Business Context and Reporting Period
This Form 8-K filing by American Express Company (the "Company") was submitted on March 15, 2018, under Item 7.01 Regulation FD Disclosure. The report provides delinquency and write-off statistics for the Card Member lending portfolios of the U.S. Consumer Services (USCS) and U.S. Small Business segments for the months ended December 31, 2017, January 31, 2018, and February 28, 2018. It also includes credit performance data for the American Express Credit Account Master Trust (the "Lending Trust").
Key Financial Metrics
U.S. Consumer Services (USCS) Card Member Loans
- Total Loans: $52.1 billion (Feb 2018), $53.2 billion (Jan 2018), $53.7 billion (Dec 2017).
- 30+ Days Past Due: 1.4% (Feb 2018), 1.4% (Jan 2018), 1.3% (Dec 2017).
- Average Loans: $52.7 billion (Feb 2018), $53.5 billion (Jan 2018), $52.6 billion (Dec 2017).
- Net Write-off Rate (Principal Only): 2.2% (Feb 2018), 1.7% (Jan 2018), 2.0% (Dec 2017).
U.S. Small Business Card Member Loans
- Total Loans: $10.9 billion (Feb 2018), $10.9 billion (Jan 2018), $10.9 billion (Dec 2017).
- 30+ Days Past Due: 1.4% (Feb 2018), 1.3% (Jan 2018), 1.2% (Dec 2017).
- Average Loans: $10.9 billion (Feb 2018), $10.9 billion (Jan 2018), $10.8 billion (Dec 2017).
- Net Write-off Rate (Principal Only): 1.7% (Feb 2018), 1.4% (Jan 2018), 1.6% (Dec 2017).
Lending Trust Performance
- Ending Total Principal Balance: $23.2 billion (Feb 2018), $23.9 billion (Jan 2018), $24.9 billion (Dec 2017).
- Annualized Default Rate (Net of Recoveries): 1.8% (Feb 2018), 1.3% (Jan 2018), 1.4% (Dec 2017).
- Total 30+ Days Delinquent: $0.3 billion (Feb 2018), $0.2 billion (Jan 2018), $0.2 billion (Dec 2017).
Material Changes and Unusual Items
Net write-off rates for both USCS and Small Business segments increased in February 2018 compared to January 2018. The filing notes an unusual item affecting these rates: certain Card Member accounts that should have been written off in January were instead written off in February. This timing difference affected the write-off rate by approximately 10 basis points between the two periods.
Delinquency rates (30+ days past due) showed a slight uptick in February 2018 for both segments compared to the prior month and the prior year-end.
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the disclosure of credit performance statistics. The Company notes that the credit performance of the Lending Trust may differ month-to-month from the total USCS or Small Business portfolios 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 impact of the 10 basis point timing adjustment on the February 2018 write-off rates.
- Compare the Lending Trust default rates against the broader USCS and Small Business portfolio metrics to assess securitization performance.
- Monitor the trend of 30+ days past due loans, which increased slightly in February 2018 for both consumer and small business segments.
- Review the subsequent Form 10-D filings for the Lending Trust to track the $23.2 billion principal balance trend.