American Express Company Form 8-K Summary
Business Context and Reporting Period
This Form 8-K, filed on December 15, 2020, serves as a Regulation FD disclosure providing monthly delinquency and write-off statistics for American Express Company's U.S. Consumer and U.S. Small Business Card Member lending portfolios. The data covers the months ended September 30, October 31, and November 30, 2020.
Key Financial Metrics
The filing details credit performance metrics for total loans, delinquency rates, and net write-off rates (principal only) for both consumer and small business segments, as well as data for the American Express Credit Account Master Trust (Lending Trust).
| Metric | Nov 2020 | Oct 2020 | Sep 2020 |
|---|---|---|---|
| U.S. Consumer Total Loans ($B) | $50.2 | $49.8 | $49.7 |
| Consumer 30+ Days Past Due (%) | 1.0% | 1.1% | 1.1% |
| Consumer Net Write-off Rate (%) | 1.9% | 2.2% | 2.0% |
| U.S. Small Business Total Loans ($B) | $12.2 | $11.9 | $11.6 |
| Small Business 30+ Days Past Due (%) | 0.8% | 1.0% | 1.1% |
| Small Business Net Write-off Rate (%) | 2.3% | 2.1% | 1.8% |
| Total Card Member Loans ($B) | $62.4 | $61.6 | $61.4 |
Lending Trust Metrics (Nov 2020): Ending principal balance of $24.2 billion, defaulted amount of $0.05 billion, and an annualized default rate (net of recoveries) of 1.6%.
Material Changes
- Loan Growth: Total Card Member loans increased by $0.8 billion from October to November 2020, driven by growth in both Consumer ($0.4B increase) and Small Business ($0.3B increase) portfolios.
- Delinquency Improvement: The 30+ days past due ratio improved for both segments in November compared to October. Consumer delinquency dropped from 1.1% to 1.0%, and Small Business delinquency dropped from 1.0% to 0.8%.
- Write-off Volatility: The Consumer net write-off rate decreased to 1.9% in November from 2.2% in October. Conversely, the Small Business net write-off rate increased to 2.3% in November from 2.1% in October.
Outlook, Risks, and Contingencies
The filing notes that the credit performance of the Lending Trust may differ from the total portfolio statistics due to differences in loan mix, vintage, aging, and calculation mechanics (end-of-period balances vs. average balances). No forward-looking guidance or management commentary regarding future performance is provided in this specific filing.
Key Facts for Investor Verification
- Verify the trend of improving delinquency rates (30+ days past due) across both Consumer and Small Business segments in Q4 2020.
- Monitor the divergence in write-off rates between Consumer (improving) and Small Business (worsening) segments in November 2020.
- Confirm the distinction between the reported portfolio statistics and the Lending Trust data, as the latter excludes non-securitized loans and uses different calculation methodologies.
- Review subsequent filings to determine if the November 2020 improvement in delinquency rates was sustained.