American Express Company

02/06/2026 | Press release | Distributed by Public on 02/06/2026 11:32

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
EXECUTIVE OVERVIEW
BUSINESS INTRODUCTION
We are a global payments and premium lifestyle brand powered by technology with four reportable operating segments: U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). Corporate functions and certain other businesses and operations are included in Corporate & Other.
Our range of products and services includes:
•Credit and charge cards and complementary products and services, including travel, dining, lifestyle and expense management products and services
•Banking and other payment and financing products and services, including deposits and non-card lending
•Merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services
•Network services
The following types of revenue are generated from our various products and services:
•Discount revenue, our largest revenue source, primarily represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express. The amount of fees charged for accepting our cards as payment, or merchant discount, varies with, among other factors, the industry in which the merchant conducts business, the merchant's overall American Express-related transaction volume, the method of payment, the settlement terms with the merchant, the method of submission of transactions and, in certain instances, the geographic scope for the card acceptance agreement between the merchant and us (e.g., local or global) and the transaction amount. In some instances, an additional flat transaction fee is assessed as part of the merchant discount, and additional fees may be charged such as a variable fee for card-not-present transactions or for transactions using cards issued outside the United States at merchants located in the United States;
•Interest income, principally represents interest earned on outstanding loan balances;
•Net card fees, represent revenue earned from annual card membership fees, which vary based on the type of card and the number of cards for each account; and
•Service fees and other revenue, primarily represent revenues related to network partnership agreements (comprising royalties, fees and amounts earned for facilitating transactions on cards issued by network partners), fees earned on alternative payment solutions facilitated by American Express, foreign currency-related fees charged to Card Members, loyalty coalition, merchant and other service fees, Card Member delinquency fees, travel commissions and fees, and income (losses) from our investments in which we have significant influence.
Refer to the "Glossary of Selected Terminology" below for the definitions of certain key terms and related information appearing within this Form 10-K and "Critical Accounting Estimates" below for a discussion of certain of our accounting policies requiring significant management assumptions and judgments.
NON-GAAP MEASURES
We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain information included within this report constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies.
Beginning in the third quarter of 2025, we ceased reporting Net interest yield on average Card Member loans, a non-GAAP measure that was computed by dividing adjusted net interest income by average Card Member loans, and began reporting (together with prior period comparative information) Net interest yield on average Total loans and Card Member receivables, a GAAP measure that represents net interest income divided by average Card Member loans, Card Members loans held for sale (HFS), Other loans and Card Member receivables. We believe that this new net interest yield metric reflects the evolution of our products over time, such as the expansion of lending features on our charge card portfolio. See Table 1 for more information.
TABLE 1: SUMMARY OF FINANCIAL PERFORMANCE
Years Ended December 31, Change Change
(Millions, except percentages, per share amounts and where indicated) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Selected Income Statement Data
Total revenues net of interest expense $ 72,229 $ 65,949 $ 60,515 $ 6,280 10 % $ 5,434 9 %
Total revenues net of interest expense (FX-adjusted) (a)
66,083 60,179 6,146 9 5,770 10
Provisions for credit losses
5,256 5,185 4,923 71 1 262 5
Total expenses
53,178 47,869 45,079 5,309 11 2,790 6
Pretax income 13,795 12,895 10,513 900 7 2,382 23
Income tax provision 2,962 2,766 2,139 196 7 627 29
Net income 10,833 10,129 8,374 704 7 1,755 21
Earnings per common share - diluted (b)
$ 15.38 $ 14.01 $ 11.21 $ 1.37 10 % $ 2.80 25 %
Selected Balance Sheet and Common Share Data
Cash and cash equivalents $ 47,792 $ 40,640 $ 46,596 $ 7,152 18 % $ (5,956) (13) %
Total loans and Card Member receivables (c)
224,791 208,317 193,492 16,474 8 14,825 8
Total loans and Card Member receivables (FX-adjusted) (a)(c)
211,043 190,826 13,748 7 17,491 9
Average Total loans and Card Member receivables
213,105 197,080 178,735 16,025 8 18,345 10
Customer deposits 152,488 139,413 129,144 13,075 9 10,269 8
Long-term debt $ 56,387 $ 49,715 $ 47,866 $ 6,672 13 % $ 1,849 4 %
Average common shares outstanding - diluted
696 713 736 (17) (2) % (23) (3) %
Cash dividends declared per common share $ 3.28 $ 2.80 $ 2.40 $ 0.48 17 % $ 0.40 17 %
Selected Metrics and Ratios
Network volumes (billions)
$ 1,897.0 $ 1,764.8 $ 1,680.1 $ 132 7 % $ 85 5 %
Billed business (billions)
1,669.8 1,550.9 1,459.6 $ 119 8 % $ 91 6 %
Billed business (billions)(FX-adjusted) (a)
$ 1,555.5 $ 1,453.1 $ 114 7 % $ 98 7 %
Net interest yield (d)
8.1% 7.9 % 7.3 %
Card Member loans and receivables
Net write-off rate - principal, interest and fees (e)
2.3 % 2.3 % 2.0 %
Net write-off rate - principal only - consumer and small business (e)(f)
2.0 % 2.0 % 1.8 %
30+ days past due as a % of total - consumer and small business (g)
1.3 % 1.3 % 1.3 %
Effective tax rate 21.5 % 21.5 % 20.3 %
Return on average equity (h)
33.9 % 34.6 % 31.5 %
Common Equity Tier 1 10.5 % 10.5 % 10.5 %
(a)The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency conversion into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared). FX-adjusted Total revenues net of interest expense and Total loans and Card Member receivables are non-GAAP measures. We believe the presentation of information on a foreign currency adjusted basis is helpful to investors by making it easier to compare our performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.
(b)Represents net income, less (i) earnings allocated to participating share awards of $74 million, $76 million and $64 million for the years ended December 31, 2025, 2024 and 2023, respectively, and (ii) dividends on preferred shares of $58 million for each of the years ended December 31, 2025, 2024 and 2023. Refer to Note 15 and Note 20 to the "Consolidated Financial Statements" for further details on preferred shares and earnings per common share (EPS), respectively.
(c)Total loans reflects Card Member loans and Other loans.
(d)Represents net interest income divided by average Card Member loans, Card Member loans HFS, Other loans and Card Member receivables.
(e)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(f)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(g)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 11 for 90+ days past billing metrics for corporate receivables.
(h)Return on average equity (ROE) is calculated by dividing (i) net income by (ii) average shareholders' equity.
BUSINESS PERFORMANCE
Our strong results for the year reflect the earnings power of our business model, driven by our premium, high credit-quality customer base and the greater scale and operating leverage we have achieved over the last several years, as well as the impact of strategic investments that strengthen our Membership Model and drive growth. We continued to see momentum across the business, with stable growth across Card Member spending and loans and strong growth in card fees, along with excellent credit performance. We launched our refreshed U.S. Consumer and Business Platinum Cards at the end of the third quarter and have seen strong customer demand and engagement. The continued global expansion of our merchant network contributed to our growth, as we added millions of new merchant locations globally in 2025 and continued to increase coverage across our top international countries. Net income for the year was $10.8 billion, or $15.38 per share, compared with net income of $10.1 billion, or $14.01 per share, a year ago, which included a $0.66 per share gain from the sale of Accertify Inc. (Accertify).
Billed business grew 8 percent year-over-year (7 percent on an FX-adjusted basis), reflecting broad-based growth across geographies and across both Goods & Services (G&S) and Travel & Entertainment (T&E) categories.1G&S spend, which accounts for over 70 percent of our total billed business, continued to be driven by robust retail spending, and T&E spend benefited from sustained strength in restaurants, our largest T&E category. U.S. Consumer Services billed business grew 8 percent, with continued momentum in spending by Millennial and Gen-Z Card Members, our fastest-growing cohorts, as our products continue to resonate with these younger customers. Commercial Services billed business grew 3 percent, reflecting continued modest growth from U.S. small and mid-sized enterprise (SME) Card Members. International Card Services billed business grew 14 percent, driven by continued strong growth in spend across geographies and customer types outside the United States. Overall transaction growth of 9 percent for the year reflects continued strong engagement from our customers.
Total revenues net of interest expense increased 10 percent (9 percent on an FX-adjusted basis).1Growth in billed business drove a 6 percent increase in Discount revenue, our largest revenue line. Net card fees increased 18 percent, reflecting high levels of new card acquisitions on fee-paying products, strong Card Member retention and our ongoing cycle of product refreshes. Net interest income grew 12 percent, primarily reflecting growth in balances and net yield expansion.
Total loans and Card Member receivables increased 8 percent, in line with growth in billed business. Credit performance was strong and stable throughout the year. Net write-off and delinquency rates remained best-in-class, supported by our premium customer base, our strong focus on risk management and disciplined growth strategy.
Card Member rewards, Card Member services and Business development expenses, which are generally driven by volumes and usage, collectively grew faster than revenues as a result of enhancements to our value propositions to drive Card Member engagement and acquisition and the mix shift towards premium products. Marketing expense increased 4 percent year-over-year as we continued to invest to acquire high-spending, high credit-quality customers. Operating expense grew at a slower pace than revenue even as we continued to invest in enterprise risk management capabilities and technology to support business growth. We remain focused on driving marketing and operating expense efficiencies over time.
During the year, we maintained our CET1 capital ratio within our target range of 10 to 11 percent and returned $7.6 billion of capital to our shareholders in the form of share repurchases and common stock dividends. We plan to continue to return to shareholders the excess capital we generate while managing our CET1 capital ratio within our target range and supporting balance sheet growth. We plan to increase the regular quarterly dividend on common shares outstanding by approximately 16 percent beginning with the first quarter 2026 dividend declaration. Our robust capital, funding and liquidity positions provide us with significant flexibility to maintain a strong balance sheet.
The resiliency of our differentiated business model and the strength and stability of our performance give us confidence to navigate evolving competition and a range of economic environments. While we recognize the uncertainty of the geopolitical and regulatory landscape, we continue to manage the company for the long term, focusing on backing our customers and colleagues, exercising disciplined expense management and strategically investing in our business.
See "Supervision and Regulation" under "Business" for information on legislative and regulatory changes that could have a material adverse effect on our results of operations and financial condition and "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" for information on potential impacts of macroeconomic, geopolitical and competitive conditions and certain litigation and regulatory matters on our business.
1 The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency conversion into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current period apply to the corresponding prior year period against which such results are being compared). FX-adjusted revenues is a non-GAAP measure. We believe the presentation of information on a foreign currency adjusted basis is helpful to investors by making it easier to compare our performance in one period to that of another period without the variability caused by fluctuations in currency exchange rates.
CONSOLIDATED RESULTS OF OPERATIONS
The discussions in both "Consolidated Results of Operations" and "Business Segment Results of Operations" provide commentary on the variances for the year ended December 31, 2025 compared to the year ended December 31, 2024, as presented in the accompanying tables. For a discussion of the financial condition and results of operations for 2024 compared to 2023, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 7, 2025.
Beginning in the first quarter of 2025, we made a presentation change to our Consolidated Statements of Income to consolidate Processed revenue within Service fees and other revenue and renamed Processed revenue to network partnership revenue. Prior period amounts have been recast to conform to the current period presentation; there was no impact to Total non-interest revenues. Refer to Note 17 to the "Consolidated Financial Statements" for additional information.
