Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated December 15, 2016, 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 loan portfolios for the months ended September 30, October 31, and November 30, 2016. The filing 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 Services (USCS) Card Member Loans
- Total Loans: Increased from $44.9 billion (Sept) to $46.7 billion (Nov).
- 30+ Days Past Due: Remained stable at 1.1% of total loans across all three months.
- Net Write-off Rate (Principal Only): Declined slightly from 1.6% in September and October to 1.5% in November.
U.S. Small Business Card Member Loans
- Total Loans: Increased from $9.0 billion (Sept) to $9.3 billion (Nov).
- 30+ Days Past Due: Remained stable at 1.1% of total loans across all three months.
- Net Write-off Rate (Principal Only): Improved from 1.6% in September to 1.5% in October, and further to 1.2% in November.
American Express Credit Account Master Trust (Lending Trust)
- Ending Total Principal Balance: Increased from $24.1 billion (Sept) to $24.5 billion (Nov).
- Annualized Default Rate (Net of Recoveries): Rose from 1.0% in September to 1.1% in October and November.
- Total 30+ Days Delinquent: Remained constant at $0.2 billion for all three months.
Material Changes
The primary material change observed is the improvement in net write-off rates for both USCS and U.S. Small Business portfolios in November 2016 compared to the prior two months. Specifically, the U.S. Small Business net write-off rate decreased by 40 basis points from September to November. Conversely, the Lending Trust saw a slight increase in its annualized default rate from 1.0% to 1.1% starting in October. Total loan balances for both USCS and Small Business segments showed consistent growth over the three-month period.
Guidance, Outlook, and Risks
This filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the disclosure of credit statistics. The document notes that the credit performance of the Lending Trust may differ from the USCS and Small Business portfolios due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., use of end-of-period balances versus average balances).
Investor Verification Checklist
- Verify the trend of improving net write-off rates in the U.S. Small Business segment (1.6% to 1.2%) to assess credit quality stability.
- Compare the Lending Trust's annualized default rate (1.1%) against the company's reported net write-off rates to understand the impact of securitization on reported metrics.
- Confirm that the 1.1% delinquency rate (30+ days past due) remains consistent across both consumer and small business segments.
- Review the attached Exhibit 99.1 for historical context on the HFS Portfolios (Costco and JetBlue cobrands) which are referenced but not detailed in the main text.