Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on October 15, 2021, under Item 7.01 Regulation FD Disclosure. The report provides preliminary delinquency and write-off statistics for the U.S. Consumer Card Member and U.S. Small Business Card Member lending portfolios for the months ended July 31, August 31, and September 30, 2021, as well as the three-month period ended September 30, 2021.
Key Financial Metrics
The filing focuses on credit performance metrics rather than revenue or profit. Key data points for the three months ended September 30, 2021, include:
- Total Card Member Loans (U.S. Consumer + Small Business): $67.5 billion.
- U.S. Consumer Portfolio: Total loans of $52.6 billion with a net write-off rate of 0.5% and 30+ days past due loans at 0.7%.
- U.S. Small Business Portfolio: Total loans of $14.8 billion with a net write-off rate of 0.4% and 30+ days past due loans at 0.5%.
- Lending Trust Performance: For the month ended September 30, 2021, the American Express Credit Account Master Trust reported an ending principal balance of $23.7 billion and an annualized default rate of 0.4%.
Material Changes Versus Prior Period
Credit metrics showed slight fluctuations compared to the prior two months:
- U.S. Consumer Write-offs: The net write-off rate decreased from 0.7% in July and 0.6% in August to 0.5% in September 2021.
- U.S. Consumer Delinquency: The 30+ days past due rate increased slightly from 0.6% in July and August to 0.7% in September 2021.
- Small Business Write-offs: The net write-off rate improved from 0.5% in July and August to 0.4% in September 2021.
- Lending Trust Defaults: The annualized default rate for the Lending Trust improved from 0.6% in July to 0.4% in August and September 2021.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the standard disclosure of credit statistics. It 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 trend in net write-off rates for the U.S. Consumer portfolio, which has declined over the last three months.
- Confirm the stability of the 30+ days past due rate for U.S. Small Business loans, which remained at 0.5% in September after a dip in July.
- Review the discrepancy between the total portfolio loan balances ($67.5 billion) and the Lending Trust principal balance ($23.7 billion) to understand the securitization exposure.
- Monitor the Lending Trust's annualized default rate, which has stabilized at 0.4% for the last two months.