TABLE 2: TOTAL REVENUES NET OF INTEREST EXPENSE SUMMARY
Years Ended December 31, Change Change
(Millions, except percentages) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Discount revenue $ 37,401 $ 35,192 $ 33,416 $ 2,209 6 % $ 1,776 5 %
Net card fees 9,993 8,449 7,255 1,544 18 1,194 16
Service fees and other revenue 7,471 6,765 6,710 706 10 55 1
Total non-interest revenues 54,865 50,406 47,381 4,459 9 3,025 6
Total interest income 25,598 23,795 19,983 1,803 8 3,812 19
Total interest expense 8,234 8,252 6,849 (18) - 1,403 20
Net interest income 17,364 15,543 13,134 1,821 12 2,409 18
Total revenues net of interest expense $ 72,229 $ 65,949 $ 60,515 $ 6,280 10 % $ 5,434 9 %
TOTAL REVENUES NET OF INTEREST EXPENSE
Discount revenue increased, primarily driven by an increase in billed business of 8 percent, partially offset by lower average merchant discount rates due to shifts in geographic and merchant spend mix. See Tables 5 and 6 for more details on billed business performance.
Net card fees increased, primarily driven by growth in our premium card portfolios. See Table 5 for more details on proprietary new card acquisitions, proprietary cards-in-force and average fee per card.
Service fees and other revenue increased, primarily driven by higher foreign exchange-related revenues associated with Card Member cross-currency spending, a gain related to an equity transaction by GBTG, an equity method investee, resulting from its acquisition of CWT Holdings, LLC, and increases in network partnership revenue and loyalty coalition-related fees.
Interest income increased, primarily driven by growth in revolving loan balances, partially offset by lower interest rates.
Interest expense was relatively flat, primarily reflecting lower interest rates paid on customer deposits, offset by growth in customer deposits and long-term debt.
TABLE 3: PROVISIONS FOR CREDIT LOSSES SUMMARY
Years Ended December 31, Change Change
(Millions, except percentages) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Card Member loans
Net write-offs $ 3,868 $ 3,515 $ 2,486 $ 353 10 % $ 1,029 41 %
Reserve build (release) (a)
198 594 1,353 (396) (67) (759) (56)
Total 4,067 4,109 3,839 (42) (1) 270 7
Card Member receivables
Net write-offs 745 773 937 (28) (4) (164) (18)
Reserve build (release) (a)
7 1 (57) 6 # 58 #
Total 751 774 880 (23) (3) (106) (12)
Other
Net write-offs - Other loans
207 187 107 20 11 80 75
Net write-offs - Other receivables
20 44 25 (24) (55) 19 76
Reserve build (release) - Other loans (a)
128 69 67 59 86 2 3
Reserve build (release) - Other receivables (a)
59 2 5 57 # (3) (60)
Reserve build (release) - Other (a)
24 - - 24 - - -
Total 438 302 204 136 45 98 48
Total provisions for credit losses
$ 5,256 $ 5,185 $ 4,923 $ 71 1 % $ 262 5 %
# Denotes a variance of 100 percent or more
(a)Refer to the "Glossary of Selected Terminology" below for a definition of reserve build (release).
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses decreased, primarily due to a lower reserve build in the current year, partially offset by higher net write-offs. The reserve build in the current year was primarily driven by an increase in loans outstanding and deterioration in the macroeconomic outlook used in our reserve models, partially offset by the release of a reserve upon the reclassification of a small business cobrand portfolio to Card Member loans HFS from held for investment. The reserve build in the prior year was primarily driven by an increase in loans outstanding.
Card Member receivables provision for credit losses decreased, primarily due to lower net write-offs, partially offset by a reserve build in the current year. The reserve build in the current year was primarily driven by deterioration in the macroeconomic outlook used in our reserve models and an increase in receivables outstanding.
Other provision for credit losses increased, primarily due to a higher reserve build in the current year, partially offset by lower net write-offs. The reserve build in the current year was primarily related to partner obligations and an increase in loans outstanding.
TABLE 4: EXPENSES SUMMARY
Years Ended December 31, Change Change
(Millions, except percentages) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Card Member rewards
$ 18,409 $ 16,599 $ 15,367 $ 1,810 11 % $ 1,232 8 %
Business development 6,457 5,886 5,657 571 10 229 4
Card Member services 6,057 4,782 3,968 1,275 27 814 21
Marketing 6,252 6,040 5,213 212 4 827 16
Salaries and employee benefits 9,016 8,198 8,067 818 10 131 2
Other, net
6,987 6,364 6,807 623 10 (443) (7)
Total expenses $ 53,178 $ 47,869 $ 45,079 $ 5,309 11 % $ 2,790 6 %
EXPENSES
Card Member rewards expense increased, driven by increases in Membership Rewards and cash back rewards expenses, collectively, of $1,234 million, and cobrand rewards expense of $576 million, all of which were primarily driven by higher billed business. The increase in Membership Rewards expense was also driven by a benefit in the prior year from enhancements to the models that estimate future redemptions of Membership Reward points by U.S. Card Members. The increase in cash back rewards expense also reflected the impact associated with a card product migration.
The Membership Rewards Ultimate Redemption Rate (URR) for current program participants was 96 percent (rounded down) at both December 31, 2025 and 2024.
Business development expense increased, primarily due to increased partner payments and higher client incentives, both of which were driven by higher network volumes.
Card Member services expense increased, primarily due to higher usage of Card Member benefits and the introduction of new U.S. Platinum benefits.
Marketing expense increased, primarily due to higher levels of spending on customer acquisition and brand advertising.
Salaries and employee benefits expense increased, primarily driven by higher compensation and incentive costs.
Other expenses increased, primarily driven by the gain recognized in the prior year on the sale of Accertify, higher professional services and technology costs, partially offset by a prior-year increase in legal reserves and a prior-year charge associated with an increase in international non-income tax reserves.
INCOME TAXES
The effective tax rate was 21.5 percent for both 2025 and 2024, primarily reflecting the continued implementation of the global minimum tax offset by discrete tax benefits in the current period.
TABLE 5: SELECTED CARD-RELATED STATISTICAL INFORMATION
Change Change
Years Ended December 31, 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Network volumes (billions)
$ 1,897.0 $ 1,764.8 $ 1,680.1 7 % 5 %
Billed business $ 1,669.8 $ 1,550.9 $ 1,459.6 8 6
Cards-in-force (millions)
152.8 146.5 141.2 4 4
Proprietary cards-in-force 86.6 83.6 80.2 4 4
Basic cards-in-force (millions)
128.9 123.3 118.7 5 4
Proprietary basic cards-in-force 66.7 64.3 61.7 4 4
Average proprietary basic Card Member spending (dollars)
$ 25,453 $ 24,608 $ 24,059 3 2
Average fee per card (dollars) (a)
$ 117 $ 103 $ 92 14 % 12 %
Proprietary new cards acquired (millions)
12.5 13.0 12.2
Discount revenue as a % of Billed business
2.24% 2.27% 2.29%
(a)Average fee per card is computed on an annualized basis based on proprietary Net card fees divided by average proprietary total cards-in-force.
TABLE 6: NETWORK VOLUMES-RELATED STATISTICAL INFORMATION
2025 2024
Year over Year Percentage Increase
(Decrease)
Percentage Increase (Decrease) Assuming No Changes in FX Rates(a)
Year over Year Percentage Increase
(Decrease)
Percentage Increase (Decrease)
Assuming No Changes in FX Rates(a)
Network volumes 7 % 7 % 5 % 6 %
Total billed business 8 7 6 7
U.S. Consumer Services 8 7
Commercial Services 3 3 2 2
International Card Services 14 13 11 14
Merchant industry billed business metrics
G&S spend (74% and 73% of billed business for 2025 and 2024, respectively)
8 8 7 6
T&E spend (26% and 27% of billed business for 2025 and 2024, respectively)
8 % 7 % 5 % 8 %
(a)The foreign currency adjusted information assumes a constant exchange rate between the periods being compared for purposes of conversion into U.S. dollars (i.e., assumes the foreign exchange rates used to determine results for the current year apply to the corresponding prior-year period against which such results are being compared).
TABLE 7: SELECTED CREDIT-RELATED STATISTICAL INFORMATION
As of or for the Years Ended December 31, Change Change
(Millions, except percentages)
2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Card Member loans and receivables:
Card Member loans and receivables $ 213,863 $ 199,085 $ 186,406 7 % 7 %
Average Card Member loans and receivables $ 202,975 $ 188,971 $ 172,473 7 % 10 %
Net write-off rate - principal, interest and fees (a)
2.3 % 2.3 % 2.0 %
Net write-off rate - principal only - consumer and small business (a)(b)
2.0 % 2.0 % 1.8 %
30+ days past due as a % of total - consumer and small business (c)
1.3 % 1.3 % 1.3 %
Card Member loans:
Card Member loans
$ 151,832 $ 139,674 $ 125,995 9 % 11 %
Credit loss reserves:
Beginning balance $ 5,679 $ 5,118 $ 3,747 11 37
Provisions - principal, interest and fees 4,067 4,109 3,839 (1) 7
Net write-offs - principal less recoveries (3,176) (2,894) (2,043) 10 42
Net write-offs - interest and fees
(692) (621) (443) 11 40
Other (d)
31 (33) 18 # #
Ending balance $ 5,909 $ 5,679 $ 5,118 4 11
% of loans 3.9 % 4.1 % 4.1 %
% of past due 279 % 288 % 297 %
Net write-off rate - principal, interest and fees (a)
2.7 % 2.7 % 2.2 %
Net write-off rate - principal only (a)
2.2 % 2.2 % 1.8 %
30+ days past due as a % of total
1.4 % 1.4 % 1.4 %
Card Member receivables:
Card Member receivables
$ 62,031 $ 59,411 $ 60,411 4 (2)
Credit loss reserves:
Beginning balance $ 171 $ 174 $ 229 (2) (24)
Provisions - principal and fees
751 774 880 (3) (12)
Net write-offs - principal and fees less recoveries
(745) (773) (937) (4) (18)
Other (d)
3 (4) 2 # #
Ending balance $ 180 $ 171 $ 174 5 % (2) %
% of receivables 0.3 % 0.3 % 0.3 %
Net write-off rate - principal and fees (a)
1.2 % 1.3 % 1.6 %
Net write-off rate - principal only - consumer and small business (a)(b)
1.4 % 1.5 % 1.8 %
30+ days past due as a % of total - consumer and small business (c)
0.9 % 0.9 % 1.1 %
# Denotes a variance of 100 percent or more
(a)We present a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, as our practice is to include uncollectible interest and/or fees as part of our total provision for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
(b)A net write-off rate based on principal losses only is not available for corporate receivables due to system constraints.
(c)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. Refer to Table 11 for 90+ days past billing metrics for corporate receivables.
(d)Other includes foreign currency translation adjustments.
BUSINESS SEGMENT RESULTS OF OPERATIONS
We consider a combination of factors when evaluating the composition of our reportable operating segments, including the results reviewed by the chief operating decision maker, economic characteristics, products and services offered, classes of customers, product distribution channels, geographic considerations (primarily United States versus outside the United States) and regulatory considerations. Refer to Note 23 to the "Consolidated Financial Statements" and "Business" for additional discussion of products and services that comprise each segment.
Results of the reportable operating segments generally treat each segment as a stand-alone business. The management reporting process that derives these results allocates revenue and expense using various methodologies as described below.
TOTAL REVENUES NET OF INTEREST EXPENSE
We allocate discount revenue and certain other revenues among segments using a transfer pricing methodology. Within the USCS, CS and ICS segments, discount revenue generally reflects the issuer component of the overall discount revenue generated by each segment's Card Members; within the GMNS segment, discount revenue generally reflects the network and acquirer component of the overall discount revenue being allocated.
Net card fees and Service fees and other revenues are generally directly attributable to the segment in which they are reported.
Interest and fees on loans and certain investment income is directly attributable to the segment in which it is reported. Interest expense represents an allocated funding cost based on a combination of segment funding requirements and internal funding rates.
