Business Context and Reporting Period
This Form 8-K filing by American Express Company (the "Company") dated June 15, 2017, serves as a Regulation FD disclosure. It provides monthly 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 March 31, April 30, and May 31, 2017.
Key Financial Metrics
U.S. Consumer Services (USCS) Card Member Loans
- Total Loans: Increased from $46.7 billion (March) to $48.4 billion (May).
- 30+ Days Past Due: Declined from 1.2% in March to 1.1% in April and May.
- Net Write-off Rate (Principal Only): Remained stable at 1.8% for all three months.
U.S. Small Business Card Member Loans
- Total Loans: Increased from $9.9 billion (March) to $10.1 billion (May).
- 30+ Days Past Due: Declined from 1.2% in March/April to 1.1% in May.
- Net Write-off Rate (Principal Only): Improved from 1.8% in March to 1.5% in April and May.
American Express Credit Account Master Trust (Lending Trust)
- Ending Principal Balance: Rose from $23.7 billion (March) to $24.1 billion (May).
- Annualized Default Rate (Net of Recoveries): Fluctuated between 1.3% and 1.5% across the three months.
- Total 30+ Days Delinquent: Remained constant at $0.2 billion.
Material Changes
From March to May 2017, total loan balances for both USCS and Small Business segments showed consistent growth. Credit quality metrics generally improved or remained stable, with delinquency rates decreasing slightly in both segments by May. The Small Business segment saw a notable improvement in its net write-off rate, dropping from 1.8% to 1.5%.
Management Commentary and Risks
The Company notes that the statistics provided are additional to data reported by the American Express Credit Account Master Trust in its monthly Form 10-D filings. Management highlights that loans securitized through the Lending Trust do not possess identical characteristics to the total USCS or Small Business portfolios. Differences in credit performance between the Trust and the total portfolios may arise due to variations in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Investor Verification Checklist
- Verify the trend in net write-off rates for the Small Business segment, which improved to 1.5%.
- Confirm the stability of the USCS net write-off rate at 1.8% despite loan growth.
- Review the corresponding Form 10-D filings for the Lending Trust to compare default rates against the broader portfolio statistics.
- Assess the impact of loan mix and vintage differences between securitized and non-securitized portfolios on overall credit risk.