Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on March 15, 2024, under Item 7.01 (Regulation FD Disclosure). The report provides delinquency and write-off statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended February 29, 2024, January 31, 2024, and December 31, 2023. It also includes credit performance data for the American Express Credit Account Master Trust (Lending Trust) for the same periods.
Key Financial Metrics
U.S. Consumer and Small Business Card Member Loans (Billions, except percentages):
- Total Loans (Feb 2024): $107.0 billion (Consumer: $80.4B; Small Business: $26.5B).
- 30+ Days Past Due (Feb 2024): 1.5% for both Consumer and Small Business portfolios.
- Net Write-off Rate (Principal Only, Feb 2024): 2.4% for Consumer; 2.3% for Small Business.
Lending Trust Performance (Billions, except percentages):
- Ending Principal Balance (Feb 2024): $25.4 billion.
- Annualized Default Rate (Feb 2024): 1.7%.
- Defaulted Amount (Feb 2024): $0.05 billion.
Material Changes vs. Prior Period
Loan Balances: Total Card Member loans decreased from $109.0 billion in December 2023 to $107.0 billion in February 2024. Consumer loans declined from $83.2 billion to $80.4 billion, while Small Business loans increased from $25.8 billion to $26.5 billion.
Credit Quality: The 30+ days past due rate for both Consumer and Small Business portfolios increased slightly from 1.4% in December 2023 to 1.5% in January and February 2024.
Write-offs: The Consumer net write-off rate rose to 2.4% in February 2024 from 2.1% in January 2024, though it remains below the 2.5% rate recorded in December 2023. The Small Business write-off rate increased to 2.3% in February from 2.1% in January.
Lending Trust: The annualized default rate for the Lending Trust increased to 1.7% in February 2024 from 1.3% in January 2024 and 1.5% in December 2023.
Management Commentary and Unusual Items
The filing notes that the December 2023 Consumer write-off rate of 2.5% was influenced by the timing of the Thanksgiving holiday, which delayed the receipt of certain debt settlement agreements. These settlements were operationally processed as write-offs in December 2023.
Management clarifies that the statistics for the total U.S. Consumer and Small Business portfolios differ from the Lending Trust data due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Investor Verification Checklist
- Verify the trend in net write-off rates for the Consumer portfolio, noting the increase in February 2024 compared to January.
- Confirm the divergence between the Lending Trust default rate (1.7%) and the broader portfolio write-off rates (2.3%–2.4%).
- Review the impact of the December 2023 holiday timing on historical write-off comparisons.
- Monitor the slight increase in 30+ days past due rates (1.4% to 1.5%) across both Consumer and Small Business segments.