PROVISIONS FOR CREDIT LOSSES
The provisions for credit losses are directly attributable to the segment in which they are reported.
EXPENSES
Card Member rewards, Business development, Card Member services and Marketing expenses are included in each segment based on the actual expenses incurred. Global brand advertising is primarily allocated to the segments based on the relative levels of revenue.
Salaries and employee benefits and other expenses reflect costs incurred directly within each segment, as well as allocated expenses. The allocated expenses include service costs, which primarily reflect salaries and benefits associated with our technology and customer servicing groups, and overhead expenses. Service costs are allocated based on activities directly attributable to the segment, and overhead expenses are allocated based on the relative levels of revenue and Card Member loans and receivables. As a proportion of Salaries and employee benefits and other expenses, allocated costs remain relatively consistent from period to period. Increases in expenses year-over-year driven by allocated costs primarily reflect the changes in salaries and employee benefit costs and other costs related to our technology or servicing organizations and the growth in business volume within our operating segments.
U.S. CONSUMER SERVICES
TABLE 8: USCS SELECTED INCOME STATEMENT DATA
Years Ended December 31, Change Change
(Millions, except percentages) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Revenues
Non-interest revenues $ 22,307 $ 20,137 $ 18,464 $ 2,170 11 % $ 1,673 9 %
Interest income 15,655 14,430 12,336 1,225 8 2,094 17
Interest expense 3,148 3,140 2,684 8 - 456 17
Net interest income 12,507 11,290 9,652 1,217 11 1,638 17
Total revenues net of interest expense 34,814 31,427 28,116 3,387 11 3,311 12
Provisions for credit losses 2,967 3,029 2,855 (62) (2) 174 6
Total revenues net of interest expense after provisions for credit losses 31,847 28,398 25,261 3,449 12 3,137 12
Expenses
Card Member rewards, business development and Card Member services
16,557 14,329 12,808 2,228 16 1,521 12
Marketing
3,187 3,051 2,585 136 4 466 18
Salaries and employee benefits and other operating expenses
5,293 4,641 4,435 652 14 206 5
Total expenses 25,037 22,021 19,828 3,016 14 2,193 11
Pretax segment income $ 6,810 $ 6,377 $ 5,433 $ 433 7 % $ 944 17 %
USCS issues a wide range of proprietary consumer cards and provides services to U.S. consumers, including travel and lifestyle services as well as banking and non-card financing products. USCS also manages our dining platform that provides digital tools for restaurants and reservation bookings for diners.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased across all revenue categories, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 8 percent, primarily driven by an increase in U.S. consumer billed business. See Tables 5, 6 and 9 for more details on billed business performance.
Net card fees increased 20 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 12 percent, primarily driven by higher travel commissions and fees from our consumer travel business and a discrete revenue adjustment related to certain cash advance fees from prior years.
Interest income increased, primarily driven by growth in revolving loan balances, partially offset by lower interest rates.
Interest expense was relatively flat, reflecting segment net asset growth, offset by lower cost of funds due to lower interest rates.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses decreased, primarily due to a lower reserve build in the current year, partially offset by higher net write-offs. The reserve build in the current year was primarily driven by an increase in loans outstanding and deterioration in the macroeconomic outlook used in our reserve models, partially offset by lower delinquencies. The reserve build in the prior year was primarily driven by an increase in loans outstanding.
Card Member receivables provision for credit losses increased, primarily due to a reserve build in the current year versus a reserve release in the prior year, partially offset by lower net write-offs. The reserve build in the current year was primarily driven by an increase in delinquencies. The reserve release in the prior year was primarily driven by lower delinquencies and a decrease in receivables outstanding.
Other provision for credit losses increased, primarily due to a higher reserve build in the current year and higher net write-offs. The reserve build in the current year was primarily driven by an increase in other loans outstanding and reserves related to partner obligations. The reserve build in the prior year was primarily driven by an increase in other loans outstanding.
EXPENSES
Total expenses increased, primarily driven by higher Card Member services, Card Member rewards and Salaries and employee benefits and other expenses.
Card Member rewards expense increased, primarily driven by increases in Membership Rewards, cash back and cobrand rewards expenses, all of which were primarily driven by higher billed business. The increase in Membership Rewards expense was also driven by the above mentioned benefit in the prior year from enhancements to the U.S. URR models. The increase in cash back rewards expense also reflected the impact associated with a card product migration.
Business development expense increased, primarily due to increased partner payments driven by higher billed business.
Card Member services expense increased, primarily due to higher usage of Card Member benefits and the introduction of new U.S. Platinum benefits.
Marketing expense increased, primarily due to higher levels of spending on customer acquisition and brand advertising.
Salaries and employee benefits and other expenses increased, primarily due to an increase in allocated service costs and compensation costs.
TABLE 9: USCS SELECTED STATISTICAL INFORMATION
As of or for the Years Ended December 31, Change Change
(Millions, except percentages and where indicated) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Billed business (billions)
$ 707.5 $ 654.8 $ 610.8 8 % 7 %
Proprietary cards-in-force 48.3 46.3 43.8 4 6
Proprietary basic cards-in-force 34.1 32.5 30.7 5 6
Average proprietary basic Card Member spending (dollars)
$ 21,215 $ 20,707 $ 20,303 2 2
Total segment assets
$ 122,968 $ 114,228 $ 107,158 8 7
Card Member loans and receivables:
Card Member loans and receivables $ 114,368 $ 107,051 $ 97,996 7 9
Average Card Member loans and receivables $ 106,377 $ 98,928 $ 89,651 8 10
Net write-off rate - principal, interest and fees (a)
2.5 % 2.5 % 2.0 %
Net write-off rate - principal only (a)
2.0 % 2.1 % 1.7 %
30+ days past due as a % of total 1.3 % 1.3 % 1.3 %
Card Member loans:
Total loans
$ 100,171 $ 92,632 $ 83,207 8 11
Net write-off rate - principal, interest and fees (a)
2.7 % 2.7 % 2.2 %
Net write-off rate - principal only (a)
2.1 % 2.2 % 1.7 %
30+ days past due as a % of total 1.3 % 1.4 % 1.4 %
Card Member receivables:
Total receivables
$ 14,197 $ 14,419 $ 14,789 (2) % (3) %
Net write-off rate - principal and fees (a)
1.1 % 1.2 % 1.3 %
Net write-off rate - principal only (a)
0.9 % 1.1 % 1.2 %
30+ days past due as a % of total 0.7 % 0.6 % 0.8 %
(a)Refer to Table 7 footnote (a).
COMMERCIAL SERVICES
TABLE 10: CS SELECTED INCOME STATEMENT DATA
Years Ended December 31, Change Change
(Millions, except percentages) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Revenues
Non-interest revenues $ 13,654 $ 13,219 $ 12,931 $ 435 3 % $ 288 2 %
Interest income 5,077 4,374 3,328 703 16 1,046 31
Interest expense 1,805 1,734 1,483 71 4 251 17
Net interest income 3,272 2,640 1,845 632 24 795 43
Total revenues net of interest expense 16,926 15,859 14,776 1,067 7 1,083 7
Provisions for credit losses 1,380 1,389 1,313 (9) (1) 76 6
Total revenues net of interest expense after provisions for credit losses 15,546 14,470 13,463 1,076 7 1,007 7
Expenses
Card Member rewards, business development and Card Member services
7,166 6,504 6,332 662 10 172 3
Marketing
1,331 1,319 1,090 12 1 229 21
Salaries and employee benefits and other operating expenses
3,381 3,142 3,180 239 8 (38) (1)
Total expenses 11,878 10,965 10,602 913 8 363 3
Pretax segment income $ 3,668 $ 3,505 $ 2,861 $ 163 5 % $ 644 23 %
CS issues a wide range of proprietary corporate and small business cards and provides services to U.S. businesses, including payment and expense management, banking and non-card financing products. CS also issues proprietary corporate cards and provides services to select global corporate clients.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 2 percent, primarily driven by an increase in commercial billed business. See Tables 5, 6 and 11 for more details on billed business performance.
Net card fees increased 11 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 6 percent, primarily driven by higher travel commissions and fees and higher foreign exchange-related revenues associated with Card Member cross-currency spending.
Interest income increased, primarily driven by growth in revolving loan balances and higher interest rates.
Interest expense increased, primarily driven by segment net asset growth, partially offset by a lower cost of funds due to lower interest rates.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs, partially offset by a lower reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding and deterioration in the macroeconomic outlook used in our reserve models, partially offset by the release of a reserve upon the reclassification of a small business cobrand portfolio to Card Member loans HFS from held for investment. The reserve build in the prior year was primarily driven by an increase in loans outstanding.
Card Member receivables provision for credit losses decreased, primarily due to a reserve release in the current year and lower net write-offs. The reserve release in the current year was primarily driven by lower delinquencies.
Other provision for credit losses increased, primarily due to a higher reserve build in the current year and higher net write-offs. The reserve build in the current year was primarily driven by an increase in other loans outstanding and reserves related to partner obligations.
EXPENSES
Total expenses increased, primarily driven by higher Card Member rewards, Business development expense and Salaries and employee benefits and other expenses.
Card Member rewards expense increased, primarily driven by increases in Membership Rewards and cobrand rewards expenses, which were primarily driven by higher billed business. The increase in Membership Rewards expense was also driven by changes to the Membership Rewards program for U.S. Business Platinum cards.
Business development expense increased, primarily due to higher client incentives and increased partner payments, both of which were driven by higher billed business.
Card Member services expense increased, primarily due to higher usage of business services benefits and the introduction of new U.S. Business Platinum benefits.
Marketing expense was relatively flat.
Salaries and employee benefits and other expenses increased, primarily due to increases in compensation costs and allocated service costs, partially offset by lower professional services and technology costs.
TABLE 11: CS SELECTED STATISTICAL INFORMATION
As of or for the Years Ended December 31, Change Change
(Millions, except percentages and where indicated) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Billed business (billions)
$ 541.9 $ 526.5 $ 516.0 3 % 2 %
Proprietary cards-in-force 15.3 15.4 15.4 (1) -
Average Card Member spending (dollars)
$ 35,153 $ 34,130 $ 33,745 3 1
Total segment assets
$ 63,168 $ 58,969 $ 55,361 7 7
Card Member loans and receivables:
Card Member loans and receivables $ 56,086 $ 54,592 $ 52,060 3 5
Average Card Member loans and receivables $ 56,711 $ 54,362 $ 50,621 4 7
Net write-off rate - principal, interest and fees (a)
2.2 % 2.0 % 1.7 %
Net write-off rate - principal only - small business (a)(b)
2.3 % 2.2 % 1.9 %
30+ days past due as a % of total - small business
1.5 % 1.5 % 1.5 %
Card Member loans:
Total loans
$ 30,833 $ 29,647 $ 25,838 4 15
Net write-off rate - principal, interest and fees (a)
3.0 % 2.7 % 2.0 %
Net write-off rate - principal only (a)
2.6 % 2.3 % 1.7 %
30+ days past due as a % of total 1.7 % 1.5 % 1.4 %
Card Member receivables:
Total receivables
$ 25,253 $ 24,945 $ 26,222 1 % (5) %
Net write-off rate - principal and fees (a)
1.2 % 1.3 % 1.5 %
Net write-off rate - principal only - small business (a)(b)
1.7 % 1.9 % 2.1 %
30+ days past due as a % of total - small business
1.2 % 1.3 % 1.5 %
90+ days past billing as a % of total - corporate (b)
0.5 % 0.4 % 0.4 %
(a)Refer to Table 7 footnote (a).
