Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on September 16, 2019, under Item 7.01 Regulation FD Disclosure. The report provides monthly delinquency and write-off statistics for the U.S. Consumer Card Member lending portfolio (Global Consumer Services Group) and the U.S. Small Business Card Member lending portfolio (Global Commercial Services Group) for the months ended June 30, July 31, and August 31, 2019.
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 | Aug 31, 2019 | Jul 31, 2019 | Jun 30, 2019 |
|---|---|---|---|
| U.S. Consumer Card Member Loans | |||
| Total Loans ($ Billions) | $59.9 | $59.7 | $59.5 |
| 30+ Days Past Due (%) | 1.5% | 1.4% | 1.4% |
| Net Write-off Rate (%) | 2.3% | 2.2% | 2.2% |
| U.S. Small Business Card Member Loans | |||
| Total Loans ($ Billions) | $13.4 | $13.2 | $13.2 |
| 30+ Days Past Due (%) | 1.2% | 1.3% | 1.3% |
| Net Write-off Rate (%) | 1.9% | 1.9% | 1.7% |
| Total Card Member Loans | |||
| Combined Total ($ Billions) | $73.3 | $72.8 | $72.6 |
American Express Credit Account Master Trust (Lending Trust) Metrics:
- Ending Principal Balance (Aug 2019): $30.4 billion
- Annualized Default Rate (Aug 2019): 1.6%
- Total 30+ Days Delinquent (Aug 2019): $0.3 billion
Material Changes
From June to August 2019, the following trends were observed:
- Loan Growth: Total U.S. Consumer loans increased from $59.5 billion to $59.9 billion, while Small Business loans grew from $13.2 billion to $13.4 billion.
- Consumer Delinquency: The 30+ days past due rate for U.S. Consumer loans rose slightly from 1.4% in June/July to 1.5% in August.
- Consumer Write-offs: The net write-off rate for U.S. Consumer loans increased from 2.2% in June/July to 2.3% in August.
- Small Business Delinquency: The 30+ days past due rate for Small Business loans improved from 1.3% in June/July to 1.2% in August.
- Small Business Write-offs: The net write-off rate for Small Business loans increased from 1.7% in June to 1.9% in July and August.
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. However, the text 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 U.S. Consumer net write-off rates, which increased to 2.3% in August 2019.
- Confirm the slight uptick in U.S. Consumer delinquency (30+ days past due) to 1.5% in August 2019.
- Review the distinction between the total portfolio statistics and the Lending Trust (securitized) statistics, as calculation methodologies differ.
- Monitor the stability of Small Business delinquency rates, which improved to 1.2% despite a rise in write-off rates to 1.9%.