Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on February 16, 2021, under Item 7.01 (Regulation FD Disclosure). The report provides supplemental credit performance statistics for the U.S. Consumer Card Member and U.S. Small Business Card Member lending portfolios for the months ended January 31, 2021, December 31, 2020, and November 30, 2020. It also includes data for the American Express Credit Account Master Trust (Lending Trust) for the same periods.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Jan 2021): $48.7 billion
- 30+ Days Past Due: 1.0% of total loans
- Average Loans (Jan 2021): $50.0 billion
- Net Write-off Rate (Principal Only): 1.3%
U.S. Small Business Card Member Loans
- Total Loans (Jan 2021): $12.9 billion
- 30+ Days Past Due: 0.7% of total loans
- Average Loans (Jan 2021): $12.8 billion
- Net Write-off Rate (Principal Only): 1.4%
Lending Trust (Securitized Portfolio)
- Ending Total Principal Balance (Jan 2021): $23.3 billion
- Defaulted Amount: $0.04 billion
- Annualized Default Rate (Net of Recoveries): 1.1%
- Total 30+ Days Delinquent: $0.2 billion
Material Changes vs. Prior Period
From December 2020 to January 2021, the following trends were observed:
- Loan Balances: Total U.S. Consumer loans decreased from $51.3 billion to $48.7 billion. Total U.S. Small Business loans increased slightly from $12.8 billion to $12.9 billion. Combined total card member loans declined from $64.1 billion to $61.6 billion.
- Delinquency Rates: The 30+ days past due rate for U.S. Consumer loans remained stable at 1.0%. For U.S. Small Business loans, the rate improved slightly from 0.7% to 0.7% (unchanged).
- Write-off Rates: Net write-off rates improved for both segments. U.S. Consumer rates dropped from 1.6% to 1.3%, and U.S. Small Business rates dropped from 1.5% to 1.4%.
- Lending Trust: The annualized default rate improved from 1.2% in December to 1.1% in January.
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 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 trend in net write-off rates for both Consumer and Small Business segments over the last three months.
- Confirm the decline in total U.S. Consumer loan balances from December to January 2021.
- Review the distinction between the total portfolio statistics and the Lending Trust statistics to understand securitization impacts.
- Check subsequent Form 10-D filings for the Lending Trust to monitor the annualized default rate trajectory.