(b)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
INTERNATIONAL CARD SERVICES
TABLE 12: ICS SELECTED INCOME STATEMENT DATA
Years Ended December 31, Change Change
(Millions, except percentages) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Revenues
Non-interest revenues $ 11,819 $ 10,369 $ 9,472 $ 1,450 14 % $ 897 9 %
Interest income 2,534 2,331 2,076 203 9 255 12
Interest expense 1,353 1,239 1,118 114 9 121 11
Net interest income 1,181 1,092 958 89 8 134 14
Total revenues net of interest expense 13,000 11,461 10,430 1,539 13 1,031 10
Provisions for credit losses 831 726 727 105 14 (1) -
Total revenues net of interest expense after provisions for credit losses 12,169 10,735 9,703 1,434 13 1,032 11
Expenses
Card Member rewards, business development and Card Member services
5,950 5,243 4,588 707 13 655 14
Marketing
1,319 1,235 1,081 84 7 154 14
Salaries and employee benefits and other operating expenses
3,297 3,226 3,061 71 2 165 5
Total expenses 10,566 9,704 8,730 862 9 974 11
Pretax segment income $ 1,603 $ 1,031 $ 973 $ 572 55 % $ 58 6 %
ICS issues a wide range of proprietary consumer, small business and corporate cards outside the United States. ICS also provides services to our international customers, including travel and lifestyle services, and manages certain international joint ventures and our loyalty coalition business.
On January 12, 2026, we acquired our partner's interest in our Switzerland joint venture (Swisscard AECS GmbH), resulting in Swisscard becoming a wholly owned subsidiary. Through December 31, 2025, we accounted for Swisscard under the equity method, with our share of Swisscard's net income reported within Service fees and other revenue. For reporting periods beginning January 1, 2026, we will consolidate Swisscard and reflect its financial results within the respective report lines across our financial statements; Swisscard will continue to be reported within the ICS segment.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Net card fees.
Discount revenue increased 12 percent, primarily reflecting an increase in billed business. See Tables 5, 6, and 13 for more details on billed business performance.
Net card fees increased 20 percent, primarily driven by growth in our premium card portfolios.
Service fees and other revenue increased 14 percent (11 percent on an FX-adjusted basis), primarily driven by an increase in foreign exchange-related revenues associated with Card Member cross-currency spending, higher loyalty coalition-related fees and higher income from equity method investments primarily related to the partial sale of a card portfolio by Swisscard.2
Interest income increased, primarily driven by growth in revolving loan balances, partially offset by lower interest rates.
Interest expense increased, primarily driven by a higher cost of funds due to segment net asset growth, partially offset by lower interest rates.
PROVISIONS FOR CREDIT LOSSES
Card Member loans provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve build in the current year was primarily driven by an increase in loans outstanding. The reserve build in the prior year was primarily driven by an increase in loans outstanding, partially offset by lower delinquencies.
Card Member receivables provision for credit losses increased, primarily due to higher net write-offs and a higher reserve build in the current year. The reserve builds in both the current and prior year were primarily driven by increases in receivables outstanding.
2 Refer to footnote 1 on page 44 for details regarding foreign currency adjusted information.
EXPENSES
Total expenses increased, primarily driven by higher Card Member rewards and Card Member services expenses.
Card Member rewards expense increased, primarily driven by increases in Membership Rewards and cobrand rewards expenses, which were primarily driven by higher billed business.
Business development expense increased, primarily due to higher loyalty coalition-related costs and increased partner payments driven by higher billed business, partially offset by a lower charge in the current year related to revenue allocated to a joint venture partner.
Card Member services expense increased, primarily due to higher usage of travel-related benefits.
Marketing expense increased, reflecting higher levels of spending on customer acquisition and other growth initiatives.
Salaries and employee benefits and other expenses was relatively flat, primarily reflecting higher allocated service costs and compensation costs and a one-time fee from a partner in the prior year, offset by a charge associated with an increase in international non-income tax reserves in the prior year.
TABLE 13: ICS SELECTED STATISTICAL INFORMATION
As of or for the Years Ended December 31, Change Change
(Millions, except percentages and where indicated) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Billed business (billions)
$ 418.0 $ 366.9 $ 329.5 14 % 11 %
Proprietary cards-in-force 23.0 21.9 21.0 5 4
Proprietary basic cards-in-force 17.2 16.4 15.6 5 5
Average proprietary basic Card Member spending (dollars)
$ 24,822 $ 22,965 $ 21,550 8 7
Total segment assets
$ 50,089 $ 42,879 $ 42,234 17 2
Card Member loans and receivables:
Card Member loans and receivables $ 43,409 $ 37,442 $ 36,350 16 3
Average Card Member loans and receivables $ 39,886 $ 35,681 $ 32,202 12 11
Net write-off rate - principal, interest and fees (a)
1.9 % 1.9 % 2.3 %
Net write-off rate - principal only - consumer and small business (a)(b)
1.8 % 1.8 % 2.2 %
30+ days past due as a % of total - consumer and small business
1.1 % 1.0 % 1.1 %
Card Member loans - consumer and small business:
Total loans
$ 20,828 $ 17,395 $ 16,950 20 3
Net write-off rate - principal, interest and fees (a)
2.4 % 2.5 % 2.5 %
Net write-off rate - principal only (a)
2.0 % 2.1 % 2.1 %
30+ days past due as a % of total 1.2 % 1.2 % 1.3 %
Card Member receivables:
Total receivables
$ 22,581 $ 20,047 $ 19,400 13 % 3 %
Net write-off rate - principal and fees (a)
1.4 % 1.4 % 2.1 %
Net write-off rate - principal only - consumer and small business (a)(b)
1.5 % 1.5 % 2.2 %
30+ days past due as a % of total - consumer and small business
0.9 % 0.8 % 1.0 %
90+ days past billing as a % of total - corporate (b)
0.5 % 0.4 % 0.5 %
(a)Refer to Table 7 footnote (a).
(b)For corporate receivables, delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member's billing statement date. In addition, if we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member receivable balance is classified as 90 days past billing. Corporate receivables delinquency data for periods other than 90+ days past billing and the net write-off rate based on principal losses only are not available due to system constraints.
GLOBAL MERCHANT AND NETWORK SERVICES
TABLE 14: GMNS SELECTED INCOME STATEMENT AND OTHER DATA
Years Ended December 31, Change Change
(Millions, except percentages and where indicated) 2025 2024 2023
2025 vs. 2024
2024 vs. 2023
Revenues
Non-interest revenues $ 7,058 $ 6,729 $ 6,620 $ 329 5 % $ 109 2 %
Interest income 40 52 57 (12) (23) (5) (9)
Interest expense (661) (703) (719) 42 6 16 2
Net interest income 701 755 776 (54) (7) (21) (3)
Total revenues net of interest expense 7,759 7,484 7,396 275 4 88 1
Provisions for credit losses 78 42 27 36 86 15 56
Total revenues net of interest expense after provisions for credit losses 7,681 7,442 7,369 239 3 73 1
Expenses
Business development and Card Member services
1,210 1,148 1,218 62 5 (70) (6)
Marketing
393 411 437 (18) (4) (26) (6)
Salaries and employee benefits and other operating expenses
2,110 1,485 2,058 625 42 (573) (28)
Total expenses 3,713 3,044 3,713 669 22 (669) (18)
Pretax segment income 3,968 4,398 3,656 (430) (10) 742 20
Network volumes(billions)
1,897.0 1,764.8 1,680.1 $ 132 7 $ 85 5
Total segment assets
$ 18,686 $ 17,712 $ 23,714 5 % (25) %
GMNS operates a global payments network that processes and settles card transactions, acquires merchants and provides multi-channel marketing programs and capabilities, services and data analytics, leveraging our global integrated network. GMNS manages our partnership relationships with third-party card issuers, merchant acquirers and a prepaid reloadable and gift card program manager, licensing the American Express brand and extending the reach of the global network.
TOTAL REVENUES NET OF INTEREST EXPENSE
Non-interest revenues increased, primarily driven by higher Discount revenue and Service fees and other revenue.
Discount revenue increased 4 percent, primarily driven by an increase in billed business, partially offset by lower average merchant discount rates due to shifts in geographic and merchant spend mix. See Tables 5 and 6 for more details on billed business performance.
Service fees and other revenue increased 6 percent, primarily driven by increases in network partnership revenues and foreign exchange-related revenues associated with Card Member cross-currency spending, partially offset by Accertify revenues included in the prior year.
GMNS receives an interest expense credit relating to internal transfer pricing due to its merchant payables. Net interest income decreased, primarily due to lower interest rates in international markets, partially offset by higher interest expense credit, primarily driven by an increase in average merchant payables.
PROVISIONS FOR CREDIT LOSSES
Provisions for credit losses increased, primarily due to higher reserve builds related to partner obligations, partially offset by lower net write-offs in the current year.
EXPENSES
Total expenses increased, primarily driven by higher Salaries and employee benefits and other expenses.
Business development expense increased, primarily due to increased partner payments driven by higher network volumes.
Marketing expense decreased, primarily due to lower spend on merchant engagement and other growth initiatives.
Salaries and employee benefits and other expenses increased, primarily driven by the gain in the prior year recognized on the sale of Accertify included in the Other, net component of operating expenses, partially offset by a decrease in allocated service costs.
CORPORATE & OTHER
Corporate functions and certain other businesses are included in Corporate & Other.
Corporate & Other pretax loss was $2.3 billion and $2.4 billion in 2025 and 2024, respectively. The decrease in the pretax loss was primarily driven by a prior-year increase in legal reserves and the previously-mentioned gain related to an equity transaction by GBTG, an equity method investee, partially offset by higher compensation.
CONSOLIDATED CAPITAL RESOURCES AND LIQUIDITY
Our balance sheet management objectives are to maintain:
•A solid and flexible equity capital profile;
•A broad, deep and diverse set of funding sources to finance our assets and meet operating requirements; and
•Liquidity programs that enable us to continuously meet expected future financing obligations and business requirements for at least a twelve-month period under a variety of adverse circumstances.
We continue to see volatility in the capital markets due to a variety of factors and manage our balance sheet to reflect evolving circumstances.
CAPITAL STRATEGY
We believe capital allocated to growing businesses with a return on risk-adjusted equity in excess of our costs will generate shareholder value. Our objective is to retain sufficient levels of capital generated through net income and other sources, such as the issuance of subordinated debt and preferred shares, as well as the exercise of stock options by colleagues, to maintain a strong balance sheet, provide flexibility to support future business growth and distribute excess capital to shareholders through dividends and share repurchases. See "Dividends and Share Repurchases" below.
The level and composition of our consolidated capital position are determined through our Internal Capital Adequacy Assessment Process, which takes into account our business activities, as well as marketplace conditions and requirements or expectations of credit rating agencies, regulators and shareholders, among others. As a bank holding company, we are subject to regulatory requirements administered by the U.S. federal bank regulatory agencies. The Federal Reserve has established specific capital adequacy guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items. Failure to maintain minimum regulatory capital levels at American Express or our U.S. bank subsidiary, American Express National Bank (AENB), could affect our status as a financial holding company and cause the banking regulators with oversight of American Express or AENB to take actions that could limit our business operations.
We seek to maintain capital levels and ratios in excess of our minimum regulatory requirements, specifically within a 10 to 11 percent target range for American Express Company's Common Equity Tier 1 (CET1) risk-based capital ratio.
We maintain certain flexibility to shift capital across our businesses as appropriate. For example, we may infuse additional capital into subsidiaries to maintain capital at targeted levels in consideration of debt ratings and regulatory requirements. These infused amounts can affect the capital and liquidity positions at American Express Company or at our subsidiaries.
We report our capital ratios using the Basel III capital definitions and the Basel III standardized approach for calculating risk-weighted assets.
