Business Context and Reporting Period
This Form 8-K, filed on July 15, 2013, 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 April 30, May 31, and June 30, 2013, as well as the three-month period ended June 30, 2013.
Key Financial Metrics
U.S. Card Services (USCS) Portfolio
| Metric | April 30, 2013 | May 31, 2013 | June 30, 2013 (Preliminary) | Three Months Ended June 30, 2013 |
|---|---|---|---|---|
| Total Loans ($ Billions) | 53.4 | 54.2 | 54.6 | 54.6 |
| Average Loans ($ Billions) | 53.5 | 53.8 | 54.4 | 54.0 |
| 30 Days Past Due (% of Total) | 1.1% | 1.1% | 1.1% | 1.1% |
| Net Write-off Rate (Principal Only) | 2.1% | 1.9% | 1.9% | 2.0% |
American Express Credit Account Master Trust (Lending Trust)
| Metric | Mar 26 - Apr 24, 2013 | Apr 25 - May 24, 2013 | May 25 - Jun 24, 2013 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | 29.5 | 29.4 | 29.6 |
| Defaulted Amount, Net of Recoveries ($ Billions) | 0.1 | 0.1 | 0.1 |
| Annualized Default Rate, Net of Recoveries | 2.2% | 2.1% | 2.0% |
| Total 30+ Days Delinquent ($ Billions) | 0.4 | 0.4 | 0.3 |
Material Changes and Trends
- Portfolio Growth: Total loans in the USCS segment increased from $53.4 billion in April to $54.6 billion in June 2013.
- Delinquency Stability: The 30 days past due ratio remained flat at 1.1% across all three months reported for the USCS segment.
- Write-off Improvement: The USCS net write-off rate (principal only) improved from 2.1% in April to 1.9% in May and June, resulting in a 2.0% rate for the quarter.
- Lending Trust Trends: The Lending Trust showed a slight improvement in the annualized default rate, declining from 2.2% to 2.0% over the three reporting periods, while total 30+ days delinquent amounts decreased from $0.4 billion to $0.3 billion.
Management Commentary and Risks
The filing clarifies that USCS statistics include both securitized and non-securitized cardmember loans, whereas the Lending Trust reports only on securitized loans. Management notes that credit performance between the two may differ due to:
- Differences in loan mix and vintage (e.g., a larger proportion of small business loans in the non-securitized portion).
- Differences in reporting periods (calendar month for USCS vs. specific monthly periods for the Trust).
- Calculation mechanics, specifically the use of end-of-period balances for the Trust versus average loan balances for the total portfolio.
The filing does not provide specific guidance, outlook, or discussion of unusual items beyond the statistical disclosure.
Key Facts for Investor Verification
- Verify the distinction between the total USCS portfolio performance and the Lending Trust performance, as they are not directly comparable due to portfolio composition and calculation methods.
- Confirm the stability of the 1.1% delinquency rate against broader economic conditions for the second quarter of 2013.
- Monitor the trend of the net write-off rate, which has stabilized at 1.9% for the most recent two months.
- Note that the Lending Trust data is based on periods ending around the 24th of the month, not calendar month-ends.