Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated April 16, 2018, provides Regulation FD disclosure regarding credit performance statistics. The report covers the U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios for the months ended January 31, February 28, and March 31, 2018, as well as the three-month period ended March 31, 2018.
Key Financial Metrics
USCS Card Member Loans
- Total Loans (March 31, 2018): $52.7 billion
- 30 Days Past Due: 1.4% of total loans (consistent across Jan, Feb, and Mar 2018)
- Average Loans (Q1 2018): $52.9 billion
- Net Write-off Rate (Q1 2018): 2.0% (principal only)
U.S. Small Business Card Member Loans
- Total Loans (March 31, 2018): $11.3 billion
- 30 Days Past Due: 1.3% of total loans (March 2018)
- Average Loans (Q1 2018): $11.0 billion
- Net Write-off Rate (Q1 2018): 1.6% (principal only)
Total Card Member Loans (USCS + Small Business)
- Total Loans (March 31, 2018): $63.9 billion
American Express Credit Account Master Trust (Lending Trust)
- Ending Principal Balance (March 2018): $23.3 billion
- Annualized Default Rate (March 2018): 1.6%
- Total 30+ Days Delinquent (March 2018): $0.2 billion
Material Changes and Commentary
The filing notes a specific timing adjustment affecting write-off rates between January and February 2018. Certain Card Member accounts that should have been written off in January were instead written off in February, impacting the write-off rate by approximately 10 basis points between the two periods.
Management clarifies that the statistics for the USCS and Small Business portfolios differ from the Lending Trust's Form 10-D reports due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances). Consequently, the Lending Trust's credit performance may vary month-to-month compared to the broader portfolio statistics.
Outlook and Risks
This filing does not contain forward-looking guidance, management outlook, or specific risk factors beyond the standard disclosure that Lending Trust performance may differ from the total portfolio due to structural calculation differences.
Investor Verification Checklist
- Verify the 10 basis point timing adjustment impact on Q1 write-off rates.
- Compare the 2.0% USCS net write-off rate against prior year Q1 data (not provided in this text) to assess trend direction.
- Review the Lending Trust Form 10-D filings to reconcile the 1.6% default rate with the broader portfolio write-off rates.
- Confirm the stability of the 1.4% delinquency rate for USCS loans over the three-month period.