See "Supervision and Regulation - Capital and Liquidity Regulation" under "Business" for more information.
The following table presents our regulatory risk-based capital and leverage ratios and those of AENB, as of December 31, 2025:
TABLE 15: REGULATORY RISK-BASED CAPITAL AND LEVERAGE RATIOS
Effective Minimum (a)
Ratios as of December 31, 2025
Risk-Based Capital
Common Equity Tier 1 7.0 %
American Express Company 10.5 %
American Express National Bank 10.9
Tier 1 8.5
American Express Company 11.1
American Express National Bank 10.9
Total 10.5
American Express Company 13.1
American Express National Bank 13.1
Tier 1 Leverage 4.0
American Express Company 9.8
American Express National Bank 9.0
Supplementary Leverage Ratio
3.0 %
American Express Company 8.3
American Express National Bank 7.5 %
(a)Represents Basel III minimum requirements and applicable regulatory buffers as defined by the federal banking regulators, which includes the stress capital buffer (SCB) for American Express Company and the capital conservation buffer for AENB. Refer to "Supervision and Regulation - Capital and Liquidity Regulation" under "Business" and Note 21 to the "Consolidated Financial Statements" for additional information.
The following table presents American Express Company's regulatory risk-based capital and risk-weighted assets as of December 31, 2025:
TABLE 16: REGULATORY RISK-BASED CAPITAL COMPONENTS AND RISK-WEIGHTED ASSETS
American Express Company
($ in Millions)
December 31, 2025
Risk-Based Capital
Common Equity Tier 1 $ 27,268
Tier 1 Capital 28,888
Tier 2 Capital
5,025
Total Capital 33,913
Risk-Weighted Assets 259,448
Average Total Assets to calculate the Tier 1 Leverage Ratio 294,275
Total Leverage Exposure to calculate the Supplementary Leverage Ratio
$ 346,685
The following are definitions for our regulatory risk-based capital and leverage ratios, which are calculated as per standard regulatory guidance:
Risk-Weighted Assets- Assets are weighted for risk according to a formula used by the Federal Reserve to conform to capital adequacy guidelines. On- and off-balance sheet items are risk weighted, with off-balance sheet items converted to balance sheet equivalents, using risk conversion factors, before being assigned a risk weight. Off-balance sheet exposures comprise a minimal part of the total risk-weighted assets.
Common Equity Tier 1 Risk-Based Capital Ratio- Calculated as CET1 capital, divided by risk-weighted assets. CET1 capital is common shareholders' equity, adjusted for ineligible goodwill and intangible assets and certain deferred tax assets.
Tier 1 Risk-Based Capital Ratio- Calculated as Tier 1 capital divided by risk-weighted assets. Tier 1 capital is the sum of CET1 capital, preferred shares and third-party non-controlling interests in consolidated subsidiaries, adjusted for capital held by insurance subsidiaries. We have $1.6 billion of preferred shares outstanding to help address a portion of the Tier 1 capital requirements in excess of common equity requirements. See Note 15 to the "Consolidated Financial Statements" for additional information on our preferred shares.
Total Risk-Based Capital Ratio- Calculated as the sum of Tier 1 capital and Tier 2 capital divided by risk-weighted assets. Tier 2 capital is the sum of the allowable allowance for credit losses and $1,750 million of eligible subordinated notes, adjusted for capital held by insurance subsidiaries. The $1,750 million of eligible subordinated notes includes the $500 million subordinated debt issued in April 2024, the $500 million subordinated debt issued in July 2023 and the $750 million subordinated debt issued in May 2022.
Tier 1 Leverage Ratio- Calculated as Tier 1 capital divided by average total consolidated assets for the most recent quarter. Average total consolidated assets reflect quarterly average assets adjusted for applicable regulatory deductions from Tier 1 capital.
Supplementary Leverage Ratio- Calculated as Tier 1 capital divided by total leverage exposure. Total leverage exposure includes average on-balance-sheet assets and certain off-balance-sheet exposures, adjusted for applicable regulatory deductions from Tier 1 capital.
We continue to include accumulated other comprehensive income (loss) in regulatory capital.
We are subject to annual supervisory stress testing conducted by the Federal Reserve. We submitted our annual capital plan to the Federal Reserve in April 2025. On August 29, 2025, the Federal Reserve confirmed our SCB requirement at 2.5 percent, resulting in an effective minimum CET1 ratio of 7 percent, effective October 1, 2025 to September 30, 2026.
DIVIDENDS AND SHARE REPURCHASES
We return capital to common shareholders through dividends and share repurchases. The share repurchases reduce common shares outstanding and generally more than offset the issuance of new shares as part of employee compensation plans.
During the year ended December 31, 2025, we returned $7.6 billion to our shareholders in the form of share repurchases of $5.3 billion and common share dividends of $2.3 billion. We repurchased 16.8 million common shares at an average price of $312.87 in 2025. These share repurchase and common share dividend amounts collectively represent approximately 71 percent of net income available to common shareholders during the year ended December 31, 2025.
We plan to increase the regular quarterly dividend on our common shares outstanding by approximately 16 percent, from 82 cents to 95 cents per share, beginning with the first quarter 2026 dividend declaration.
In addition, during the year ended December 31, 2025, we paid $58 million in dividends on non-cumulative perpetual preferred shares outstanding. Refer to Note 15 to the "Consolidated Financial Statements" for additional information on our preferred shares.
Our decisions on capital distributions depend on various factors, including: our capital levels and regulatory capital requirements; regulatory guidance or restrictions; actual and forecasted business results; economic and market conditions; revisions to, or revocation of, the Federal Reserve's authorization of our capital plan; and the supervisory stress test process. We may conduct share repurchases through a variety of methods, including open market purchases, plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, privately negotiated transactions or other purchases, including block trades, accelerated share repurchase programs or any combination of such methods as market conditions warrant and at prices we deem appropriate.
FUNDING STRATEGY
Our principal funding objective is to maintain broad and well-diversified funding sources to allow us to finance our global businesses and to maintain a strong liquidity profile. Our funding strategy and activities are integrated into our asset-liability management activities. We have in place a funding policy covering American Express Company and all of our subsidiaries.
Our financing needs are in large part a consequence of our proprietary card-issuing businesses, where we generally pay merchants for card transactions prior to reimbursement by Card Members and therefore fund the merchant payments during the period Card Member loans and receivables are outstanding. In addition, we maintain a liquidity position to meet regulatory requirements and support our business activities.
We aim to satisfy these financing needs with a diverse set of funding sources. The diversity of funding sources by type of instrument, by tenor and by investor base, among other factors, mitigates the impact of disruptions in any one type of instrument, tenor or investor. We seek to achieve diversity and cost efficiency in our funding sources by maintaining scale and market relevance in deposits, unsecured debt and asset securitizations and access to secured borrowing facilities and a committed bank credit facility. In particular, we are focused on continuing to grow our direct deposit program as a funding source.
Our funding plan is primarily driven by the size and mix of business asset growth, our liquidity position and choice of funding sources, as well as cash requirements generated by withdrawals of deposits by our customers, the maturities of debt outstanding and related interest payments. In executing our funding plan, we aim to maintain a balanced debt maturity profile with an appropriate mix of short-term and long-term refinancing requirements.
FUNDING PROGRAMS AND ACTIVITIES
We had the following customer deposits and consolidated debt outstanding as of December 31, 2025 and 2024:
TABLE 17: SUMMARY OF CUSTOMER DEPOSITS AND CONSOLIDATED DEBT
(Billions) 2025 2024
Customer deposits $ 152.5 $ 139.4
Short-term borrowings 1.4 1.4
Long-term debt 56.4 49.7
Total customer deposits and debt $ 210.3 $ 190.5
We may redeem from time to time certain debt securities prior to the original contractual maturity dates in accordance with the optional redemption provisions of those debt securities.
Our funding plan for the full year 2026 includes, among other sources, approximately $4.0 billion to $8.0 billion of unsecured term debt issuance and approximately $2.0 billion to $6.0 billion of secured term debt issuance. Actual funding activities can vary from our plans due to various factors, such as future business growth, liquidity requirements, the impact of global economic, political and other events on market capacity, demand for securities offered by us, regulatory changes, ability to securitize and sell loans and receivables, and the performance of loans and receivables previously sold in securitization transactions. Many of these factors are beyond our control.
Our equity capital and funding strategies are designed, among other things, to maintain appropriate and stable unsecured debt ratings from the major credit rating agencies: Moody's Investor Services (Moody's), Standard & Poor's (S&P) and Fitch Ratings (Fitch). Such ratings help support our access to cost-effective unsecured funding as part of our overall funding strategy. Our asset securitization activities are rated separately.
TABLE 18: UNSECURED DEBT RATINGS
American Express Entity
Moody's
S&P Fitch
American Express Company Long Term
A2
A-
A
Short Term
N/R
A-2
F1
Outlook
Stable
Stable
Stable
American Express Travel Related Services Company, Inc. Long Term
A2
A
A
Short Term
P-1
A-1
F1
Outlook
Stable
Stable
Stable
American Express National Bank Long Term
A3
A
A
Short Term
P-1
A-1
F1
Outlook
Stable
Stable
Stable
American Express Credit Corporation Long Term
A2
A
A
Short Term
N/R
N/R
N/R
Outlook
Stable
Stable
Stable
These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.
Downgrades in the ratings of our unsecured debt or asset securitization program securities could result in higher funding costs, as well as higher fees related to borrowings under our unused credit facilities. Declines in credit ratings could also reduce our borrowing capacity in the unsecured debt and asset securitization capital markets. We believe our funding mix, including the proportion of U.S. direct deposits insured by the FDIC to total funding, should reduce the impact that credit rating downgrades would have on our funding capacity and costs.
DEPOSIT PROGRAMS
We offer deposits within our U.S. bank subsidiary, AENB. These funds are currently insured up to an amount that is at least $250,000 per depositor, per ownership category through the FDIC; as of December 31, 2025, approximately 92 percent of these deposits were insured. Our ability to obtain deposit funding and offer competitive interest rates is dependent on, among other factors, the capital level of AENB. The direct deposit program offered by AENB is our primary deposit product channel, which makes FDIC-insured high-yield savings account, certificates of deposit (CDs), business checking and consumer checking account products available directly to customers. As of December 31, 2025, our direct deposit program had approximately 3.9 million accounts. AENB also sources deposits through third-party distribution channels as needed to meet our overall funding objectives. CDs carry stated maturities while high-yield savings account, checking account and third-party sweep deposit products do not. We manage the duration of our maturing obligations, including CDs, to reduce concentration and refinancing risk.
As of December 31, 2025, we had $152.5 billion in deposits. Refer to Note 7 to the "Consolidated Financial Statements" for a further description of these deposits and scheduled maturities of certificates of deposits.
The following table sets forth the average interest rates we paid on different types of deposits during the years ended December 31, 2025, 2024 and 2023. The change in the average interest rate we paid on our interest-bearing deposits was primarily due to the impact of lower market interest rates offered for savings deposits.
