Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on November 16, 2020, 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 August 31, September 30, and October 31, 2020.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Oct 31, 2020): $49.8 billion
- 30+ Days Past Due: 1.1% of total loans
- Net Write-off Rate (Principal Only): 2.2% (October), 2.0% (September), 2.5% (August)
U.S. Small Business Card Member Loans
- Total Loans (Oct 31, 2020): $11.9 billion
- 30+ Days Past Due: 1.0% of total loans
- Net Write-off Rate (Principal Only): 2.1% (October), 1.8% (September), 2.4% (August)
American Express Credit Account Master Trust (Lending Trust)
- Ending Total Principal Balance (Oct 31, 2020): $24.2 billion
- Annualized Default Rate (Net of Recoveries): 1.6% (October), 1.5% (September), 1.9% (August)
- Total 30+ Days Delinquent: $0.2 billion for all three reported months
Material Changes Versus Prior Period
For the U.S. Consumer portfolio, the net write-off rate decreased from 2.5% in August to 2.0% in September, before rising slightly to 2.2% in October. The 30+ days past due ratio improved from 1.2% in August to 1.1% in September and remained stable in October. Similarly, the U.S. Small Business portfolio saw the net write-off rate decline from 2.4% in August to 1.8% in September, followed by an increase to 2.1% in October. Delinquency rates for small businesses improved from 1.2% in August to 1.0% in October. The Lending Trust's annualized default rate followed a similar trend, dropping from 1.9% in August to 1.5% in September and rising to 1.6% in October.
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 U.S. Consumer or Small Business portfolios 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 to assess credit quality stability.
- Compare the Lending Trust default rates against the broader portfolio statistics to understand the impact of securitization.
- Monitor the 30+ days past due percentages for early signs of credit deterioration.
- Confirm that the reported write-off rates are principal-only and exclude interest and fees.