Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated October 15, 2013, 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 July 31, August 31, and September 30, 2013, as well as the three-month period ended September 30, 2013.
Key Financial Metrics
The filing details credit performance metrics for the USCS total portfolio and the American Express Credit Account Master Trust (Lending Trust).
USCS Total Portfolio (Cardmember Lending)
| Metric | July 31, 2013 | August 31, 2013 | Sept 30, 2013 (Prelim) | 3 Months Ended Sept 30, 2013 |
|---|---|---|---|---|
| Total Loans ($ Billions) | 54.6 | 55.0 | 54.5 | 54.5 |
| 30 Days Past Due (% of Total) | 1.1% | 1.0% | 1.1% | 1.1% |
| Average Loans ($ Billions) | 54.6 | 54.8 | 54.7 | 54.7 |
| Net Write-off Rate (Principal Only) | 1.8% | 1.7% | 1.7% | 1.7% |
Lending Trust (Securitized Portfolio)
| Metric | June 25 - July 25, 2013 | July 26 - Aug 25, 2013 | Aug 26 - Sept 24, 2013 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | 29.4 | 29.5 | 29.0 |
| Defaulted Amount, Net of Recoveries ($ Billions) | 0.1 | 0.1 | 0.1 |
| Annualized Default Rate, Net of Recoveries | 1.9% | 1.8% | 1.8% |
| Total 30+ Days Delinquent ($ Billions) | 0.3 | 0.3 | 0.3 |
Material Changes and Comparisons
For the USCS total portfolio, the net write-off rate stabilized at 1.7% for August and September 2013, down slightly from 1.8% in July. The 30-day delinquency rate remained steady at 1.1% for July and September, with a slight dip to 1.0% in August. Total loan balances fluctuated slightly, ending at $54.5 billion in September after peaking at $55.0 billion in August.
The filing notes that the Lending Trust's credit performance may differ from the total USCS portfolio due to differences in loan mix (including a larger proportion of small business loans in the non-securitized portion), vintage, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Management Commentary and Risks
Management clarifies that the statistics presented are based on the USCS operating segment's total portfolio of cardmember loans determined in accordance with U.S. GAAP, including both securitized and non-securitized loans. The filing explicitly states that the Lending Trust's reported credit performance may be better or worse than the total portfolio on a month-to-month basis due to structural differences in the reporting periods and loan characteristics.
The filing does not provide specific guidance, outlook, or discussion of unusual items beyond the statistical disclosure.
Investor Verification Checklist
- Verify the distinction between the USCS total portfolio metrics and the Lending Trust (securitized) metrics, as they are not directly comparable.
- Confirm the stability of the net write-off rate at 1.7% for the trailing three months.
- Review the Form 10-D reports filed by the American Express Credit Account Master Trust for detailed securitized loan performance.
- Note that the September 30, 2013 data for the USCS total portfolio is marked as preliminary.