Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated November 15, 2018, provides Regulation FD disclosure regarding credit performance statistics. The report covers 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) for the months ended August 31, September 30, and October 31, 2018.
Key Financial Metrics
The filing details loan balances, delinquency rates, and net write-off rates for the specified periods.
| Metric | Oct 31, 2018 | Sep 30, 2018 | Aug 31, 2018 |
|---|---|---|---|
| U.S. Consumer Total Loans ($B) | 56.9 | 56.2 | 55.6 |
| Consumer 30+ Days Past Due (%) | 1.4% | 1.4% | 1.3% |
| Consumer Net Write-off Rate (%) | 2.0% | 2.0% | 2.2% |
| U.S. Small Business Total Loans ($B) | 12.1 | 11.9 | 11.8 |
| Small Business 30+ Days Past Due (%) | 1.2% | 1.1% | 1.1% |
| Small Business Net Write-off Rate (%) | 1.6% | 1.5% | 1.7% |
| Total Card Member Loans ($B) | 69.0 | 68.1 | 67.4 |
American Express Credit Account Master Trust (Lending Trust) Metrics:
- Ending Principal Balance (Oct 2018): $30.1 billion (includes ~$8 billion acquisition on Oct 1).
- Annualized Default Rate (Oct 2018): 1.0% (down from 1.3% in September and 1.5% in August).
- Total 30+ Days Delinquent: $0.2 billion for all three months.
Material Changes
- Loan Growth: Total Card Member loans increased from $67.4 billion in August to $69.0 billion in October.
- Consumer Credit Quality: The 30+ days past due rate for U.S. Consumer loans ticked up slightly to 1.4% in October from 1.3% in August. The net write-off rate improved to 2.0% in October and September from 2.2% in August.
- Small Business Credit Quality: The 30+ days past due rate for U.S. Small Business loans increased to 1.2% in October from 1.1% in the prior two months. The net write-off rate rose to 1.6% in October from 1.5% in September.
- Lending Trust Acquisition: The Lending Trust acquired approximately $8 billion of receivables on October 1, 2018, significantly increasing its ending principal balance compared to September.
Outlook, Risks, and Unusual Items
The filing does not provide forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard disclosure of credit statistics. It notes that the Lending Trust's credit performance may differ from the total portfolio due to differences in loan mix, vintage, aging, and calculation mechanics (end-of-period balances vs. average balances).
Investor Verification Checklist
- Verify the impact of the $8 billion receivable acquisition on the Lending Trust's October default rate calculation.
- Monitor the trend in U.S. Small Business 30+ days past due rates, which increased for two consecutive months.
- Compare the net write-off rates in this filing against the company's quarterly earnings reports to ensure consistency in reporting methodology.
- Review the Form 10-D filings for the Lending Trust to understand the specific composition of the securitized loans versus the total portfolio.