Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated July 17, 2017, serves as a Regulation FD disclosure. It provides delinquency and write-off statistics for the U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios for the months ended April 30, May 31, and June 30, 2017, as well as the three-month period ended June 30, 2017.
Key Financial Metrics
The filing details credit performance metrics for Card Member loans, distinguishing between total portfolio data and data for the American Express Credit Account Master Trust (Lending Trust).
USCS and U.S. Small Business Card Member Loans (Total Portfolio)
| Metric | April 30, 2017 | May 31, 2017 | June 30, 2017 (Preliminary) | Three Months Ended June 30, 2017 |
|---|---|---|---|---|
| Total Loans (Billions) | $57.5 | $58.5 | $58.5 | $58.5 |
| USCS Total Loans (Billions) | $47.5 | $48.4 | $48.3 | $48.3 |
| USCS 30+ Days Past Due % | 1.1% | 1.1% | 1.1% | 1.1% |
| USCS Net Write-off Rate % | 1.8% | 1.8% | 1.7% | 1.8% |
| Small Business Total Loans (Billions) | $10.1 | $10.1 | $10.2 | $10.2 |
| Small Business 30+ Days Past Due % | 1.2% | 1.1% | 1.1% | 1.1% |
| Small Business Net Write-off Rate % | 1.5% | 1.5% | 1.6% | 1.5% |
American Express Credit Account Master Trust (Lending Trust)
| Metric | April 2017 | May 2017 | June 2017 |
|---|---|---|---|
| Ending Total Principal Balance (Billions) | $23.9 | $24.1 | $23.8 |
| Defaulted Amount (Billions) | $0.04 | $0.04 | $0.04 |
| Annualized Default Rate (Net of Recoveries) | 1.5% | 1.3% | 1.3% |
| Total 30+ Days Delinquent (Billions) | $0.2 | $0.2 | $0.2 |
Material Changes
From April to June 2017, total U.S. Consumer and Small Business Card Member loans increased from $57.5 billion to $58.5 billion. The USCS net write-off rate improved slightly in June to 1.7% from 1.8% in the prior two months, while the Small Business net write-off rate increased to 1.6% in June from 1.5%. Delinquency rates (30+ days past due) remained stable at 1.1% for both segments in June.
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. It notes that the Lending Trust statistics may differ 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 preliminary nature of the June 30, 2017 data points.
- Confirm the distinction between the total portfolio statistics and the securitized Lending Trust statistics, as they utilize different calculation methodologies.
- Monitor the slight divergence in write-off trends between the USCS segment (improving in June) and the Small Business segment (worsening in June).
- Review the corresponding Form 10-D filings for the Lending Trust for granular securitization data.