Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on March 16, 2020, under Item 7.01 (Regulation FD Disclosure). The report provides supplemental credit performance statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended February 29, 2020, January 31, 2020, and December 31, 2019. It also includes data for the American Express Credit Account Master Trust (Lending Trust) for the same periods.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Feb 2020): $59.1 billion
- 30+ Days Past Due: 1.6% of total loans
- Average Loans (Feb 2020): $59.6 billion
- Net Write-off Rate (Feb 2020): 2.6% (principal only)
U.S. Small Business Card Member Loans
- Total Loans (Feb 2020): $14.0 billion
- 30+ Days Past Due: 1.3% of total loans
- Average Loans (Feb 2020): $13.9 billion
- Net Write-off Rate (Feb 2020): 1.9% (principal only)
Lending Trust (Securitized Portfolio)
- Ending Principal Balance (Feb 2020): $29.0 billion
- Annualized Default Rate (Feb 2020): 1.9%
- Total 30+ Days Delinquent: $0.3 billion
Material Changes Versus Prior Period
- Loan Balances: Total combined U.S. Consumer and Small Business loans decreased from $76.0 billion in December 2019 to $73.0 billion in February 2020.
- Consumer Write-offs: The net write-off rate for U.S. Consumer loans increased to 2.6% in February 2020, up from 2.3% in January 2020 and 2.5% in December 2019.
- Small Business Write-offs: The net write-off rate for U.S. Small Business loans improved to 1.9% in February 2020, down from 2.1% in December 2019.
- Delinquency: The 30+ days past due percentage remained stable at 1.6% for Consumer loans and 1.3% for Small Business loans across all three reported months.
Guidance, Outlook, and Risks
The 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 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 U.S. Consumer net write-off rates, which rose to 2.6% in February 2020.
- Confirm the decline in total loan balances for both Consumer and Small Business segments over the three-month period.
- Review the distinction between the reported portfolio statistics and the Lending Trust statistics to understand potential variances in securitized vs. non-securitized loan performance.
- Monitor subsequent filings for any acceleration in delinquency rates given the timing of this report (March 2020) relative to emerging economic conditions.