Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on January 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 October 31, November 30, and December 31, 2022, as well as the three-month period ended December 31, 2022.
Key Financial Metrics
The filing focuses on credit performance metrics rather than revenue or profit. Key data points include:
- Total Card Member Loans (U.S. Consumer and Small Business): $94.1 billion as of December 31, 2022.
- U.S. Consumer Loans: $72.7 billion total; 30+ days past due at 1.0%; Net write-off rate (principal only) at 1.1% for the quarter.
- U.S. Small Business Loans: $21.4 billion total; 30+ days past due at 0.9%; Net write-off rate (principal only) at 0.9% for the quarter.
- Lending Trust Performance: Ending principal balance of $27.2 billion; Annualized default rate (net of recoveries) at 0.7% for December 2022.
Material Changes Versus Prior Period
Credit metrics showed slight deterioration in December 2022 compared to the prior two months:
- Delinquency Rates: The 30+ days past due ratio for U.S. Consumer loans increased from 0.9% in October and November to 1.0% in December. Similarly, U.S. Small Business delinquency rose from 0.8% to 0.9%.
- Write-off Rates: The quarterly net write-off rate for U.S. Consumer loans was 1.1%, an increase from the monthly rates of 0.9% (October) and 1.0% (November). U.S. Small Business write-offs rose to 0.9% in December from 0.8% in October.
- Loan Balances: Total loan balances grew sequentially from $89.5 billion in October to $94.1 billion in December.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the presentation of credit statistics. The document notes that the reported statistics for the total portfolio differ from those of the American Express Credit Account Master Trust (Lending Trust) 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 trend of net write-off rates in subsequent quarterly earnings reports to confirm if the December 2022 increase is a temporary fluctuation or a sustained trend.
- Compare the Lending Trust default rates (0.7%) with the broader portfolio write-off rates (1.1% for consumers) to understand the impact of securitization on reported credit quality.
- Monitor the 30+ days past due ratios for early signs of broader economic stress affecting card members.
- Review the upcoming 10-Q or 10-K filings for finalized data, as the figures in this 8-K are marked as preliminary.