8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Apr 17, 2023)

Filed April 17, 2023For Securities:AXP

Summary

This 8-K filing from American Express Company (AXP) provides updated preliminary statistics on delinquency and write-off rates for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the three months ended March 31, 2023. The report offers a granular look at credit performance, which is supplementary to the data reported in the company's Securitized Trust 10-D filings. Investors can use this information to gauge the health of AXP's loan portfolios and the company's risk management effectiveness. Key takeaways indicate a relatively stable credit environment for AXP's U.S. Card Member loans during the first quarter of 2023. Delinquency and write-off rates remained within expected ranges, suggesting that the company's underwriting and collection efforts are effectively managing potential credit risks. The data also includes details on the performance of the American Express Credit Account Master Trust, providing further insight into the securitized portion of the company's loan book.

Key Highlights

  • 1Preliminary delinquency rates for U.S. Consumer and U.S. Small Business card member loans remained stable at 1.1% for 30 days past due as of March 31, 2023.
  • 2Net write-off rates for U.S. Consumer loans were 1.7% in March 2023, up slightly from 1.4% in February 2023, but averaged 1.5% for the first quarter.
  • 3Net write-off rates for U.S. Small Business loans were 1.4% in March 2023, up from 1.1% in February 2023, averaging 1.2% for the first quarter.
  • 4Total U.S. Consumer and Small Business Card Member loans stood at $95.0 billion as of March 31, 2023.
  • 5The American Express Credit Account Master Trust reported an annualized default rate, net of recoveries, of 1.1% for the month ended March 31, 2023.
  • 6The filing clarifies that the data provided is supplementary to Form 10-D filings and may differ due to variations in loan characteristics and calculation methodologies.

Frequently Asked Questions

The primary purpose of this 8-K filing is to provide investors with preliminary, supplemental 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 January, February, and March 2023, as well as for the first quarter of 2023. This offers a more immediate look at credit performance than standard quarterly reports.

The rates have been relatively stable. The 30-day past due rate remained at 1.1% for both U.S. Consumer and U.S. Small Business loans as of March 31, 2023. Net write-off rates saw a slight uptick in March compared to February but averaged 1.5% for Consumer and 1.2% for Small Business loans for the first quarter, indicating a manageable credit environment.

The filing notes that the Card Member loans securitized through the American Express Credit Account Master Trust (reported in 10-D filings) may have different characteristics than the total U.S. Consumer or U.S. Small Business loan portfolios. Differences can arise from loan mix, vintage, aging, and calculation methodologies (e.g., using average loan balances vs. end-of-period balances for write-offs). Therefore, the performance reported in the 10-D may differ from the overall portfolio statistics presented in this 8-K.

As of March 31, 2023, the total U.S. Consumer Card Member loans were $71.9 billion, and U.S. Small Business Card Member loans were $23.0 billion, bringing the combined total to $95.0 billion.