TABLE 19: AVERAGE INTEREST RATES PAID ON DEPOSITS
Year ended December 31,
2025 2024 2023
(Millions, except percentages)
Average Balance Interest Expense Average Interest Rate Average Balance Interest Expense Average Interest Rate Average Balance Interest Expense Average Interest Rate
Savings accounts
$ 113,217 $ 4,025 3.6 % $ 101,705 $ 4,210 4.1 % $ 84,913 $ 3,320 3.9 %
Checking accounts
2,536 41 1.6 1,677 29 1.7 1,189 37 3.1
Certificates of deposit:
Direct 4,831 190 3.9 4,978 211 4.2 4,407 159 3.6
Third-party (brokered) 10,589 465 4.4 9,718 397 4.1 13,945 518 3.7
Sweep accounts - Third-party (brokered) 15,456 702 4.5 15,419 845 5.5 15,676 824 5.3
Total U.S. interest-bearing deposits
$ 146,629 $ 5,422 3.7 % $ 133,497 $ 5,692 4.3 % $ 120,130 $ 4,858 4.0 %
SHORT-TERM FUNDING PROGRAMS
Short-term borrowings, such as commercial paper, are defined as any debt with an original maturity of twelve months or less, as well as interest-bearing overdrafts with banks. Our short-term funding programs are used primarily to fund working capital needs, such as managing seasonal variations in receivables balances. The amount of short-term borrowings issued in the future will depend on our funding strategy, our needs and market conditions. We had no commercial paper outstanding at any point during 2025. Refer to Note 8 to the "Consolidated Financial Statements" for a further description of these borrowings.
LONG-TERM DEBT AND ASSET SECURITIZATION PROGRAMS
As of December 31, 2025, we had $56.4 billion in long-term debt outstanding, including unsecured debt and asset-backed securities. Refer to Note 8 to the "Consolidated Financial Statements" for a further description of these borrowings and scheduled maturities of long-term debt obligations.
We periodically securitize Card Member loans and receivables arising from our U.S. card business, as the securitization market provides us with cost-effective funding. Securitization of Card Member loans and receivables is accomplished through the transfer of those assets to a trust, which in turn issues securities collateralized by the transferred assets to third-party investors. The proceeds from issuance are distributed to us, through our wholly owned subsidiaries, as consideration for the transferred assets. Refer to Note 5 to the "Consolidated Financial Statements" for a further description of our asset securitizations.
TABLE 20: DEBT ISSUANCES
($ in Billions)
2025
American Express Company:
USD Floating Rate Senior Notes (compounded SOFR(a)plus weighted-average spread of 98 basis points)
$ 1.5
USD Fixed-to-Floating Rate Senior Notes (weighted-average coupon of 4.98% during the fixed rate period and compounded SOFR(a)plus weighted-average spread of 126 basis points during the floating rate period)
12.6
EUR Fixed-to-Floating Rate Senior Notes (coupon of 3.43% during the fixed rate period and compounded EURIBOR(b) plus spread of 110 basis points during the floating rate period)
1.1
American Express Credit Account Master Trust:
Fixed Rate Class A Certificates (weighted-average coupon of 4.42%)
6.4
Total $ 21.6
(a)Secured overnight financing rate (SOFR).
(b)Euro Interbank Offered Rate (EURIBOR).
LIQUIDITY MANAGEMENT
Our liquidity objective is to maintain access to a diverse set of on- and off-balance sheet liquidity sources. We seek to maintain liquidity sources in amounts sufficient to meet our expected future financial obligations and business requirements for liquidity for a period of at least twelve months under a variety of adverse circumstances. These include, but are not limited to, an event where we are unable to raise new funds under our regular funding programs during a substantial weakening in economic conditions.
Our liquidity management strategy includes a number of elements, including, but not limited to:
•Maintaining diversified funding sources (refer to "Funding Strategy" above for more details);
•Maintaining unencumbered liquid assets and off-balance sheet liquidity sources;
•Projecting cash inflows and outflows under a variety of economic and market scenarios; and
•Establishing clear objectives for liquidity risk management, including compliance with regulatory requirements.
We seek to maintain access to a diverse set of on-balance sheet and off-balance sheet liquidity sources, including cash and other liquid assets, secured borrowing facilities and a committed bank credit facility. Through our U.S. bank subsidiary, AENB, we have also pledged collateral eligible for use at the Federal Reserve's discount window.
The amount and type of liquidity resources we maintain can vary over time, based upon the results of stress scenarios required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as additional stress scenarios required under our liquidity risk policy. These stress scenarios possess distinct characteristics, varying by cash flow assumptions, time horizon and qualifying liquidity sources, among other factors. Scenarios under our liquidity risk policy include market-wide, firm-specific and combined liquidity stresses. Additionally, we are subject to reduced LCR and NSFR requirements as a Category III firm with less than $75 billion in weighted short-term wholesale funding. For the quarter ended December 31, 2025, average LCR and NSFR were 212 percent and 123 percent, respectively which exceeded the regulatory requirement of 100 percent. See "Supervision and Regulation - Enhanced Prudential Standards" under "Business" for more information. We consider other factors in determining the amount and type of liquidity we maintain, such as economic and financial market conditions, seasonality in business operations, growth in our businesses, potential acquisitions or dispositions, the cost and availability of alternative liquidity sources and credit rating agency guidelines and requirements. We believe that we currently maintain sufficient liquidity to meet all internal and regulatory liquidity requirements.
As of December 31, 2025 and 2024, we had $47.8 billion and $40.6 billion in Cash and cash equivalents, respectively. Refer to "Cash Flows" below for a discussion of the major drivers impacting cash flows for the year ended December 31, 2025. Depending on the interest rate environment, our funding composition and the amount of liquidity resources we maintain, the level of future net interest income or expense associated with our liquidity resources will vary. For the year ended December 31, 2025, interest income exceeded the interest expense associated with the liquidity portfolio.
Securitized Borrowing Capacity
As of December 31, 2025, we maintained our committed, revolving, secured borrowing facility, with a maturity date of July 17, 2028, which gives us the right to sell up to $3.0 billion face amount of eligible AAA notes from the American Express Issuance Trust II (the Charge Trust). We also maintained our committed, revolving, secured borrowing facility, with a maturity date of September 15, 2028, which gives us the right to sell up to $2.0 billion face amount of eligible AAA certificates from the American Express Credit Account Master Trust (the Lending Trust). These facilities enhance our contingent funding resources and are also used in the ordinary course of business to fund working capital needs. As of December 31, 2025, no amounts were drawn on the Charge Trust facility or the Lending Trust facility.
Committed Bank Credit Facility
As of December 31, 2025, we maintained a committed syndicated bank credit facility of $6.0 billion, with a maturity date of September 24, 2028. The availability of the credit facility is subject to our maintenance of a minimum CET1 risk-based capital ratio of 4.5 percent, with certain restrictions in relation to either accessing the facility or distributing capital to common shareholders in the event our CET1 risk-based capital ratio falls between 4.5 percent and 6.5 percent. It does not contain a material adverse change clause, which might otherwise preclude borrowing under the facility, nor is it dependent on our credit rating. As of December 31, 2025, we were in compliance with the covenants contained in the credit facility and no amounts were drawn on this facility. This facility enhances our contingent funding resources and is also used in the ordinary course of business to fund working capital needs. Any undrawn portion of this facility could serve as a backstop for the amount of commercial paper outstanding.
Other Sources of Liquidity
In addition to cash and other liquid assets and the secured borrowing facilities and committed bank credit facility described above, as an insured depository institution, AENB may borrow from the Federal Reserve Bank of San Francisco through the discount window against the U.S. credit card loans and charge card receivables that it pledged.
As of December 31, 2025, AENB had available borrowing capacity of $82.8 billion based on the amount and collateral valuation of receivables that were pledged to the Federal Reserve Bank of San Francisco. Whether specific assets will be considered qualifying collateral and the amount that may be borrowed against the collateral remain at the discretion of the Federal Reserve and can change from time to time. Due to regulatory restrictions, liquidity generated by AENB can generally be used only to fund obligations within AENB, and transfers to the parent company or non-bank affiliates may be subject to prior regulatory approval.
Off-balance Sheet Arrangements
We have certain off-balance sheet obligations that include certain lease arrangements, guarantees, indemnifications and certain Card Member and partner arrangements that may have a material current or future effect on our financial condition, changes in financial condition, results of operations, or liquidity and capital resources. For more information on these obligations, refer to Note 12 and Note 22 to the "Consolidated Financial Statements."
CASH FLOWS
The following table summarizes our cash flow activity, followed by a discussion of the major drivers impacting operating, investing and financing cash flows for the year ended December 31, 2025 compared to the year ended December 31, 2024:
TABLE 21: CASH FLOWS
(Billions) 2025 2024 2023
Total cash provided by (used in):
Operating activities $ 18.4 $ 14.0 $ 18.5
Investing activities (22.9) (24.4) (24.4)
Financing activities 11.2 4.4 18.4
Effect of foreign currency exchange rates on cash and cash equivalents 0.4 - 0.2
Net increase (decrease) in cash and cash equivalents
$ 7.2 $ (6.0) $ 12.7
Cash Flows from Operating Activities
Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions for credit losses, depreciation and amortization, stock-based compensation, deferred taxes and other non-cash items and (ii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of payments.
In 2025, the net cash provided by operating activities was driven by cash generated from net income for the period and higher net operating liabilities, primarily driven by higher book overdrafts due to timing differences arising in the ordinary course of business.
In 2024, the net cash provided by operating activities was driven by cash generated from net income for the period, partially offset by lower net operating liabilities, primarily driven by lower book overdrafts due to timing differences arising in the ordinary course of business.
Cash Flows from Investing Activities
Our cash flows from investing activities primarily include changes in loans and Card Member receivables, as well as changes in our available-for-sale investment securities portfolio.
In 2025, the net cash used in investing activities was primarily driven by higher loans and Card Member receivables outstanding and the acquisition of a business.
In 2024, the net cash used in investing activities was primarily driven by higher loans and Card Member receivables outstanding, partially offset by net maturities of investment securities.
Cash Flows from Financing Activities
Our cash flows from financing activities primarily include changes in customer deposits, long-term debt and short-term borrowings, as well as dividend payments and share repurchases.
In both 2025 and 2024, the net cash provided by financing activities was primarily driven by growth in customer deposits and net proceeds from long-term debt, partially offset by share repurchases and dividend payments.
RISK MANAGEMENT
GOVERNANCE AND BOARD OVERSIGHT
We maintain a risk governance framework that describes key components of risk management, including risk governance, oversight, roles and responsibilities across the lines of defense, our risk taxonomy, risk appetite and the risk management lifecycle. Our risk governance framework also provides expectations for risk culture, compensation and performance management.
Our Board and its committees provide oversight of risk management and monitor our risk culture and the "tone at the top." Each committee of the Board consists entirely of independent directors and provides regular reports to the full Board regarding matters reviewed at their committee. The committees meet regularly in private sessions with our Chief Financial Officer, Chief Legal Officer, Chief Risk Officer, Chief Compliance Officer, Chief Audit Executive, Head of Credit Review and other members of senior management with regard to our risk management processes, risk profile and performance, controls, talent and capabilities.
The responsibilities of each of the committees of the Board in overseeing risk management include:
The Risk Committeeis responsible for overseeing and approving our risk governance framework, processes and methodologies, and evaluating the independence and authority of our risk management function. On an annual basis, the Risk Committee reviews and approves the Company's risk appetite framework, which defines the nature and level of risk we are willing to take and provides limits, thresholds and escalation processes that align risk taking with strategic objectives. The Risk Committee regularly reviews our risk profile against the tolerances in the risk appetite framework, including significant risk exposures, risk trends in our portfolios and major risk concentrations, and the steps taken by management to monitor, control and report such exposures, trends and concentrations. The Risk Committee also reviews and concurs with the appointment, replacement, performance and compensation of the Chief Risk Officer and receives regular reports from the Chief Risk Officer on key risks and exposures. The Risk Committee provides oversight of our compliance with regulatory capital and liquidity standards, and our Internal Capital Adequacy Assessment Process, including the CCAR submissions.
