Small Business portfolios from March to May 2022. While loan growth is generally positive for revenue, investors will want to continue monitoring delinquency and write-off rates closely in conjunction with loan growth to ensure credit quality is maintained, especially in a potentially challenging economic environment.