Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on May 15, 2020, under Item 7.01 Regulation FD Disclosure. The report provides 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 February 29, March 31, and April 30, 2020.
Key Financial Metrics
The filing details credit performance metrics for total loans, delinquency rates, and net write-off rates (principal only) for the specified periods.
| Metric | April 30, 2020 | March 31, 2020 | February 29, 2020 |
|---|---|---|---|
| U.S. Consumer Total Loans ($B) | $50.5 | $55.6 | $59.1 |
| U.S. Consumer 30+ Days Past Due (%) | 1.7% | 1.7% | 1.6% |
| U.S. Consumer Net Write-off Rate (%) | 2.7% | 2.8% | 2.6% |
| U.S. Small Business Total Loans ($B) | $12.4 | $13.4 | $14.0 |
| U.S. Small Business 30+ Days Past Due (%) | 1.6% | 1.4% | 1.3% |
| U.S. Small Business Net Write-off Rate (%) | 2.0% | 2.0% | 1.9% |
| Total Card Member Loans ($B) | $62.9 | $69.0 | $73.0 |
Lending Trust Data (Securitized Loans): For the period April 1–30, 2020, the American Express Credit Account Master Trust reported an ending principal balance of $24.4 billion, a defaulted amount of $0.05 billion, and an annualized default rate of 2.1%.
Material Changes
- Loan Balances: Total Card Member loans declined from $73.0 billion in February to $62.9 billion in April 2020, reflecting a reduction in both Consumer and Small Business portfolios.
- Delinquency Trends: The 30+ days past due rate for U.S. Small Business loans increased from 1.3% in February to 1.6% in April. U.S. Consumer delinquency remained relatively stable at 1.7% in March and April, up slightly from 1.6% in February.
- Write-off Rates: Net write-off rates for U.S. Consumer loans fluctuated between 2.6% and 2.8% over the three-month period. Small Business write-off rates remained steady at 2.0% for March and April.
Management Commentary and Risks
Customer Pandemic Relief Program: The Company implemented a program in Q1 2020 for customers impacted by COVID-19. Under this program, delinquency status is frozen at enrollment, and loans current at enrollment do not age regardless of payment status. Aging resumes upon exiting the program.
Data Distinctions: The filing notes that the reported statistics for the total portfolios differ from the American Express Credit Account Master Trust (Lending Trust) data due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Missing Information: This filing does not provide revenue, profit, cash flow, margins, debt, or liquidity figures. It is strictly a disclosure of credit performance statistics.
Investor Verification Checklist
- Verify the impact of the Customer Pandemic Relief Program on future delinquency aging once customers exit the program.
- Compare the reported portfolio write-off rates against the Lending Trust's annualized default rate to assess securitization performance.
- Monitor the trend of declining total loan balances ($73.0B to $62.9B) to determine if this reflects paydowns or charge-offs.
- Review subsequent filings for updated delinquency rates as the pandemic relief program matures.