Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on April 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 January 31, February 28, and March 31, 2023, as well as the three-month period ended March 31, 2023.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (March 31, 2023): $71.9 billion
- Average Loans (Q1 2023): $71.6 billion
- 30+ Days Past Due (March 31, 2023): 1.1% of total loans
- Net Write-off Rate (Q1 2023): 1.5% (principal only)
U.S. Small Business Card Member Loans
- Total Loans (March 31, 2023): $23.0 billion
- Average Loans (Q1 2023): $22.1 billion
- 30+ Days Past Due (March 31, 2023): 1.1% of total loans
- Net Write-off Rate (Q1 2023): 1.2% (principal only)
Total Card Member Loans (Consumer + Small Business)
- Total Loans (March 31, 2023): $95.0 billion
American Express Credit Account Master Trust (Lending Trust)
- Ending Principal Balance (March 31, 2023): $25.8 billion
- Annualized Default Rate (March 2023): 1.1%
- Total 30+ Days Delinquent (March 2023): $0.2 billion
Material Changes vs. Prior Period
Loan Balances: Total U.S. Consumer loans increased from $70.7 billion in February to $71.9 billion in March. Total U.S. Small Business loans rose from $22.0 billion in February to $23.0 billion in March.
Credit Quality Trends:
- Delinquency: The 30+ days past due rate for both Consumer and Small Business portfolios increased slightly from 1.0% in January to 1.1% in March 2023.
- Write-offs: The Consumer net write-off rate rose from 1.4% in February to 1.7% in March. The Small Business net write-off rate increased from 1.1% in February to 1.4% in March.
- Lending Trust: The annualized default rate for the Lending Trust increased from 0.9% in January to 1.1% in March 2023.
Management Commentary and Risks
The filing notes that the reported statistics are preliminary. Management highlights that the Card Member loans securitized through the Lending Trust do not possess identical characteristics to the total U.S. Consumer or Small Business portfolios. Differences in credit performance between the Lending Trust and the total portfolio may arise from variations in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
The filing does not provide specific forward-looking guidance, revenue projections, or liquidity metrics beyond the credit statistics presented.
Investor Verification Checklist
- Verify the trend of increasing net write-off rates in March 2023 for both Consumer (1.7%) and Small Business (1.4%) segments compared to February.
- Confirm the slight uptick in 30+ days past due ratios (1.1%) across both portfolios in March versus January (1.0%).
- Review the distinction between the total portfolio statistics and the Lending Trust (Form 10-D) data to understand potential variances in risk exposure.
- Monitor upcoming quarterly earnings reports for finalized data and management commentary on the drivers behind the March deterioration in credit metrics.