Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on May 15, 2024, under Item 7.01 Regulation FD Disclosure. The report provides supplemental credit performance statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended February 29, March 31, and April 30, 2024. It also includes 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 (April 2024): $82.6 billion
- 30 Days Past Due: 1.4% (April 2024), down from 1.5% in February 2024
- Net Write-off Rate (Principal Only): 2.5% (April 2024), up from 2.3% in March 2024
U.S. Small Business Card Member Loans
- Total Loans (April 2024): $27.7 billion
- 30 Days Past Due: 1.4% (April 2024), down from 1.5% in February 2024
- Net Write-off Rate (Principal Only): 2.2% (April 2024), down from 2.4% in March 2024
American Express Credit Account Master Trust
- Ending Total Principal Balance (April 2024): $25.6 billion
- Annualized Default Rate (Net of Recoveries): 1.6% (April 2024), up from 1.4% in March 2024
- Total 30+ Days Delinquent: $0.2 billion (consistent across Feb, Mar, and Apr 2024)
Material Changes
From February to April 2024, total Card Member loans (Consumer and Small Business combined) increased from $107.0 billion to $110.3 billion. Delinquency rates (30 days past due) improved slightly for both Consumer and Small Business segments, dropping from 1.5% to 1.4%. However, the Consumer net write-off rate increased to 2.5% in April, while the Small Business rate decreased to 2.2%. The Lending Trust's annualized default rate rose to 1.6% in April from 1.4% in March.
Management Commentary and Risks
The filing notes that the statistics provided are additional to data reported in the Lending Trust's monthly Form 10-D. Management highlights that the Lending Trust's credit performance may differ month-to-month from the total portfolio due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances). No specific forward-looking guidance or new risk factors were introduced in this specific disclosure.
Investor Verification Checklist
- Verify the trend in Consumer net write-off rates, which rose to 2.5% in April 2024.
- Compare the Lending Trust's annualized default rate (1.6%) against the broader portfolio write-off rates to assess securitization impact.
- Monitor the stability of the 30+ days delinquent balance in the Lending Trust, which remained flat at $0.2 billion for three consecutive months.
- Review the total loan growth trajectory, which increased by $3.3 billion from February to April 2024.