Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on August 16, 2021, under Item 7.01 Regulation FD Disclosure. The report provides monthly delinquency and write-off statistics for the U.S. Consumer Card Member and U.S. Small Business Card Member lending portfolios for the months ended May 31, June 30, and July 31, 2021.
Key Financial Metrics
The filing details credit performance metrics for total loans, delinquency rates, and net write-off rates (principal only) for the specified periods.
| Metric | July 31, 2021 | June 30, 2021 | May 31, 2021 |
|---|---|---|---|
| U.S. Consumer Card Member Loans | |||
| Total Loans ($ Billions) | $52.4 | $51.8 | $51.0 |
| 30+ Days Past Due (% of Total) | 0.6% | 0.6% | 0.7% |
| Net Write-off Rate (Principal Only) | 0.7% | 0.7% | 1.1% |
| U.S. Small Business Card Member Loans | |||
| Total Loans ($ Billions) | $14.7 | $14.5 | $14.2 |
| 30+ Days Past Due (% of Total) | 0.4% | 0.4% | 0.5% |
| Net Write-off Rate (Principal Only) | 0.5% | 0.6% | 0.6% |
| Total Card Member Loans (Consumer + Small Business) | |||
| Total Loans ($ Billions) | $67.1 | $66.2 | $65.3 |
American Express Credit Account Master Trust (Lending Trust) Metrics:
- Ending Total Principal Balance: $24.2 billion (July 2021), $24.2 billion (June 2021), $24.1 billion (May 2021).
- Annualized Default Rate (Net of Recoveries): 0.6% (July 2021), 0.6% (June 2021), 0.8% (May 2021).
- Total 30+ Days Delinquent: $0.1 billion for all three months.
Material Changes Versus Prior Period
From May to July 2021, the total loan balances for both U.S. Consumer and U.S. Small Business portfolios showed consistent growth. Credit quality metrics improved or stabilized during this period:
- Delinquency: The 30+ days past due ratio for U.S. Consumer loans decreased from 0.7% in May to 0.6% in June and July. Similarly, U.S. Small Business delinquency dropped from 0.5% in May to 0.4% in June and July.
- Write-offs: The net write-off rate for U.S. Consumer loans declined significantly from 1.1% in May to 0.7% in June and July. U.S. Small Business write-off rates improved from 0.6% in May and June to 0.5% in July.
- Lending Trust: The annualized default rate for the Lending Trust improved from 0.8% in May to 0.6% in June and July.
Guidance, Outlook, and Risks
This filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the disclosure of credit statistics. The document notes that the credit performance of the Lending Trust may differ from the total portfolio statistics due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Key Facts for Investor Verification
- Credit Quality Trend: Verify the continued improvement in net write-off rates and delinquency ratios for the U.S. Consumer and Small Business segments in subsequent monthly reports.
- Portfolio Growth: Confirm the trajectory of total loan balances, which increased by approximately $1.8 billion from May to July 2021.
- Securitization Impact: Understand the distinction between the reported portfolio statistics and the Lending Trust (securitized) statistics, as the latter may not reflect the full portfolio's risk profile.
- Calculation Methodology: Note that net write-off rates are based on principal only, excluding interest and fees.