Business Context and Reporting Period
This Form 8-K, filed on June 15, 2015, by American Express Company, provides Regulation FD disclosure regarding delinquency and write-off statistics for the U.S. Card Services (USCS) operating segment. The data covers the months ended March 31, April 30, and May 31, 2015.
Key Financial Metrics
U.S. Card Services (USCS) Portfolio
| Metric | March 31, 2015 | April 30, 2015 | May 31, 2015 |
|---|---|---|---|
| Total Loans ($ Billions) | 59.9 | 60.3 | 61.8 |
| Average Loans ($ Billions) | 59.2 | 60.1 | 61.1 |
| 30+ Days Past Due (% of Total) | 1.0% | 0.9% | 0.9% |
| Net Write-off Rate (Principal Only) | 1.5% | 1.5% | 1.3% |
American Express Credit Account Master Trust (Lending Trust)
| Metric | Feb 23 - Mar 25, 2015 | Mar 26 - Apr 30, 2015 | May 1 - May 31, 2015 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | 27.0 | 27.2 | 27.6 |
| Defaulted Amount ($ Billions) | 0.05 | 0.06 | 0.05 |
| Annualized Default Rate (Net of Recoveries) | 1.4% | 1.3% | 1.1% |
| Total 30+ Days Delinquent ($ Billions) | 0.3 | 0.2 | 0.2 |
Material Changes and Comparability
- USCS Trends: Total loans increased from $59.9 billion in March to $61.8 billion in May. The net write-off rate improved from 1.5% in March and April to 1.3% in May.
- Lending Trust Trends: The annualized default rate declined from 1.4% in the March period to 1.1% in May.
- Reporting Period Adjustment: The Lending Trust reporting period for March 26 through April 30, 2015, included additional days of activity due to an amendment effective April 16, 2015. Consequently, this period is not directly comparable to other reporting periods.
- Portfolio Differences: The filing notes that the Lending Trust portfolio (securitized) does not possess identical characteristics to the total USCS portfolio (securitized and non-securitized). Differences in loan mix, vintage, and calculation mechanics (end-of-period vs. average balances) may cause credit performance to diverge.
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 statistical differences between the securitized trust and the total portfolio. The document serves strictly as a disclosure of historical credit performance statistics.
Investor Verification Checklist
- Verify the trend in the USCS net write-off rate improvement to 1.3% in May 2015.
- Confirm the impact of the April 16, 2015 reporting period amendment on the Lending Trust data comparability.
- Review the distinction between the Lending Trust (securitized) and total USCS portfolio (including non-securitized small business loans) when analyzing credit quality.
- Check subsequent Form 10-D filings for the Lending Trust to monitor the annualized default rate trajectory.