Business Context and Reporting Period
This Form 8-K filing by American Express Company (the "Company") was submitted on March 15, 2019, under Item 7.01 Regulation FD Disclosure. The report provides 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) for the months ended February 28, 2019, January 31, 2019, and December 31, 2018.
Key Financial Metrics
The filing details credit performance metrics for total Card Member loans and the American Express Credit Account Master Trust (Lending Trust).
U.S. Consumer and Small Business Card Member Loans
| Metric | Feb 28, 2019 | Jan 31, 2019 | Dec 31, 2018 |
|---|---|---|---|
| Total Loans (Billions) | $69.2 | $70.5 | $72.0 |
| U.S. Consumer Total Loans (Billions) | $57.0 | $58.3 | $59.9 |
| U.S. Small Business Total Loans (Billions) | $12.2 | $12.2 | $12.1 |
| Consumer 30+ Days Past Due % | 1.5% | 1.5% | 1.4% |
| Small Business 30+ Days Past Due % | 1.3% | 1.3% | 1.3% |
| Consumer Net Write-off Rate (Principal) | 2.4% | 2.2% | 2.2% |
| Small Business Net Write-off Rate (Principal) | 1.9% | 1.8% | 1.7% |
American Express Credit Account Master Trust
| Metric | Feb 2019 | Jan 2019 | Dec 2018 |
|---|---|---|---|
| Ending Total Principal Balance (Billions) | $30.0 | $30.9 | $32.2 |
| Defaulted Amount (Billions) | $0.05 | $0.04 | $0.04 |
| Annualized Default Rate (Net of Recoveries) | 1.4% | 1.2% | 1.1% |
| Total 30+ Days Delinquent (Billions) | $0.3 | $0.3 | $0.3 |
Material Changes Versus Prior Period
- Loan Balances: Total Card Member loans declined from $72.0 billion in December 2018 to $69.2 billion in February 2019. U.S. Consumer loans decreased from $59.9 billion to $57.0 billion, while Small Business loans remained relatively stable at $12.2 billion.
- Delinquency: The 30+ days past due rate for U.S. Consumer loans increased slightly from 1.4% in December 2018 to 1.5% in February 2019. Small Business delinquency remained flat at 1.3%.
- Write-offs: Net write-off rates increased for both segments. U.S. Consumer rates rose from 2.2% to 2.4%, and Small Business rates rose from 1.7% to 1.9% over the same period.
- Lending Trust: The annualized default rate for the Lending Trust increased from 1.1% in December 2018 to 1.4% in February 2019.
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 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 net write-off rates for U.S. Consumer loans, which increased to 2.4% in February 2019.
- Confirm the decline in total loan balances across both Consumer and Small Business segments over the three-month period.
- Review the discrepancy between Lending Trust default rates (1.4%) and total portfolio write-off rates to understand securitization impacts.
- Monitor the stability of Small Business delinquency rates at 1.3% despite rising write-off rates.