What is the primary purpose of this 8-K filing?

The primary purpose of this 8-K filing is to furnish 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 ending May 31, April 30, and March 31, 2024. It provides a snapshot of credit performance in these key segments.

Are the credit metrics for the U.S. Consumer and Small Business portfolios showing significant deterioration?

Based on the data provided, there is no significant deterioration observed. Delinquency rates for the U.S. Consumer segment have slightly improved or remained stable, and the net write-off rate has also seen a slight decrease in May. For the U.S. Small Business segment, delinquency rates are stable, and while the write-off rate saw a minor increase in May, it remains within a historically manageable range. Overall credit quality appears to be holding steady.

How do the statistics for the American Express Credit Account Master Trust compare to the overall loan portfolios?

The filing notes that the American Express Credit Account Master Trust (which holds securitized loans) 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 can lead to variations in reported metrics month-to-month. However, the trust's stable annualized default rate of 1.4% for May aligns with the generally stable credit performance indicated by the broader portfolio statistics.

What is a 'Net write-off rate – principal only'?

The 'Net write-off rate – principal only' refers to the rate at which the principal amount of loans is written off as unrecoverable, after deducting any recoveries from previously written-off amounts. It specifically excludes interest and/or fees from the calculation, providing a focused view on the principal loss exposure.

AXP 8-K: Regulation FD — Jun 17, 2024

Summary

This 8-K filing from American Express (AXP) provides an update on delinquency and write-off rates for its U.S. Consumer and U.S. Small Business Card Member lending portfolios as of May 31, 2024, and the preceding two months. The report indicates a stable to slightly improving credit performance across these key segments. Total loans in the U.S. Consumer portfolio grew to $84.0 billion, with 30-day delinquencies holding steady at 1.3% in May. The net write-off rate for U.S. Consumer loans saw a slight decrease to 2.4% in May from 2.5% in April. For the U.S. Small Business portfolio, total loans reached $28.2 billion, with 30-day delinquencies remaining stable at 1.4%. The net write-off rate for Small Business loans saw a modest increase to 2.5% in May from 2.2% in April. Additionally, the filing includes data on the American Express Credit Account Master Trust, which consists of securitized loans. This trust reported an annualized default rate, net of recoveries, of 1.4% for May, consistent with previous months. While the securitized portfolio's performance metrics can differ from the overall loan portfolios due to various factors, the provided data suggests that American Express's overall loan book credit quality remains robust, with no significant deterioration observed.

Key Highlights

1U.S. Consumer Card Member total loans increased to $84.0 billion as of May 31, 2024.
2U.S. Consumer 30-day past due loans as a percentage of total loans decreased slightly to 1.3% in May 2024.
3U.S. Consumer net write-off rate (principal only) was 2.4% in May 2024, down from 2.5% in April 2024.
4U.S. Small Business Card Member total loans grew to $28.2 billion as of May 31, 2024.
5U.S. Small Business 30-day past due loans as a percentage of total loans remained stable at 1.4% in April and May 2024.
6U.S. Small Business net write-off rate (principal only) increased slightly to 2.5% in May 2024 from 2.2% in April 2024.
7The American Express Credit Account Master Trust reported a stable annualized default rate (net of recoveries) of 1.4% for May 2024.

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jun 17, 2024)

Summary

Key Highlights

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