Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on October 15, 2019, under Item 7.01 Regulation FD Disclosure. The report provides preliminary 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 July 31, August 31, and September 30, 2019, as well as the three-month period ended September 30, 2019.
Key Financial Metrics
The filing focuses on credit performance metrics rather than revenue or profit. Key data points for the three months ended September 30, 2019, include:
- U.S. Consumer Card Member Loans: Total loans of $59.7 billion with a net write-off rate (principal only) of 2.2%. Loans 30 days past due represented 1.5% of the total.
- U.S. Small Business Card Member Loans: Total loans of $13.4 billion with a net write-off rate (principal only) of 1.8%. Loans 30 days past due represented 1.3% of the total.
- Total Card Member Loans: Combined total of $73.2 billion.
- Lending Trust Performance: For the month of September 2019, the American Express Credit Account Master Trust reported an ending principal balance of $30.1 billion and an annualized default rate, net of recoveries, of 1.5%.
Material Changes Versus Prior Period
Comparing the three months ended September 30, 2019, to the prior month (August 31, 2019):
- Consumer Write-offs: The net write-off rate decreased from 2.3% in August to 2.0% in September, with the quarterly average settling at 2.2%.
- Small Business Write-offs: The net write-off rate decreased from 1.9% in August to 1.7% in September, with the quarterly average at 1.8%.
- Delinquency: The 30-day past due percentage for Consumer loans remained stable at 1.5% for both August and September. Small Business delinquency increased slightly from 1.2% in August to 1.3% in September.
- Loan Balances: Total Consumer loans remained flat at $59.7 billion between August and September. Small Business loans increased slightly from $13.4 billion to $13.4 billion (rounded).
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond standard disclosures. It 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). The data provided is labeled as preliminary.
Investor Verification Checklist
- Verify the final, non-preliminary credit statistics in the subsequent quarterly earnings release.
- Compare the Lending Trust default rates (1.5% in September) against the broader portfolio write-off rates to assess securitization impact.
- Monitor the trend of the 30-day delinquency rate for Small Business loans, which showed a slight uptick in September.
- Confirm the consistency of the "principal only" write-off rate definition against prior year filings to ensure accurate year-over-year comparisons.