8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Mar 15, 2023)

Filed March 15, 2023For Securities:AXP

Summary

This 8-K filing from American Express Co. provides updated delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios as of and for the months ending February 28, 2023, January 31, 2023, and December 31, 2022. The data offers investors a near real-time look at the credit quality of the company's loan book, supplementing the more formal disclosures made through the American Express Credit Account Master Trust. Key metrics such as 30-day delinquency rates and net write-off rates are presented. While the overall loan balances have seen a slight decrease in the U.S. Consumer portfolio, and a slight increase in the U.S. Small Business portfolio, the delinquency rates remain relatively stable, with a minor uptick observed in the U.S. Small Business segment. The net write-off rates show some fluctuation but remain within a manageable range, indicating a generally stable credit environment for American Express's core lending operations.

Key Highlights

  • 1U.S. Consumer Card Member total loans decreased from $72.7 billion in December 2022 to $70.7 billion in February 2023.
  • 2U.S. Small Business Card Member total loans increased from $21.4 billion in December 2022 to $22.0 billion in February 2023.
  • 330-day past due rate for U.S. Consumer loans remained stable at 1.0% for January and December 2022, increasing slightly to 1.1% in February 2023.
  • 430-day past due rate for U.S. Small Business loans increased from 0.9% in December 2022 to 1.1% in February 2023.
  • 5Net write-off rate for U.S. Consumer loans saw a dip in January 2023 (1.5%) and February 2023 (1.4%) compared to December 2022 (1.2%). Note: Data indicates a decrease in write-offs, which is favorable.
  • 6Net write-off rate for U.S. Small Business loans was 1.0% in December 2022, 1.2% in January 2023, and 1.1% in February 2023.
  • 7The filing clarifies that the securitized loans in the Lending Trust may have different characteristics than the total portfolios, affecting reported credit performance metrics.

Frequently Asked Questions

This filing provides data on total loans, 30-day past due loan percentages, and net write-off rates (principal only) for American Express's U.S. Consumer and U.S. Small Business Card Member lending portfolios. It also includes similar metrics for the American Express Credit Account Master Trust.

The 30-day delinquency rate for U.S. Consumer loans remained steady at 1.0% for December 2022 and January 2023, then slightly increased to 1.1% by February 2023. For U.S. Small Business loans, the rate rose from 0.9% in December 2022 to 1.0% in January 2023 and further to 1.1% in February 2023.

For U.S. Consumer loans, the net write-off rate (principal only) was 1.2% in December 2022, increased to 1.5% in January 2023, and then decreased to 1.4% in February 2023. For U.S. Small Business loans, the rate was 1.0% in December 2022, increased to 1.2% in January 2023, and then slightly decreased to 1.1% in February 2023. These figures indicate some fluctuation but generally stable credit performance.

The company states that the securitized loans within the American Express Credit Account Master Trust (Lending Trust) may not have identical characteristics to the total U.S. Consumer or U.S. Small Business Card Member loan portfolios. Differences in loan mix, vintage, aging, and calculation methodologies (e.g., using end-of-period principal balance vs. average loan balance for write-offs) can lead to variations in reported credit performance between the two sets of data.