Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on December 16, 2019, 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 September 30, October 31, and November 30, 2019.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Nov 2019): $60.4 billion
- Average Loans (Nov 2019): $60.2 billion
- 30+ Days Past Due: 1.6% (Nov 2019), 1.6% (Oct 2019), 1.5% (Sep 2019)
- Net Write-off Rate (Principal Only): 2.4% (Nov 2019), 2.3% (Oct 2019), 2.0% (Sep 2019)
U.S. Small Business Card Member Loans
- Total Loans (Nov 2019): $13.8 billion
- Average Loans (Nov 2019): $13.7 billion
- 30+ Days Past Due: 1.3% (Nov 2019), 1.3% (Oct 2019), 1.3% (Sep 2019)
- Net Write-off Rate (Principal Only): 2.0% (Nov 2019), 1.9% (Oct 2019), 1.7% (Sep 2019)
American Express Credit Account Master Trust (Lending Trust)
- Ending Total Principal Balance: $30.1 billion (consistent across Sep, Oct, Nov 2019)
- Defaulted Amount: $0.05 billion (consistent across Sep, Oct, Nov 2019)
- Annualized Default Rate (Net of Recoveries): 1.7% (Nov 2019), 1.5% (Oct 2019), 1.5% (Sep 2019)
- Total 30+ Days Delinquent: $0.3 billion (consistent across Sep, Oct, Nov 2019)
Material Changes Versus Prior Period
From September to November 2019, total Card Member loans (U.S. Consumer and Small Business combined) increased from $73.2 billion to $74.2 billion. Credit quality metrics showed a slight deterioration in the U.S. Consumer segment, with the net write-off rate rising from 2.0% in September to 2.4% in November. The 30+ days past due ratio for U.S. Consumer loans increased from 1.5% to 1.6%. In contrast, U.S. Small Business delinquency rates remained stable at 1.3%, though the write-off rate increased from 1.7% to 2.0% over the same period.
Guidance, Outlook, and Risks
This filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the disclosure of credit statistics. 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 (e.g., end-of-period balances vs. average balances).
Investor Verification Checklist
- Verify the trend in net write-off rates for U.S. Consumer loans, which increased by 40 basis points from September to November 2019.
- Confirm the stability of the Lending Trust's principal balance at $30.1 billion despite fluctuations in the broader portfolio.
- Review the distinction between the reported portfolio statistics and the Lending Trust statistics to understand potential variances in credit performance reporting.
- Monitor the 30+ days past due ratio for U.S. Consumer loans, which ticked up to 1.6% in November 2019.