Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on March 15, 2023, under Item 7.01 Regulation FD Disclosure. The report provides delinquency and write-off statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended February 28, 2023, January 31, 2023, and December 31, 2022. It also includes credit performance data for the American Express Credit Account Master Trust (Lending Trust) for the same periods.
Key Financial Metrics
U.S. Consumer and Small Business Card Member Loans
| Metric | Feb 28, 2023 | Jan 31, 2023 | Dec 31, 2022 |
|---|---|---|---|
| Total Loans (Billions) | $92.7 | $93.2 | $94.1 |
| Consumer Total Loans | $70.7 | $71.3 | $72.7 |
| Small Business Total Loans | $22.0 | $21.9 | $21.4 |
| Consumer 30+ Days Past Due % | 1.1% | 1.0% | 1.0% |
| Small Business 30+ Days Past Due % | 1.1% | 1.0% | 0.9% |
| Consumer Net Write-off Rate | 1.4% | 1.5% | 1.2% |
| Small Business Net Write-off Rate | 1.1% | 1.2% | 1.0% |
Lending Trust Performance
| Metric | Feb 2023 | Jan 2023 | Dec 2022 |
|---|---|---|---|
| Ending Principal Balance (Billions) | $25.5 | $26.1 | $27.2 |
| Defaulted Amount (Billions) | $0.03 | $0.03 | $0.03 |
| Annualized Default Rate (Net) | 1.0% | 0.9% | 0.7% |
| Total 30+ Days Delinquent (Billions) | $0.2 | $0.2 | $0.2 |
Material Changes
- Loan Balances: Total Card Member loans decreased from $94.1 billion in December 2022 to $92.7 billion in February 2023. Consumer loans declined from $72.7 billion to $70.7 billion, while Small Business loans increased slightly from $21.4 billion to $22.0 billion.
- Delinquency Trends: The percentage of loans 30 days past due increased for both Consumer (1.0% to 1.1%) and Small Business (0.9% to 1.1%) portfolios from December 2022 to February 2023.
- Write-off Rates: Net write-off rates (principal only) rose for both segments. Consumer rates moved from 1.2% in December 2022 to 1.4% in February 2023. Small Business rates moved from 1.0% to 1.1% over the same period.
- Lending Trust Defaults: The annualized default rate for the Lending Trust increased from 0.7% in December 2022 to 1.0% in February 2023.
Guidance, Outlook, and Risks
This filing does not contain forward-looking guidance, management commentary on future outlook, or specific risk factors beyond the presentation of historical credit performance data. The filing notes that the credit performance of the Lending Trust may differ from the total U.S. Consumer or Small Business portfolios due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances).
Investor Verification Checklist
- Verify the trend of increasing net write-off rates in both Consumer and Small Business portfolios against broader economic indicators.
- Compare the Lending Trust's annualized default rate (1.0%) with the Company's reported net write-off rates to understand the impact of securitization on reported credit quality.
- Monitor the divergence between the declining total loan balances and the rising delinquency percentages.
- Review the subsequent Form 10-D filings for the Lending Trust to track the consistency of the $0.03 billion defaulted amount.