Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated September 15, 2014, serves as a Regulation FD disclosure. It provides delinquency and write-off statistics for the U.S. Card Services (USCS) operating segment's lending portfolio for the months ended June 30, July 31, and August 31, 2014.
Key Financial Metrics
U.S. Card Services (USCS) Total Portfolio
| Metric | June 30, 2014 | July 31, 2014 | August 31, 2014 |
|---|---|---|---|
| Total Loans ($ Billions) | $57.7 | $57.8 | $58.5 |
| Average Loans ($ Billions) | $57.6 | $57.8 | $58.2 |
| 30 Days Past Due (% of Total) | 0.9% | 0.9% | 0.9% |
| Net Write-off Rate (Principal Only) | 1.5% | 1.5% | 1.5% |
American Express Credit Account Master Trust (Lending Trust)
| Metric | May 26 - June 24, 2014 | June 25 - July 25, 2014 | July 26 - Aug 25, 2014 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | $28.3 | $28.0 | $28.2 |
| Defaulted Amount, Net of Recoveries ($ Billions) | $0.1 | $0.1 | $0.1 |
| Annualized Default Rate, Net of Recoveries | 1.6% | 1.6% | 1.5% |
| Total 30+ Days Delinquent ($ Billions) | $0.3 | $0.3 | $0.3 |
Material Changes and Comparisons
The filing indicates stability in credit performance metrics across the reported months. For the USCS total portfolio, the 30-day delinquency rate and net write-off rate remained constant at 0.9% and 1.5%, respectively, from June through August 2014. Total loans showed a slight increase from $57.7 billion to $58.5 billion over the period.
For the Lending Trust, the annualized default rate improved slightly from 1.6% to 1.5% in the most recent reporting period, while the defaulted amount remained steady at $0.1 billion.
Management Commentary and Risks
The filing clarifies that the USCS total portfolio statistics include both securitized and non-securitized loans, whereas the Lending Trust reports only on securitized loans. Management notes that the credit performance of the Lending Trust may differ from the total portfolio on a month-to-month basis due to:
- Differences in the mix and vintage of loans (e.g., a larger proportion of small business loans in the non-securitized portion).
- Differences in reporting periods (calendar month for total portfolio vs. ~25th to ~25th for the Trust).
- Differences in calculation mechanics (end-of-period balances for the Trust vs. average balances for the total portfolio).
Investor Verification Checklist
- Verify the distinction between the USCS total portfolio and the Lending Trust securitized portfolio when analyzing credit quality.
- Confirm that the net write-off rate of 1.5% applies to principal only, excluding interest and fees.
- Review the corresponding Form 10-D filings for the Lending Trust to compare specific monthly reporting periods.
- Note that the filing does not provide revenue, profit, cash flow, or debt figures for the broader company.