8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Jan 15, 2025)

Filed January 15, 2025For Securities:AXP

Summary

American Express Company (AXP) has filed an 8-K report detailing its U.S. Consumer and U.S. Small Business Card Member lending portfolio credit performance for the periods ending October 31, November 30, and December 31, 2024. The report includes preliminary delinquency and write-off statistics, providing investors with a timely look at credit trends. Notably, as of December 1, 2024, AXP reclassified $758 million of Card Member loans related to its Lowe's small business cobrand portfolio to 'held for sale,' meaning these loans are excluded from the presented 'held for investment' statistics for December 2024. The presented data indicates stable delinquency rates, with U.S. Consumer loans at 1.4% and U.S. Small Business loans at 1.5% for 30 days past due across the reported months. Net write-off rates remained relatively consistent, with the U.S. Consumer portfolio at 2.1% for the three months ended December 31, 2024, and the U.S. Small Business portfolio at 2.3% for the same period. The report also provides credit performance data for the American Express Credit Account Master Trust, which shows a slight decrease in annualized default rates, net of recoveries, from 1.5% in October to 1.2% in December 2024.

Key Highlights

  • 1Preliminary U.S. Consumer and Small Business loan delinquency rates remain stable, with 30-day past due rates at 1.4% and 1.5% respectively for December 2024.
  • 2Net write-off rates for the three months ended December 31, 2024, were 2.1% for U.S. Consumer loans and 2.3% for U.S. Small Business loans, showing relative consistency.
  • 3AXP reclassified $758 million of Lowe's cobrand small business loans to 'held for sale' as of December 1, 2024, removing them from the 'held for investment' portfolio presented in the data.
  • 4Total U.S. Consumer and Small Business Card Member loans (held for investment) grew to $122.2 billion as of December 31, 2024.
  • 5The American Express Credit Account Master Trust, a securitized portfolio, saw its annualized default rate (net of recoveries) decrease from 1.5% in October to 1.2% in December 2024.
  • 6The report clarifies that the credit performance of the Lending Trust may differ from the total U.S. Consumer/Small Business portfolios due to differences in loan characteristics and calculation methodologies.

Frequently Asked Questions

The reclassification of $758 million in Card Member loans related to the Lowe's small business cobrand portfolio to 'held for sale' means these loans are no longer part of the 'held for investment' portfolio that AXP is reporting credit statistics for. This impacts the size of the reported loan portfolios and ensures that the presented delinquency and write-off rates reflect only loans intended for long-term holding.

The reported rates show relative stability. The 30-day delinquency rates have remained consistent month-over-month. The net write-off rates for the three months ending December 31, 2024, are also within a narrow range compared to prior months presented, suggesting no significant deterioration in credit quality for these portfolios during this period.

The report highlights that the credit performance of the American Express Credit Account Master Trust (a securitized portfolio) can differ from the overall U.S. Consumer and U.S. Small Business portfolios. This is due to variations in loan characteristics, vintage, aging, and different calculation methods for write-off rates (e.g., average loan balances for the total portfolio vs. end-of-period balances for the trust). While the trust's annualized default rate showed a slight decrease, this may not directly reflect the performance of the entire AXP loan book.

The 'preliminary' nature of the statistics, particularly for December 2024, indicates that these figures are subject to minor adjustments as final data is compiled. Investors should view these as a strong indication of current credit trends rather than absolute, final numbers. The consistency across the presented months, however, provides a degree of confidence in the reported trends.