Business Context and Reporting Period
This Form 8-K filing by American Express Company (the "Company") was submitted on January 15, 2014, pursuant to Regulation FD. The report provides supplemental delinquency and write-off statistics for the U.S. Card Services ("USCS") operating segment. The data covers the months ended October 31, November 30, and December 31, 2013, as well as the three-month period ended December 31, 2013.
Key Financial Metrics
The filing focuses exclusively on credit performance metrics for the USCS lending portfolio and the American Express Credit Account Master Trust ("Lending Trust"). It does not report consolidated revenue, profit, cash flow, or liquidity metrics.
USCS Card Member Lending Portfolio
| Metric | Oct 31, 2013 | Nov 30, 2013 | Dec 31, 2013 (Prelim) | 3 Months Ended Dec 31, 2013 |
|---|---|---|---|---|
| Total Loans ($ Billions) | 54.9 | 55.6 | 58.4 | 58.4 |
| Average Loans ($ Billions) | 54.7 | 55.3 | 57.0 | 55.8 |
| 30+ Days Past Due (% of Total) | 1.1% | 1.1% | 1.1% | 1.1% |
| Net Write-off Rate (Principal Only) | 1.5% | 1.6% | 1.6% | 1.5% |
Lending Trust Performance
| Metric | Sept 25 - Oct 25, 2013 | Oct 26 - Nov 24, 2013 | Nov 25 - Dec 25, 2013 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | 28.8 | 28.9 | 30.7 |
| Defaulted Amount, Net of Recoveries ($ Billions) | 0.1 | 0.1 | 0.1 |
| Annualized Default Rate, Net of Recoveries | 1.6% | 1.6% | 1.7% |
| Total 30+ Days Delinquent ($ Billions) | 0.4 | 0.4 | 0.4 |
Material Changes and Comparisons
For the USCS portfolio, total loans increased from $54.9 billion in October to $58.4 billion in December 2013. The 30+ days past due ratio remained stable at 1.1% across all reported months. The net write-off rate fluctuated slightly between 1.5% and 1.6% during the period.
For the Lending Trust, the ending principal balance grew from $28.8 billion to $30.7 billion over the three reporting periods. The annualized default rate increased marginally to 1.7% in the period ending December 25, 2013, compared to 1.6% in the prior two periods.
Management Commentary and Risks
The Company notes that the USCS statistics include both securitized and non-securitized loans, whereas the Lending Trust reports only cover securitized loans. Consequently, credit performance metrics may differ between the two due to:
- Differences in loan mix and vintage (e.g., a larger proportion of small business loans in the non-securitized portfolio).
- Differences in reporting periods (calendar month for USCS vs. ~25th to ~25th for the Trust).
- Calculation mechanics, specifically the use of end-of-period balances for the Trust versus average balances for the total portfolio.
The filing does not provide specific forward-looking guidance, outlook, or discussion of unusual items beyond the statistical data.
Investor Verification Checklist
- Verify the distinction between the total USCS portfolio (securitized + non-securitized) and the Lending Trust (securitized only) when analyzing credit risk.
- Confirm the stability of the 1.1% delinquency rate against broader economic conditions for the fourth quarter of 2013.
- Review the slight increase in the Lending Trust's annualized default rate (1.6% to 1.7%) for potential trends in the securitized portion of the portfolio.
- Note that write-off rates are calculated on principal only, excluding interest and fees.