Business Context and Reporting Period
This Form 8-K filing by American Express Company, dated June 17, 2013, provides Regulation FD disclosure regarding credit performance statistics. The report focuses on the U.S. Card Services (USCS) operating segment for the months ended March 31, April 30, and May 31, 2013. It also includes comparative data for the American Express Credit Account Master Trust (Lending Trust) for its three most recent monthly reporting periods.
Key Financial Metrics
U.S. Card Services (USCS) Portfolio
| Metric | March 31, 2013 | April 30, 2013 | May 31, 2013 |
|---|---|---|---|
| Total Loans ($ Billions) | $53.6 | $53.4 | $54.2 |
| Average Loans ($ Billions) | $53.0 | $53.5 | $53.8 |
| 30+ Days Past Due (% of Total) | 1.2% | 1.1% | 1.1% |
| Net Write-off Rate (Principal Only) | 2.0% | 2.1% | 1.9% |
Lending Trust Portfolio
| Metric | Feb 23 - Mar 25, 2013 | Mar 26 - Apr 24, 2013 | Apr 25 - May 24, 2013 |
|---|---|---|---|
| Ending Total Principal Balance ($ Billions) | $29.6 | $29.5 | $29.4 |
| Defaulted Amount, Net of Recoveries ($ Billions) | $0.1 | $0.1 | $0.1 |
| Annualized Default Rate, Net of Recoveries | 2.0% | 2.2% | 2.1% |
| Total 30+ Days Delinquent ($ Billions) | $0.4 | $0.4 | $0.4 |
Material Changes and Trends
- USCS Loan Growth: Total loans in the USCS segment increased from $53.4 billion in April to $54.2 billion in May 2013.
- Delinquency Stability: The percentage of loans 30 days past due in the USCS segment improved slightly from 1.2% in March to 1.1% in April and remained stable at 1.1% in May.
- Write-off Fluctuation: The USCS net write-off rate (principal only) rose to 2.1% in April before declining to 1.9% in May.
- Lending Trust Balance: The Lending Trust's ending principal balance showed a slight downward trend, decreasing from $29.6 billion to $29.4 billion over the reported periods.
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 USCS portfolio).
- Differences in reporting periods (calendar month for USCS vs. specific monthly periods for the Lending Trust).
- Calculation methodologies (end-of-period balances for the Lending Trust vs. average balances for USCS).
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 total USCS portfolio and the securitized Lending Trust portfolio when analyzing credit quality.
- Confirm the trend in net write-off rates for the USCS segment, noting the improvement in May 2013.
- Review the Lending Trust's Form 10-D filings for granular details on the securitized portion of the portfolio.
- Monitor the stability of the 30+ days delinquent rate, which has held steady at 1.1% for two consecutive months in the USCS segment.