01—Abstract
Summary
Summary of the 8-K filed February 18, 2025. Cited figures are marked; the original filing is the authoritative source.
This 8-K filing from American Express (AXP) provides updated delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ending January 31, 2025, December 31, 2024, and November 30, 2024.
Notably, effective December 1, 2024, AXP reclassified $758 milliona of Card Member loans from its Lowe’s small business cobrand portfolio to loans held for sale, meaning these are no longer included in the "held for investment" statistics presented. This reclassification impacts the "Total loans" figures, particularly for the U.S. Small Business segment. The filing also includes credit performance data for the American Express Credit Account Master Trust, which represents securitized loans.
02—Key points
Key Highlights
- AXP is providing updated delinquency and net write-off rate data for its U.S. Consumer and U.S. Small Business lending portfolios.
- A significant reclassification of $758 million in Lowe's small business cobrand loans from "held for investment" to "held for sale" occurred on December 1, 2024, impacting reported loan balances.
- U.S. Consumer 30-day delinquencies remained stable at 1.4% for the reported periods.
- U.S. Small Business 30-day delinquencies saw a slight increase to 1.6% in January 2025 from 1.5% in prior months.
- Net write-off rates for U.S. Consumer loans increased slightly from 2.0% to 2.3% over the period.
- Net write-off rates for U.S. Small Business loans also saw a modest increase from 2.3% to 2.5%.
- The filing also discloses credit performance metrics for the American Express Credit Account Master Trust, which shows generally stable or improving annualized default rates.
03—Questions
Frequently Asked Questions
What is the impact of the $758 million reclassification on the reported loan figures?
The reclassification of $758 million of loans from "held for investment" to "held for sale" means these loans are no longer included in the delinquency and write-off statistics presented for the U.S. Consumer and U.S. Small Business portfolios. This will result in lower reported "Total loans" figures in the "held for investment" category for periods after December 1, 2024, specifically impacting the U.S. Small Business segment more directly due to the nature of the reclassified portfolio.
Are the delinquency and write-off rates presented for all of AXP's lending portfolio?
No, the statistics provided in the table are specifically for the U.S. Consumer and U.S. Small Business Card Member loans that are "held for investment." Loans that have been securitized through the Lending Trust or reclassified as "held for sale" are not included in these specific portfolio statistics, though separate data for the Lending Trust is provided.
What do the delinquency and write-off rates suggest about the credit quality of AXP's loan portfolios?
The U.S. Consumer portfolio shows stable 30-day delinquencies but a slight uptick in net write-off rates. The U.S. Small Business portfolio shows a minor increase in 30-day delinquencies and a corresponding rise in net write-off rates. While these rates are increasing, they remain within a range that suggests generally manageable credit quality, though investors should monitor these trends for any acceleration.
How does the data for the American Express Credit Account Master Trust compare to the main portfolio data?
The data for the Lending Trust (securitized loans) is presented separately. The Lending Trust's annualized default rates remained stable or improved slightly, showing 1.5%, 1.2%, and 1.3% for the most recent three periods. This contrasts slightly with the overall portfolio's net write-off rates, which saw a modest increase. Differences in loan mix, vintage, aging, and calculation methodologies between the total portfolio and the securitized trust can explain these variations.
04—Continue