Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on November 15, 2019, under Item 7.01 Regulation FD Disclosure. The report provides monthly delinquency and write-off statistics for the U.S. Consumer Card Member lending portfolio (Global Consumer Services Group) and the U.S. Small Business Card Member lending portfolio (Global Commercial Services operating segment) for the months ended August 31, September 30, and October 31, 2019.
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 | Oct 31, 2019 | Sep 30, 2019 | Aug 31, 2019 |
|---|---|---|---|
| U.S. Consumer Card Member Loans | |||
| Total Loans ($ Billions) | $60.0 | $59.7 | $59.9 |
| 30+ Days Past Due (%) | 1.6% | 1.5% | 1.5% |
| Net Write-off Rate (%) | 2.3% | 2.0% | 2.3% |
| U.S. Small Business Card Member Loans | |||
| Total Loans ($ Billions) | $13.7 | $13.4 | $13.4 |
| 30+ Days Past Due (%) | 1.3% | 1.3% | 1.2% |
| Net Write-off Rate (%) | 1.9% | 1.7% | 1.9% |
| Total Card Member Loans (Consumer + Small Business) | |||
| Total Loans ($ Billions) | $73.7 | $73.2 | $73.3 |
American Express Credit Account Master Trust (Lending Trust) Metrics:
- Ending Total Principal Balance: $30.1 billion (Oct 2019), $30.1 billion (Sep 2019), $30.4 billion (Aug 2019).
- Annualized Default Rate (net of recoveries): 1.5% (Oct 2019), 1.5% (Sep 2019), 1.6% (Aug 2019).
- Total 30+ Days Delinquent: $0.3 billion for all three months.
Material Changes Versus Prior Period
Comparing October 2019 to September 2019:
- U.S. Consumer Portfolio: Total loans increased by $0.3 billion. The 30+ days past due rate increased from 1.5% to 1.6%. The net write-off rate increased from 2.0% to 2.3%.
- U.S. Small Business Portfolio: Total loans increased by $0.3 billion. The 30+ days past due rate remained stable at 1.3%. The net write-off rate increased from 1.7% to 1.9%.
- Lending Trust: The annualized default rate improved slightly from 1.6% in August to 1.5% in September and October. The ending principal balance decreased slightly from August to September but stabilized in October.
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. However, the text notes that the credit performance of the Lending Trust may differ month-to-month 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
- Verify the trend in net write-off rates for both Consumer and Small Business segments, which rose in October 2019 compared to September.
- Confirm the distinction between the total portfolio statistics reported here and the securitized portfolio statistics reported in the Lending Trust's Form 10-D.
- Monitor the 30+ days past due rate for the U.S. Consumer portfolio, which ticked up to 1.6% in October.
- Note that the Lending Trust's annualized default rate stabilized at 1.5% for the last two months reported.