Business Context and Reporting Period
This Form 8-K, filed on January 17, 2017, by American Express Company, provides Regulation FD disclosure regarding delinquency and write-off statistics. The data covers the U.S. Consumer Services (USCS) and U.S. Small Business Card Member lending portfolios for the months ended October 31, November 30, and December 31, 2016, as well as the three-month period ended December 31, 2016.
Key Financial Metrics
The filing details credit performance metrics for total loans, delinquency rates, and net write-off rates (principal only) for both USCS and Small Business segments, alongside data for the American Express Credit Account Master Trust (Lending Trust).
| Metric | USCS Total Loans (Billions) | USCS 30+ Days Past Due (%) | USCS Net Write-off Rate (%) | Small Biz Total Loans (Billions) | Small Biz 30+ Days Past Due (%) | Small Biz Net Write-off Rate (%) |
|---|---|---|---|---|---|---|
| Oct 31, 2016 | $45.5 | 1.1% | 1.6% | $9.2 | 1.1% | 1.5% |
| Nov 30, 2016 | $46.7 | 1.1% | 1.5% | $9.3 | 1.1% | 1.2% |
| Dec 31, 2016 (Prelim) | $48.8 | 1.1% | 1.5% | $9.5 | 1.1% | 1.6% |
| 3 Months Ended Dec 31, 2016 | $48.8 | 1.1% | 1.5% | $9.5 | 1.1% | 1.4% |
Lending Trust Data (Dec 2016): Ending principal balance of $25.4 billion, defaulted amount of $0.04 billion, annualized default rate of 1.1%, and total 30+ days delinquent of $0.2 billion.
Material Changes
- Loan Growth: Total USCS loans increased from $45.5 billion in October to $48.8 billion in December. Small Business loans grew from $9.2 billion to $9.5 billion over the same period.
- Delinquency Stability: The 30 days past due ratio remained stable at 1.1% for both USCS and Small Business segments across all reported months.
- Write-off Volatility: Small Business net write-off rates fluctuated between 1.2% (November) and 1.6% (October and December), while USCS rates remained relatively steady between 1.5% and 1.6%.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the disclosure of credit statistics. However, the text notes that credit performance of the Lending Trust may differ from the total 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 preliminary nature of the December 31, 2016, statistics.
- Confirm the distinction between the total portfolio statistics and the Lending Trust (securitized) statistics, as calculation methodologies differ.
- Monitor the volatility in Small Business net write-off rates compared to the stability in USCS rates.
- Review subsequent Form 10-D filings for the Lending Trust to track the annualized default rate trend.