The Audit and Compliance Committee (ACC)is responsible for assisting the Board in its oversight responsibilities relating to the integrity of our financial statements and financial and regulatory reporting processes, internal and external auditing, the integrity of internal controls and legal and regulatory compliance. The ACC appoints, replaces, reviews and evaluates the qualifications and independence of our independent registered public accounting firm and periodically meets with management and the independent registered public accounting firm to review and discuss our accounting policies, critical accounting estimates and critical auditing matters. In addition, the ACC is responsible for the appointment, replacement, performance and compensation of the Chief Audit Executive and the Head of Credit Review, as well as the approval of the annual plans, charters, policies and budgets of the Internal Audit Group and the Credit Review Group. In its role in overseeing legal and regulatory compliance, the ACC reviews the effectiveness of our company-wide compliance risk management program and periodically meets with the Chief Compliance Officer to review and approve our compliance risk tolerance statement and related compliance policies.
The Compensation and Benefits Committee (CBC)is responsible for assisting the Board in its oversight responsibilities related to the adoption, amendment and termination of compensation plans and arrangements covering executive officers and certain other colleagues, our employee benefit plans of the Company and review of the overall management of our colleague experience. The CBC works with the Chief Colleague Experience Officer and the Chief Risk Officer to ensure our compensation programs appropriately balance risk with business incentives and that business performance is achieved without taking imprudent or excessive risk. Our Chief Risk Officer is actively involved in setting risk goals for the Company. Our Chief Risk Officer also reviews the risk profiles of each business unit and, together with the Chief Audit Executive, provides input into performance evaluations. The Chief Risk Officer attests to the CBC as to whether performance goals and results have been achieved without taking imprudent risks. Additionally, the CBC uses a risk-balanced incentive compensation framework to decide on the bonus pools for our colleagues and the compensation of senior executives.
The Nominating, Governance and Public Responsibility Committee (NGPRC)is responsible for assisting the Board in its oversight responsibilities relating to the Chief Executive Officer and key senior management succession, Board composition, corporate governance, non-employee director compensation and benefits and our practices and positions relating to public policy and sustainability issues. As part of its remit, the NGPRC regularly reviews risks related to corporate governance structure and practices. In addition, the NGPRC regularly reviews the composition of the Board, reassessing directors eligible for election or recruiting candidates with expertise in areas of importance to us.
We also have management-level risk management committees that implement our risk governance framework and facilitate the execution of management's risk management responsibilities. The Enterprise Risk Management Committee (ERMC) is the highest-level management risk committee and is responsible for monitoring risk-taking activities against our risk appetite framework as well as governing and overseeing risks we face. The ERMC is co-chaired by the Chief Executive Officer and the Chief Risk Officer, with membership representation across risk types, businesses, and lines of defense. The ERMC has a direct escalation path to the Risk Committee and the Risk Committee reviews and approves the charter of the ERMC annually.
There are three types of risk management committees that report to the ERMC: (i) business unit risk committees, which receive reporting and make decisions on risks applicable for a given revenue-generating business unit, and are co-chaired by the business unit head and the business unit chief risk officer; (ii) organizational risk committees, which receive reporting and make decisions associated with a given first line function, and are co-chaired by the first line unit lead and the second line risk type lead; and (iii) horizontal risk committees, which receive reporting and make decisions associated with one or more risk types and are chaired or co-chaired by the second line risk type lead(s). The ERMC delegates authority to these underlying risk management committees through review and approval of their charters on an annual basis.
THREE LINES OF DEFENSE MODEL
As part of our risk governance framework, we have implemented the "three lines of defense" approach to risk management.
The first line of defense is the primary owner of risk-taking and risk management. The first line includes colleagues who are responsible for generating revenue, providing operational support in the delivery of products and services to our customers, or providing technology services for the execution of business activities. All members of the first line are responsible for appropriately assessing and managing all risks associated with their business activities, consistent with our established risk appetite.
The second line of defense supports the Board in defining the framework by which risk should be managed across the enterprise. It then implements the framework by enacting policies, standards and procedures and creating governance structures. Additionally, the second line provides independent review, challenge, monitoring and oversight of first line activities to enforce adherence to the risk framework and determine the action required if first line activities do not align with the framework.
Our Internal Audit Group and Credit Review Group constitute the third line of defense and provide independent assurance by assessing the quality and effectiveness of our processes and systems of internal control, risk management, and risk governance, compliance with applicable regulations, and the reliability and integrity of our financial and operational information.
RISK MANAGEMENT PROCESSES
Risk Appetite
Our risk appetite statement describes the nature and level of risk that we are willing to take. Our risk appetite policy describes the overarching approach through which we set our target risk profile and includes our risk appetite statement, which defines specific risk limits for our principal risks. Our risk appetite statement and risk appetite policy are approved by our Risk Committee at least annually. The second line of defense reports to our Risk Committee on our adherence to risk appetite limits on a quarterly basis.
Risk Identification and Assessment
The purpose of our risk identification and assessment process is to recognize and understand existing risks and risks that may arise from new business initiatives, external market forces, or regulatory or statutory changes, so that these risks can be properly assessed and incorporated into our risk control, monitoring, reporting and escalation processes.
Enterprise Risk Taxonomy
We use a risk taxonomy to identify and categorize our principal risks. This taxonomy provides a common language and discipline for the identification and assessment of risks in existing and new business, products, initiatives and acquisitions. We have six principal risk categories: Strategic, Reputation, Operational and Compliance, Credit, Liquidity and Market.
Strategic Risk Management Process
We define strategic risk as the risk to our current or projected financial condition and resilience arising from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the industry or operating environment, or declining demand for our products and services caused by any other risk.
Strategic decisions are reviewed and approved by business leaders and various risk management committees and must be aligned with our policies and established risk appetite. We seek to manage strategic risk through risk controls embedded in these processes as well as overall risk management oversight over business goals. Launch of key new products as well as existing product performance is reviewed periodically by committees and business leaders to inform business decisions as appropriate. Mergers, acquisitions and divestitures can only be approved following Executive Committee due diligence, a comprehensive risk assessment by operational, market, credit and oversight leaders provided to the Chief Risk Officer and approval by either the Chief Risk Officer or appropriate risk committees. The ERMC and its sub-committees oversee the strategic risks and impacts of decisions and matters brought to the committees.
Reputation Risk Management Process
We define reputational risk as the risk that negative stakeholder reaction to our products, services, client and partner relationships, business activities and policies, management and workplace culture, or our response to unexpected events, could cause sustained critical media coverage, a decline in revenue or investment, talent attrition, litigation, or government or regulatory scrutiny.
Our business leaders are responsible for considering the reputational risk implications of business activities and strategies and ensuring the relevant subject matter experts are engaged as needed. The ERMC is responsible for ensuring reputational risk considerations are included in the scope of appropriate subordinate risk policies and committees and properly reflected in all decisions escalated to the ERMC.
Operational Risk Management Process
We define operational risk as the risk to our current or projected financial condition and resilience arising from inadequate, failed processes or systems, human error or misconduct or adverse external events. Operational risk is inherent in all business activities and can impact an organization through direct or indirect financial loss, brand damage, customer dissatisfaction, or legal and regulatory penalties.
Our operational risk management policy sets forth requirements for (i) the identification of issues and operational risk events, (ii) control enhancements and (iii) reporting of key trends and escalation of risks. There is a range of operational risk types, including process, execution & change; human capital; technology; information security & cybersecurity; third party; data; business disruption; fraud (external and internal); legal; financial reporting; and model risk. Each operational risk type has its own risk management policy that details the requirements and guidelines for managing the specific risk types. Operational risk, in aggregate, is overseen by the Operational Risk and Controls Committee, which is chaired by the Chief Operational Risk Officer.
For additional information regarding cybersecurity risk management & strategy and cybersecurity governance, including information regarding our technology risk and information security program, see Part I, Item 1C. "Cybersecurity."
Compliance Risk Management Process
We define compliance risk as the risk to current or anticipated earnings or capital arising from violations of, or failure to conform to, or comply with, laws or regulations, internal policies, procedures and related practices, or ethical standards.
Our Global Compliance and Ethics organization is responsible for establishing and maintaining our corporate-wide compliance risk management program. Pursuant to this program, we seek to manage and mitigate compliance risk by assessing, controlling, monitoring, measuring and reporting the legal and regulatory risks to which we are exposed.
Our global compliance risk management policy defines the regulatory compliance obligations applicable to our activities and establishes a framework and program for compliance risk management. Certain compliance risk types (e.g., financial crimes, privacy, conduct) have dedicated risk management policies that detail the requirements and guidelines for managing the specific risk type. Compliance risk, in aggregate, is overseen by the Compliance and Conduct Risk Committee, which is chaired by the Chief Compliance Officer. This committee has a dual reporting relationship to both the Risk Committee (through the ERMC) and the ACC. Additionally, a dedicated Financial Crimes Risk Management Committee, chaired by the Head of Financial Crimes Compliance, oversees financial crimes related risk management activities.
Credit Risk Management Process
We define credit risk as the risk to our current or projected financial condition arising from an obligor's failure to meet the terms of any contract with American Express or otherwise perform as agreed. Our credit risks are divided into two broad categories: 1) consumer and small business, and 2) commercial. Each has distinct risk management profiles, capabilities, strategies and tools. Business units that create individual or institutional credit risk exposures of significant importance are supported by dedicated risk management teams, each led by a Chief Credit Officer.
Consumer and small business credit risk arises from consumer and small business credit cards, charge cards and term loans. These portfolios consist of millions of customers across multiple geographies, industries and levels of net worth. We benefit from the high-quality profile of our customers, which is driven by our brand, premium customer servicing, product features and risk management capabilities, which span underwriting, customer management and collections. The risk in these portfolios is generally correlated to broad economic trends, such as unemployment rates and gross domestic product (GDP) growth.
The business unit leaders and their Chief Credit Officers take the lead in managing the credit risk process. These Chief Credit Officers are guided by the Credit and External Fraud Risk Committee, which oversees the implementation and enforcement of the global credit risk management policy and is co-chaired by the Chief Credit Officer and the Head of Financial Risk Management.
Credit risk management is supported by sophisticated proprietary scoring and decision-making models that use up-to-date information on prospects and customers, such as spending and payment history and data feeds from credit bureaus. We have developed data-driven economic decision logic for customer interactions to better serve our customers.
Commercial credit risk arises principally within our CS, ICS and GMNS businesses, as well as investment and liquidity management activities. Unlike consumer and small business credit risk, commercial credit risk is characterized by a lower loss frequency but higher severity. It is affected both by general economic conditions and by client-specific events. The absence of large losses in any given year or over several years is not necessarily representative of the level of risk of institutional portfolios, given the infrequency of loss events in such portfolios.
Similar to consumer and small business credit risk, business units taking commercial credit risks are supported by Chief Credit Officers, who are guided by the Credit and External Fraud Risk Committee. A centralized risk rating unit also provides risk assessment of our institutional obligors.
Liquidity Risk Management Process
We define liquidity risk as the risk to our current or projected financial condition arising from an inability to meet our current and future financial obligations at a reasonable cost when they become due.
Our Board-approved liquidity risk management policy establishes the framework that guides and governs liquidity risk management. The Finance Risk Committee oversees the management of liquidity risk and reviews and approves liquidity stress testing assumptions quarterly and scenarios annually. The Finance Risk Committee also approves our contingent funding plan as well as our funds transfer pricing framework.
The Asset/Liability Management Committee oversees the implementation of the liquidity risk management policy through the establishment of strategies, processes and procedures to manage liquidity risk within our established risk appetite, including annually approving our funding plan and reviewing outcomes of liquidity stress testing, liquidity coverage ratio and net stable funding ratio and adjusting funding and liquidity strategies to align with our risk appetite.
