Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated August 15, 2018, provides Regulation FD disclosure regarding delinquency and write-off statistics. The report covers 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 May 31, June 30, and July 31, 2018. It also includes credit performance 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 (July 31, 2018): $55.3 billion
- Average Loans (July 2018): $55.0 billion
- 30 Days Past Due: 1.3% of total loans (consistent for May, June, and July)
- Net Write-off Rate (Principal Only): 2.2% (July), 2.0% (June), 2.2% (May)
U.S. Small Business Card Member Loans
- Total Loans (July 31, 2018): $11.6 billion
- Average Loans (July 2018): $11.6 billion
- 30 Days Past Due: 1.1% (July), 1.2% (June), 1.2% (May)
- Net Write-off Rate (Principal Only): 2.0% (July), 1.6% (June), 1.9% (May)
Combined U.S. Card Member Loans
- Total Loans (July 31, 2018): $66.9 billion
Lending Trust (Securitized Portfolio)
- Ending Principal Balance (July 31, 2018): $23.2 billion
- Annualized Default Rate (Net of Recoveries): 1.5% (July), 1.4% (June), 1.5% (May)
- Total 30+ Days Delinquent: $0.2 billion (consistent across all three months)
Material Changes
For the U.S. Consumer portfolio, total loans increased slightly from $54.4 billion in May to $55.3 billion in July. The net write-off rate fluctuated, rising from 2.0% in June to 2.2% in July, matching the May rate. Delinquency rates remained stable at 1.3% for all three months.
For the U.S. Small Business portfolio, total loans remained relatively flat between $11.6 billion and $11.7 billion. The net write-off rate increased from 1.6% in June to 2.0% in July. The 30-day past due rate improved slightly from 1.2% in May and June to 1.1% in July.
The Lending Trust showed a slight decline in ending principal balance from $23.4 billion in May to $23.2 billion in July, with the annualized default rate holding steady at 1.5% for May and July after a dip to 1.4% in June.
Guidance, Outlook, and Risks
This filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the standard disclosure context. The document 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).
Investor Verification Checklist
- Verify the trend in net write-off rates for both Consumer and Small Business segments, noting the increase in July for both.
- Confirm the stability of 30-day delinquency rates despite fluctuations in write-offs.
- Review the distinction between the total portfolio statistics and the Lending Trust (securitized) statistics to understand potential variances in credit quality reporting.
- Check subsequent Form 10-D filings for the Lending Trust to monitor the $0.2 billion in 30+ day delinquencies.