8-KRegulation FD

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

Filed December 15, 2023For Securities:AXP

Summary

This 8-K filing by American Express (AXP) on December 15, 2023, provides updated delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios as of November 30, 2023, and for the months ended November 30, October 31, and September 30, 2023. Investors can use this information to monitor the credit quality of AXP's loan portfolios and assess potential credit risk. The filing also includes data on the American Express Credit Account Master Trust, offering a more granular view of securitized loan performance. Overall, the data suggests a relatively stable, albeit slightly increasing, trend in delinquencies and write-offs across both U.S. Consumer and U.S. Small Business portfolios in the period presented. Total loan balances in both segments saw a modest increase. While net write-off rates saw some fluctuation, they remained within a manageable range for the reported periods. The provided data on the securitized trust also indicates consistent annualized default rates.

Key Highlights

  • 1U.S. Consumer loan balances increased from $77.7 billion (Sept 30) to $81.3 billion (Nov 30).
  • 2U.S. Small Business loan balances increased from $25.2 billion (Sept 30) to $25.9 billion (Nov 30).
  • 330-day past due rate for U.S. Consumer loans remained steady at 1.3% in Sept/Oct, rising slightly to 1.4% in November.
  • 430-day past due rate for U.S. Small Business loans was stable at 1.2%-1.3% across the three months.
  • 5Net write-off rate for U.S. Consumer loans fluctuated between 1.7% and 1.9%.
  • 6Net write-off rate for U.S. Small Business loans increased from 1.7% in September to 2.0% in October and November.
  • 7The American Express Credit Account Master Trust reported a consistent annualized default rate of 1.2% (net of recoveries) across the three months.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide investors with updated information on the credit performance of American Express's U.S. Consumer and U.S. Small Business Card Member lending portfolios, specifically focusing on delinquency and net write-off rates for the months of September, October, and November 2023. It also includes data for the securitized American Express Credit Account Master Trust.

The data shows a slight uptick in the 30-day past due rate for U.S. Consumer loans from 1.3% to 1.4% by November 2023. The net write-off rate for U.S. Small Business loans increased from 1.7% to 2.0% between September and November. While these are modest increases, they indicate a slight deterioration in credit quality that investors should monitor. The U.S. Consumer net write-off rate remained relatively stable in this period.

The filing notes that the loan characteristics in the securitized trust may differ from the overall portfolios, leading to potential variations in reported credit performance. However, the annualized default rate for the American Express Credit Account Master Trust remained consistently at 1.2% (net of recoveries) for the reported months, suggesting stability in the performance of those specific securitized assets.

This metric indicates the rate at which the principal amount of loans is written off as uncollectible, excluding any associated interest or fees. This provides a clearer view of the actual loss on the core loan amount.