Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on May 15, 2019, under Item 7.01 (Regulation FD Disclosure). The report provides monthly 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 28, March 31, and April 30, 2019.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (April 30, 2019): $58.4 billion
- 30+ Days Past Due: 1.4% (down from 1.5% in March and February)
- Net Write-off Rate (Principal Only): 2.4% (down from 2.5% in March; unchanged from February)
U.S. Small Business Card Member Loans
- Total Loans (April 30, 2019): $12.7 billion
- 30+ Days Past Due: 1.3% (stable across all three months)
- Net Write-off Rate (Principal Only): 1.8% (down from 1.9% in March and February)
Combined U.S. Card Member Loans
- Total Portfolio (April 30, 2019): $71.1 billion
American Express Credit Account Master Trust (Lending Trust)
- Ending Principal Balance (April 2019): $30.4 billion
- Annualized Default Rate (Net of Recoveries): 1.6% (up from 1.4% in February)
- Total 30+ Days Delinquent: $0.3 billion (stable across all three months)
Material Changes
From February to April 2019, the U.S. Consumer portfolio showed slight improvement in credit quality, with the 30+ days past due ratio decreasing from 1.5% to 1.4% and the net write-off rate dropping from 2.5% to 2.4% in April. The U.S. Small Business portfolio maintained a stable delinquency rate of 1.3% while improving its net write-off rate from 1.9% to 1.8%. Total loan balances for both segments increased modestly over the three-month period.
Outlook, Risks, and Contingencies
The filing notes that the credit performance of the Lending Trust may differ from the total U.S. Consumer and Small Business portfolios due to differences in loan mix, vintage, aging, and calculation methodologies (e.g., end-of-period balances vs. average balances). No specific forward-looking guidance or management commentary regarding future performance was included in this specific disclosure.
Investor Verification Checklist
- Verify the trend in net write-off rates for U.S. Consumer loans, which improved in April after a spike in March.
- Confirm the stability of the 30+ days past due ratio for U.S. Small Business loans at 1.3%.
- Review the Lending Trust's annualized default rate increase to 1.6% in April compared to 1.4% in February.
- Understand the distinction between the reported portfolio statistics and the Lending Trust statistics due to differing calculation mechanics.