Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated February 17, 2015, 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 November 30, 2014, December 31, 2014, and January 31, 2015.
Key Financial Metrics
U.S. Card Services (USCS) Portfolio
| Metric | Nov 30, 2014 | Dec 31, 2014 | Jan 31, 2015 |
|---|---|---|---|
| Total Loans ($ Billions) | 59.9 | 62.6 | 60.4 |
| Average Loans ($ Billions) | 59.1 | 61.2 | 61.5 |
| 30+ Days Past Due (%) | 1.0% | 1.0% | 1.0% |
| Net Write-off Rate - Principal Only (%) | 1.4% | 1.3% | 1.4% |
American Express Credit Account Master Trust (Lending Trust)
| Metric | Oct 25 - Nov 24, 2014 | Nov 25 - Dec 25, 2014 | Dec 26 - Jan 25, 2015 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | 27.7 | 29.5 | 28.1 |
| Defaulted Amount ($ Billions) | 0.05 | 0.05 | 0.05 |
| Annualized Default Rate, Net of Recoveries (%) | 1.4% | 1.3% | 1.4% |
| Total 30+ Days Delinquent ($ Billions) | 0.3 | 0.3 | 0.3 |
Material Changes and Accounting Adjustments
Beginning in January 2015, the Company changed the timing of charge-offs for loans in certain modification programs from 180 days past due to 120 days past due. This accounting change impacted the reported rates for January 2015:
- USCS Net Write-off Rate: Reported at 1.4% for January 2015. Excluding the impact of the timing change, the rate was 1.3%.
- Lending Trust Default Rate: Reported at 1.4% for the period ending January 25, 2015. Excluding the impact of the timing change, the rate was 1.3%.
The filing notes that the Lending Trust portfolio does not possess identical characteristics to the total USCS portfolio due to differences in loan mix, vintage, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future performance, or specific risk factors beyond the disclosure of the accounting change. The document serves strictly to disclose historical credit performance statistics.
Key Facts for Investor Verification
- Verify the impact of the January 2015 accounting change (180 to 120 days past due) on the reported write-off and default rates.
- Compare the reported USCS total portfolio statistics against the Lending Trust Form 10-D reports, noting the filing explicitly states these may differ due to portfolio composition and calculation methods.
- Monitor the stability of the 30+ days past due ratio, which remained flat at 1.0% across all three reported months for the USCS segment.
- Confirm that the "Net write-off rate" for USCS is based on principal only, excluding interest and fees.