Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated July 15, 2015, provides Regulation FD disclosure regarding delinquency and write-off statistics for the U.S. Card Services (USCS) operating segment. The data covers the months ended April 30, May 31, and June 30, 2015, as well as the three-month period ended June 30, 2015.
Key Financial Metrics
U.S. Card Services (USCS) Portfolio
| Metric | April 30, 2015 | May 31, 2015 | June 30, 2015 (Preliminary) | Three Months Ended June 30, 2015 |
|---|---|---|---|---|
| Total Loans ($ Billions) | $60.3 | $61.8 | $61.7 | $61.7 |
| 30+ Days Past Due (% of Total) | 0.9% | 0.9% | 0.9% | 0.9% |
| Average Loans ($ Billions) | $60.1 | $61.1 | $61.8 | $60.9 |
| Net Write-off Rate (Principal Only) | 1.5% | 1.3% | 1.3% | 1.4% |
American Express Credit Account Master Trust (Lending Trust)
| Metric | Mar 26 - Apr 30, 2015 | May 1 - May 31, 2015 | Jun 1 - Jun 30, 2015 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | $27.2 | $27.6 | $27.3 |
| Defaulted Amount ($ Billions) | $0.06 | $0.05 | $0.05 |
| Annualized Default Rate (Net of Recoveries) | 1.3% | 1.1% | 1.2% |
| Total 30+ Days Delinquent ($ Billions) | $0.2 | $0.2 | $0.2 |
Material Changes and Comparisons
- USCS Portfolio Stability: The 30+ days past due ratio remained stable at 0.9% across all reported months. The net write-off rate improved from 1.5% in April to 1.3% in May and June.
- Lending Trust Variance: The Lending Trust reported an annualized default rate of 1.2% for June, slightly higher than May's 1.1% but lower than the adjusted April period (1.3%).
- Data Comparability Note: The filing explicitly states that the Lending Trust data for the period March 26 through April 30, 2015, is not directly comparable to other periods due to an amended reporting period effective April 16, 2015, which included additional days of activity.
Management Commentary and Risks
The filing clarifies that USCS statistics include both securitized and non-securitized loans, whereas the Lending Trust reports only on securitized loans. Management notes that credit performance between the two may differ month-to-month due to:
- Differences in loan mix and vintage (e.g., a larger proportion of small business loans in the non-securitized portfolio).
- Calculation mechanics: The Lending Trust uses end-of-period principal balances, while USCS total portfolio statistics use average loan balances over the reporting period.
- Impact of additions to the securitization trust on the Lending Trust's net write-off rate.
The filing does not provide specific forward-looking guidance, revenue projections, or liquidity metrics beyond the credit statistics presented.
Investor Verification Checklist
- Verify the distinction between USCS total portfolio metrics and Lending Trust metrics when assessing credit quality.
- Confirm the impact of the April 2015 reporting period change on year-over-year comparisons for the Lending Trust.
- Review the composition of the non-securitized portfolio to understand the "small business loan" risk factor mentioned in the filing.
- Monitor the stability of the 0.9% delinquency rate against broader economic conditions.