creditperformance.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): March 15, 2010
AMERICAN
EXPRESS COMPANY
(Exact
name of registrant as specified in its charter)
New York
|
13-4922250
|
1-7657
|
(State
or other jurisdiction
of
incorporation
or
organization)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
200
Vesey Street, World Financial Center
New
York, New York
|
10285
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(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (212)
640-2000
_____________________________________________________________
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
7.01
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Regulation
FD Disclosure
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American
Express Company (the “Company”) is hereby furnishing below delinquency and
write-off statistics for the lending portfolio of its U.S. Card Services
(“USCS”) operating segment for the months ended December 31, 2009, and January
31 and February 28, 2010.
The
increase in the net write-off rate reported for February 2010 is consistent with
the Company’s previous disclosure that monthly USCS lending net write-off rates
could increase sequentially during the first quarter of 2010. As the
Company has also previously disclosed, assuming past-due trends, recoveries and
bankruptcies remain consistent with levels in the third and fourth quarters of
2009, the Company would expect that the USCS lending net write-off rate for the
first quarter of 2010 will be similar to that for the fourth quarter of 2009,
and that the net write-off rate for the second quarter of 2010 will be lower
than that for the first quarter.
American
Express Company
U.S.
Card Services
Delinquency
and Write-off Rate Statistics
As
of and for the months ended December 31, 2009, and January 31 and February 28,
2010
(Billions,
except percentages)
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Dec
31,
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Jan.
31,
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Feb
28,
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|
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2009
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|
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2010
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2010
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Cardmember
lending – Total portfolio (A):
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|
|
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Total
Loans
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$
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52.6
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$
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50.9
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$
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49.2
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30 days
past due loans as a % of total
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|
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3.7
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%
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|
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3.6
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%
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3.6
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%
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Average
loans
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$
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52.0
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$
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51.7
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$
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50.1
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Net
write-off rate
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|
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7.1
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%
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|
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7.0
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%
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7.4
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%
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|
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Cardmember
lending – Non-securitized portfolio (B):
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Total
Loans
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$
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23.5
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30 days
past due loans as a % of total
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3.7
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%
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Average
loans
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$
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23.0
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Net
write-off rate
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7.4
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%
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(A)
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“Total
portfolio” is a GAAP basis measurement as of January 1, 2010, and reflects
all cardmember loans, including non-securitized cardmember loans and
securitized cardmember loans. Prior to the consolidation of
securitized loans in the Company’s consolidated balance sheet on January
1, 2010, the Company referred to the total portfolio as the “managed
basis” presentation.
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(B)
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“Non-securitized
portfolio” reflects cardmember loans that have not been securitized
through the American Express Credit Account Master Trust. Prior
to January 1, 2010, the non-securitized portfolio, which the Company
formerly referred to as the “owned basis” presentation, reflected GAAP for
purposes of financial reporting. Generally, the Company will no
longer report metrics relating solely to the non-securitized portfolio
commencing with information being reported for January 2010 and
thereafter.
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The
statistics presented above provide information that is additional to the data
reported by the American Express Credit Account Master Trust (the “Lending
Trust”) in its monthly Form 10-D report filed with the Securities and Exchange
Commission (the "Commission"). The loans that have been securitized
through the Lending Trust do not possess identical characteristics with those of
the total portfolio of USCS loans, which reflects the aggregate of securitized
and non-securitized loans. Thus, the reported credit performance of
the Lending Trust may, on a month-to-month basis, be better or worse than the
credit performance of the total portfolio. Reported differences may
arise as a result of, among other things, differences in the mix and vintage of
loans between the Lending Trust and the total portfolio (including, among other
things, the larger proportion of small business loans in the non-securitized
portion of the total portfolio), the number of days in the reporting period
covered by the Form 10-D being filed by the Lending Trust, the use of
end-of-period principal loan balances to calculate write-off statistics in the
Lending Trust compared to the use of average loan balances over the reporting
period used in the total portfolio statistics, as well as other mechanics of the
calculation for the total portfolio net write-off rate, which is impacted by the
additions, issuances and maturities relating to the securitization trust within
a particular period. In addition, the reporting period for the total
portfolio is based on a calendar month, as compared to the reporting period
covered by the Form 10-D reports for the Lending Trust, which is generally based
on a monthly period beginning on or around the 25th day of each calendar
month.
Set forth
below is certain information regarding the credit performance of the Lending
Trust for its three most recent monthly reporting periods, as reported in its
Form 10-D report filed with respect to each such period. The increase
in the annualized default rate, net of recoveries, for the reporting period
ended February 22, 2010, was due in part to the impact of the smaller
number of days during such reporting period (28 days) on the calculation of such
metric as compared to the prior reporting period (32 days).
American
Express Credit Account Master Trust
(Billions,
except percentages)
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Nov.
25, 2009
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Dec.
25, 2009
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Jan.
26, 2010
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through
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through
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through
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Dec.
24, 2009
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Jan.
25, 2010
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Feb.
22, 2010
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Ending
total principal balance
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$
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35.5
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$
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34.3
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$
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33.1
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Defaulted
amount, net of recoveries
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$
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0.2
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$
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0.2
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$
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0.2
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Annualized
default rate, net of recoveries
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6.9
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%
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6.8
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%
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7.8
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%
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Total
30+ days delinquent
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$
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1.4
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$
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1.3
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$
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1.3
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Forward-Looking
Statements
This
report includes forward-looking statements, which are subject to risks and
uncertainties. Forward-looking statements contain words such as
“believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,”
“will,” “may,” “should,” “could,” “would,” “likely” and similar
expressions. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date on which they
are made. The Company undertakes no obligation to update or revise
any forward-looking statements. Factors that could cause actual
results to differ materially from these forward-looking statements include, but
are not limited to, the following: the Company's ability to manage
credit risk related to consumer and small business loans and other credit
trends, which will depend in part on the economic environment, including, among
other things, the housing market, the rates of bankruptcies and unemployment,
which can affect spending on card products and debt payments by individuals and
small business customers, and on the effectiveness of the Company's credit
models; the impact of the Company's efforts to deal with delinquent cardmembers
in the current challenging economic environment, which may affect payment
patterns of cardmembers, the actual level of cardmember delinquencies in the
future and the perception of the Company's services, products and brand; and the
Company's near-term write-off rates, including those for the first and second
quarters of 2010, which will depend in part on changes in the level of the
Company's loan balances, delinquency rates of cardmembers, recoveries,
bankruptcy filings and unemployment rates. A further description of
these and other risks and uncertainties can be found in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2009, and its other reports
filed with the Commission.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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AMERICAN
EXPRESS COMPANY
(REGISTRANT)
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By: /s/ Carol V. Schwartz
Name: Carol
V. Schwartz
Title:
Secretary
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Date: March
15, 2010