8-K: Amex Q3 Loan Performance: Delinquencies Rise, Write-offs Dip

American Express reports mixed U.S. Card Member loan performance for Q3 2025, with consumer delinquencies slightly up but write-off rates improving for both consumer and small business segments.

Summary

• U.S. Consumer Card Member total loans were $94.1 billion as of September 30, 2025, with 30 days past due loans at 1.4% and a net write-off rate of 1.9%.
• U.S. Small Business Card Member total loans stood at $30.7 billion as of September 30, 2025, with 30 days past due loans at 1.6% and a net write-off rate of 2.5%.
• Total Card Member loans held for investment (U.S. Consumer and Small Business) amounted to $124.8 billion as of September 30, 2025.
• The American Express Credit Account Master Trust reported an ending total principal balance of $25.0 billion for September 2025, with an annualized default rate, net of recoveries, of 1.3%.
• For the three months ended September 30, 2025, the average U.S. Consumer loans were $93.8 billion with a 1.4% 30 days past due rate and a 2.0% net write-off rate.
• For the three months ended September 30, 2025, the average U.S. Small Business loans were $30.5 billion with a 1.6% 30 days past due rate and a 2.6% net write-off rate.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly mixed. While write-off rates improved for both consumer and small business segments in September, consumer delinquencies saw a slight increase, and the annualized default rate for the Lending Trust also rose, indicating some areas of deteriorating credit quality alongside improvements.

Positives

• U.S. Consumer Card Member net write-off rate improved slightly to 1.9% in September 2025 from 2.0% in August and July 2025.
• U.S. Small Business Card Member net write-off rate improved to 2.5% in September 2025 from 2.7% in August and July 2025.

Negatives

• U.S. Consumer Card Member 30 days past due loans as a percentage of total increased to 1.4% in September 2025 from 1.3% in August and July 2025.
• The American Express Credit Account Master Trust's annualized default rate, net of recoveries, increased to 1.3% in September 2025 from 1.2% in August 2025 and 1.1% in July 2025.

Risks

• The reported credit performance of the Lending Trust may vary month-to-month due to differences in the mix, vintage, and aging of loans compared to the total U.S. Consumer or U.S. Small Business Card Member loan portfolios.
• Variability in statistics for loan portfolios and the Lending Trust can occur due to factors such as the number of days in a month, timing of holidays and weekends, seasonality, and the timing of information received from third parties.
• The calculation mechanics for the Lending Trust net write-off rate, which uses end-of-period principal balances and is impacted by additions to the Trust, differ from the average loan balances used for U.S. Consumer and Small Business portfolios.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance beyond the reported historical statistics.

Industry Context

The reported credit performance metrics for American Express's U.S. Consumer and Small Business Card Member loans provide insight into the health of consumer and small business credit within the broader financial services industry. While write-off rates show some improvement, the slight uptick in consumer delinquencies and the rising default rate in the securitized trust suggest ongoing vigilance is required in credit risk management, reflecting potential macroeconomic pressures or shifts in borrower behavior.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to global benchmarks, focusing solely on American Express's internal credit performance data.

Stakeholder Impact

• Shareholders: Credit performance directly impacts the company's profitability and asset quality, influencing investor perception and share value.
• Card Members (Customers): Changes in delinquency and write-off rates reflect the financial health and repayment capabilities of the customer base, potentially impacting future credit offerings and terms.

Key Dates

Recommendation

A 'hold' recommendation is appropriate given the mixed credit performance data. While improved write-off rates for both consumer and small business segments are positive, the slight increase in consumer delinquencies and the rising annualized default rate in the Lending Trust present offsetting concerns. Without further context on management's outlook or broader economic trends, the current data does not strongly indicate a 'buy' or 'sell' position, suggesting investors should maintain their current holdings and monitor future credit quality reports.

Keywords

American Express, AXP, Credit Performance, Delinquency Rates, Write-off Rates, Consumer Loans, Small Business Loans, SEC Filing, Financial Metrics, Credit Quality