Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated January 15, 2019, serves as a Regulation FD disclosure. It provides preliminary 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 October 31, November 30, and December 31, 2018, as well as the three-month period ended December 31, 2018.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Dec 31, 2018): $59.9 billion
- Average Loans (Q4 2018): $57.8 billion
- 30+ Days Past Due: 1.4% (consistent across Oct, Nov, and Dec 2018)
- Net Write-off Rate (Principal Only): 2.2% for December 2018; 2.1% for the three months ended December 31, 2018.
U.S. Small Business Card Member Loans
- Total Loans (Dec 31, 2018): $12.1 billion
- Average Loans (Q4 2018): $12.1 billion
- 30+ Days Past Due: 1.3% for December 2018 (up from 1.2% in Oct and Nov).
- Net Write-off Rate (Principal Only): 1.7% for December 2018; 1.6% for the three months ended December 31, 2018.
Combined U.S. Card Member Loans
- Total Loans (Dec 31, 2018): $72.0 billion
American Express Credit Account Master Trust (Lending Trust)
- Ending Principal Balance (Dec 2018): $32.2 billion
- Annualized Default Rate (Net of Recoveries): 1.1% for December 2018
- Total 30+ Days Delinquent: $0.3 billion for December 2018
Material Changes
For the U.S. Consumer portfolio, the 30+ days past due rate remained stable at 1.4% throughout the fourth quarter, while the net write-off rate increased slightly from 2.0% in October and November to 2.2% in December. In the U.S. Small Business portfolio, the 30+ days past due rate ticked up to 1.3% in December from 1.2% in the prior two months, and the net write-off rate rose to 1.7% in December from 1.6% previously. Total loan balances for both segments showed growth from October to December 2018.
Outlook, Risks, and Unusual Items
The filing notes that the credit performance of the Lending Trust may differ from the total U.S. Consumer and Small Business portfolios due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances). The Lending Trust data reflects an acquisition of approximately $8 billion of receivables on October 1, 2018. The filing does not provide forward-looking guidance, management commentary on future risks, or specific contingencies beyond the statistical disclosure.
Investor Verification Checklist
- Verify the trend in net write-off rates for the U.S. Consumer portfolio, which rose to 2.2% in December.
- Confirm the slight increase in delinquency rates for the U.S. Small Business segment in December.
- Review the distinction between the total portfolio statistics and the Lending Trust statistics, noting the impact of the $8 billion receivable acquisition in October 2018.
- Check subsequent filings for finalized Q4 2018 earnings to compare against these preliminary statistics.