Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on July 17, 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 April 30, May 31, and June 30, 2023, as well as the three-month period ended June 30, 2023.
Key Financial Metrics
The filing focuses on credit performance metrics rather than revenue or profit. Key data points for the three months ended June 30, 2023, include:
- Total Card Member Loans: $99.4 billion (U.S. Consumer and U.S. Small Business combined).
- U.S. Consumer Portfolio: Total loans of $75.6 billion with a net write-off rate of 1.7% and 30+ days past due loans at 1.1%.
- U.S. Small Business Portfolio: Total loans of $23.8 billion with a net write-off rate of 1.6% and 30+ days past due loans at 1.2%.
- Lending Trust Performance: For the month ended June 30, 2023, the American Express Credit Account Master Trust reported an ending principal balance of $26.1 billion and an annualized default rate of 1.1%.
Material Changes Versus Prior Period
Credit metrics showed slight deterioration in June 2023 compared to May 2023:
- U.S. Consumer Write-offs: The net write-off rate increased from 1.6% in May to 1.8% in June.
- U.S. Small Business Write-offs: The net write-off rate increased from 1.7% in May to 1.7% in June (stable), though the 30+ days past due rate rose from 1.1% to 1.2%.
- Lending Trust Defaults: The annualized default rate for the Lending Trust rose from 1.0% in May to 1.1% 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 performance trends. The document notes that the Lending Trust statistics may differ from the total portfolio statistics due to differences in loan mix, vintage, aging, and calculation mechanics (end-of-period balances vs. average balances).
Investor Verification Checklist
- Verify the trend in net write-off rates for U.S. Consumer loans, which rose to 1.8% in June 2023.
- Confirm the stability of the 30+ days past due rates, which remained at 1.1% for consumers but increased to 1.2% for small businesses.
- Review the distinction between the total portfolio statistics and the Lending Trust (securitized) statistics to understand the full scope of credit exposure.
- Monitor subsequent monthly filings for confirmation of whether the June 2023 increase in write-offs represents a temporary fluctuation or a sustained trend.