Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on October 16, 2023, under Item 7.01 Regulation FD Disclosure. The report provides preliminary delinquency and write-off statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended July 31, August 31, and September 30, 2023, as well as the three-month period ended September 30, 2023.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Sept 30, 2023): $77.7 billion
- 30 Days Past Due (% of Total): 1.3% (up from 1.2% in August and 1.1% in July)
- Average Loans (Q3 2023): $77.1 billion
- Net Write-off Rate (Principal Only, Q3 2023): 1.7%
U.S. Small Business Card Member Loans
- Total Loans (Sept 30, 2023): $25.2 billion
- 30 Days Past Due (% of Total): 1.2% (stable across July, August, and September)
- Average Loans (Q3 2023): $24.4 billion
- Net Write-off Rate (Principal Only, Q3 2023): 1.8%
Total Card Member Loans (Consumer + Small Business)
- Total Loans (Sept 30, 2023): $102.9 billion
American Express Credit Account Master Trust (Lending Trust)
- Ending Total Principal Balance (Sept 2023): $25.8 billion
- Annualized Default Rate, Net of Recoveries (Sept 2023): 1.2%
- Total 30+ Days Delinquent (Sept 2023): $0.2 billion
Material Changes Versus Prior Period
- Consumer Delinquency Trend: The 30-day past due rate for U.S. Consumer loans increased sequentially from 1.1% in July to 1.2% in August, and further to 1.3% in September 2023.
- Small Business Stability: The 30-day past due rate for U.S. Small Business loans remained flat at 1.2% for all three months reported.
- Write-off Rates: The net write-off rate for Consumer loans decreased slightly from 1.8% in July to 1.7% in August and September. Small Business write-off rates remained steady at 1.8% for August and September after being 1.8% in July.
- Lending Trust Performance: The annualized default rate for the Lending Trust rose slightly from 1.1% in August to 1.2% in September.
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 performance statistics. The document notes that the credit performance of the Lending Trust may differ from the total portfolio 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 sequential increase in U.S. Consumer 30-day delinquency rates (1.1% to 1.3%) over the third quarter.
- Confirm the stability of U.S. Small Business delinquency rates at 1.2% despite broader economic conditions.
- Review the distinction between the reported portfolio statistics and the Lending Trust (securitized) statistics to understand potential variances in credit quality reporting.
- Monitor the net write-off rates (1.7% for Consumer, 1.8% for Small Business) against historical trends to assess credit cost trajectory.