Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated December 17, 2018, serves as a Regulation FD disclosure. It provides 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 operating segment) for the months ended September 30, October 31, and November 30, 2018.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Nov 2018): $58.2 billion
- 30 Days Past Due: 1.4% of total loans (consistent across Sep, Oct, and Nov 2018)
- Average Loans (Nov 2018): $57.5 billion
- Net Write-off Rate (Principal Only): 2.0% (consistent across Sep, Oct, and Nov 2018)
U.S. Small Business Card Member Loans
- Total Loans (Nov 2018): $12.2 billion
- 30 Days Past Due: 1.2% (Nov and Oct 2018), up from 1.1% in Sep 2018
- Average Loans (Nov 2018): $12.1 billion
- Net Write-off Rate (Principal Only): 1.6% (Nov and Oct 2018), up from 1.5% in Sep 2018
Combined U.S. Card Member Loans
- Total Loans (Nov 2018): $70.4 billion
American Express Credit Account Master Trust (Lending Trust)
- Ending Total Principal Balance (Nov 2018): $31.3 billion
- Annualized Default Rate, Net of Recoveries (Nov 2018): 1.1%
- Total 30+ Days Delinquent (Nov 2018): $0.3 billion
Material Changes and Corrections
The filing notes a correction to the Ending total principal balance for the October 2018 monthly period of the Lending Trust. The figure was updated to $30.8 billion to correct a typographical error in a previous Form 8-K filed on November 15, 2018. The correct amount had been reported in the corresponding Form 10-D. Additionally, the October 2018 Lending Trust data reflects the acquisition of approximately $8 billion of receivables in additional accounts on October 1, 2018.
Management Commentary and Risks
The filing clarifies that the statistics provided are additional to data reported by the American Express Credit Account Master Trust in its monthly Form 10-D reports. Management notes that loans securitized through the Lending Trust do not possess identical characteristics to the total U.S. Consumer or Small Business portfolios, which include both securitized and non-securitized loans. Consequently, the credit performance of the Lending Trust may vary month-to-month 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 stability of the 1.4% delinquency rate for U.S. Consumer loans over the three-month period.
- Confirm the slight increase in delinquency (1.1% to 1.2%) and write-off rates (1.5% to 1.6%) for U.S. Small Business loans.
- Review the Form 10-D filings for the Lending Trust to compare securitized loan performance against the broader portfolio metrics presented here.
- Understand the impact of the $8 billion receivable acquisition in October 2018 on the Lending Trust's reported balances and default rates.
- Note that write-off rates are calculated on principal only, excluding interest and fees.