To manage liquidity risk, we seek to maintain access to a diverse set of cash, readily-marketable securities and contingent sources of liquidity, such that we can continuously meet our business requirements and expected future financing obligations for at least a twelve-month period under a variety of adverse circumstances. These include, but are not limited to, an event where we are unable to raise new funds under our regular funding programs during a substantial weakening in economic conditions. We consider the trade-offs between maintaining too much liquidity, which can be costly and limit financial flexibility, and having inadequate liquidity, which may result in financial distress during a liquidity event. Liquidity risk is managed at an aggregate consolidated level as well as at certain subsidiaries in order to ensure that sufficient and accessible liquidity resources are maintained.
Our liquidity risk management processes are designed in alignment with regulatory guidelines. As a Category III firm under U.S. federal bank regulatory agencies' rules, we are subject to heightened capital, liquidity and prudential requirements, including more stringent liquidity risk management requirements. See "Supervision and Regulation - Capital and Liquidity Regulation" under "Business" for more information.
Market Risk Management Process
We define market risk as the risk to our current or projected financial condition, or the value of assets and liabilities, resulting from changes in market values like interest rates, asset prices, or foreign exchange rates. Our market risk exposures include (i) interest rate risk due to changes in the relationship between the interest rates on our assets (such as loans, receivables and investment securities) and the interest rates on our liabilities (such as debt and deposits) and (ii) foreign exchange risk related to transactions, funding, investments and earnings in currencies other than the U.S. dollar.
Our Finance Risk Committee, co-chaired by the Chief Financial Officer and Head of Financial Risk Management, approves our market risk management policy and oversees the management of market risk. Our Asset/Liability Management Committee oversees the implementation of the market risk management policy through the establishment of strategies, processes and procedures to manage market risk within established risk appetite.
Interest Rate Risk
We analyze a variety of interest rate scenarios to inform us of the potential impacts from interest rate changes on earnings and the value of assets, liabilities and the economic value of equity. Our interest rate exposure can vary over time as a result of, among other things, the proportion of our total funding provided by variable and fixed-rate debt and deposits compared to our Card Member loans and receivables. Interest rate swaps are used from time to time to effectively convert debt issuances to variable-rate from fixed-rate, or vice versa. Refer to Note 13 to the "Consolidated Financial Statements" for further discussion of our derivative financial instruments.
To measure the sensitivity of net interest income to interest rate changes, we first project net interest income over the following twelve-month time horizon considering forecasted business growth and anticipated future market interest rates. The impact from rate changes is then measured by instantaneously increasing or decreasing the anticipated future interest rates by the amounts set forth in Table 22 below. Our estimated repricing risk assumes that our interest-rate sensitive assets and liabilities that reprice within the twelve-month horizon generally reprice by the same magnitude, subject to applicable interest rate caps or floors, as benchmark rates change. It is further assumed that, within our interest-rate sensitive liabilities, certain deposits reprice at lower magnitudes and at a more gradual pace than benchmark rate movements. The magnitude and timing of this repricing in turn could depend on, among other factors, the direction of rate changes. These assumptions are consistent with historical deposit repricing experience in the industry and within our own portfolio. In 2025, we refined these forecast assumptions for deposits repricing to better reflect our observed business trends in response to benchmark rate changes. The same net interest income sensitivity analysis as of December 31, 2025 and 2024, using the previous forecast assumptions, is shown in Table 23 below. Actual changes in our net interest income will depend on many factors, and therefore may differ from our estimated risk to changes in market interest rates.
TABLE 22: SENSITIVITY ANALYSIS OF INTEREST RATE CHANGES ON ANNUAL NET INTEREST INCOME AS OF DECEMBER 31, 2025
(Millions)
Instantaneous Parallel Rate Shocks (a)
+200bps +100bps -100bps -200bps
$ 5 $ 19 $ (11) $ (23)
(a)Negative values represent a reduction in net interest income.
TABLE 23: SENSITIVITY ANALYSIS OF INTEREST RATE CHANGES ON ANNUAL NET INTEREST INCOME AS OF DECEMBER 31, 2025 AND 2024, USING PREVIOUS DEPOSITS REPRICING ASSUMPTIONS
(Millions)
Instantaneous Parallel Rate Shocks (a)
+200bps +100bps -100bps -200bps
2025 $ (506) $ (238) $ 248 $ 497
2024 $ (560) $ (224) $ 225 $ 457
(a)Negative values represent a reduction in net interest income.
We use economic value of equity to inform us of the potential impacts from interest rate changes on the net present value of our assets and liabilities under a variety of interest rate scenarios. Economic value of equity is calculated based on our existing assets, liabilities and derivatives, and does not incorporate projected changes in our balance sheet. Key assumptions used in this calculation include the term structure of interest rates, as well as deposit repricing and liquidation profiles used to inform duration and cash flow schedules. The economic value of equity is calculated under multiple interest rate scenarios, including baseline and immediate upward and immediate downward interest rate shocks, to assess its sensitivity to changes in interest rates. Our current sensitivity profile demonstrates that our economic value of equity generally decreases in a declining interest rate scenario and increases in an increasing interest rate scenario. The level of this sensitivity is managed within board-approved policy limits.
Foreign Exchange Risk
Foreign exchange exposures arise in four principal ways: (1) Card Member spending in currencies that are not the billing currency, (2) cross-currency transactions and balances from our funding activities, (3) cross-currency investing activities, such as in the equity of foreign subsidiaries, and (4) revenues generated and expenses incurred in foreign currencies, which impact earnings.
These foreign exchange risks are managed primarily by entering into foreign exchange spot transactions or hedged with foreign exchange forward contracts when the hedge costs are economically justified and in notional amounts designed to offset pretax impacts from currency movements in the period in which they occur. As of December 31, 2025, foreign currency derivative instruments with total notional amounts of approximately $54 billion were outstanding.
With respect to Card Member spending and cross-currency transactions, including related foreign exchange forward contracts outstanding, the impact of a hypothetical 10 percent strengthening of the U.S. dollar would have been immaterial to projected earnings as of December 31, 2025. With respect to translation exposure of foreign subsidiary equity balances, including related foreign exchange forward contracts outstanding, a hypothetical 10 percent strengthening of the U.S. dollar would result in an immaterial reduction in other comprehensive income and equity as of December 31, 2025. With respect to anticipated earnings denominated in foreign currencies for the next twelve months, the adverse impact on pretax income of a hypothetical 10 percent strengthening of the U.S. dollar, net of hedges, would be approximately $200 million as of December 31, 2025.
The actual impact of interest rate and foreign exchange rate changes will depend on, among other factors, the timing of rate changes, the extent to which different rates do not move in the same direction or in the same direction to the same degree, changes in the cost, volume and mix of our hedging activities and changes in the volume and mix of our businesses.
CRITICAL ACCOUNTING ESTIMATES
Refer to Note 1 to the "Consolidated Financial Statements" for a summary of our significant accounting policies. Certain of our accounting policies requiring significant management assumptions and judgments are as follows:
RESERVES FOR CARD MEMBER CREDIT LOSSES
Reserves for Card Member credit losses represent our best estimate of the expected credit losses in our outstanding portfolio of Card Member loans and receivables as of the balance sheet date. The CECL methodology requires us to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period (R&S Period) beyond the balance sheet date.
In estimating expected credit losses, we use a combination of statistically based models and analysis of the results produced by these models to determine the quantitative and qualitative components of our total balance sheet reserves for credit losses. These quantitative and qualitative components entail a significant amount of judgment. The primary areas of judgment used in measuring the quantitative components of our reserves relate to the determination of the appropriate R&S Period, the modeling of the probability of and exposure at default, and the methodology to incorporate current and future economic conditions. We use these models and assumptions, combined with historical loss experience, to determine the reserve rates that are applied to the outstanding loan or receivable balances to produce our reserves for expected credit losses for the R&S Period. The qualitative component is intended to capture expected losses that may not have been fully captured in the quantitative component. Through an established governance structure, we consider certain external and internal factors, including emerging portfolio characteristics and trends, which consequentially may increase or decrease the reserves for Card Member credit losses.
The R&S Period, which is approximately three years, represents the maximum time-period beyond the balance sheet date over which we can reasonably estimate expected credit losses, using all available portfolio information, current economic conditions and forecasts of future economic conditions. Card Member loan products do not have a contractual term and balances can revolve if minimum required payments are made, causing some balances to remain outstanding beyond the R&S Period. To determine expected credit losses beyond the R&S Period, we immediately revert to long-term average loss rates. Card Member receivable products are contractually required to be paid in full; therefore, we have assumed the balances will be either paid or written-off no later than 180 days past due.
Within the R&S Period, our models use past loss experience and current and future economic conditions to estimate the probability of default, exposure at default and expected recoveries to estimate net losses at default. A significant area of judgment relates to how we apply future Card Member payments to the reporting period balances when determining the exposure at default. The nature of revolving loan products inherently includes a relationship between future payments and spend behavior, which creates complexity in the application of how future payments are either partially or entirely attributable to the existing balance at the end of the reporting period. Using historical customer behavior and other factors, we have assumed that future payments are first allocated to interest and fees associated with the reporting period balance and future spend. We then allocate a portion of the payment to the estimated higher minimum payment amount due because of any future spend. Any remaining portion of the future payment is then allocated to the remaining reporting period balance.
CECL requires that the R&S Period include an assumption about current and future economic conditions. We incorporate multiple macroeconomic scenarios provided to us by an independent third party. The estimated credit losses calculated from each macroeconomic scenario are reviewed each period and weighted to reflect management's judgment about uncertainty surrounding these scenarios. These macroeconomic scenarios contain certain variables, including unemployment rates and real GDP, that are significant to our models.
Macroeconomic Sensitivity
To demonstrate the sensitivity of estimated credit losses to the macroeconomic scenarios, we compared our modeled estimates under a baseline scenario to that under a pessimistic downside scenario. As of December 31, 2025, for every 10 percentage points change in weighting from the baseline scenario to the pessimistic downside scenario, the estimated credit losses increased by approximately $220 million.
The modeled estimates under these scenarios were influenced by the duration, severity and timing of changes in economic variables within each scenario and these macroeconomic scenarios, under different conditions or using different assumptions, could result in significantly different estimated credit losses. It is difficult to estimate how potential changes in specific factors might affect the estimated credit losses, and current results may not be indicative of the potential future impact of macroeconomic forecast changes.
In addition, this sensitivity analysis relates only to the modeled credit loss estimates under two scenarios without considering management's judgment on the relative weighting for those and other scenarios, including the weight that has been placed on the downside scenario at the balance sheet date, or any potential changes in other adjustments to the quantitative reserve component or the impact of management judgment for the qualitative reserve component, which may have a positive or negative effect on the results. Thus, the results of this sensitivity analysis are hypothetical and are not intended to estimate or reflect our expectations of any changes in the overall reserves for credit losses due to changes in the macroeconomic environment.
Refer to Note 3 to the "Consolidated Financial Statements" for further information on the range of macroeconomic scenario key variables used, in conjunction with other inputs described above, to calculate reserves for Card Member credit losses.
The process of estimating these reserves requires a high degree of judgment. To the extent our expected credit loss models are not indicative of future performance, actual losses could differ significantly from our judgments and expectations, resulting in either higher or lower future provisions for credit losses in any period.
LIABILITY FOR MEMBERSHIP REWARDS
The Membership Rewards program is our largest card-based rewards program. Card Members can earn points for purchases charged on their enrolled card products. A significant portion of our cards, by their terms, allow Card Members to earn bonus points for purchases at merchants in particular industry categories. Membership Rewards points are redeemable for a broad variety of rewards, including, but not limited to, travel, shopping, gift cards, and statement credits. Points typically do not expire, and there is no limit on the number of points a Card Member may earn. Membership Rewards expense is driven by charge volume on enrolled cards, customer participation in the program and contractual arrangements with redemption partners.
We record a Membership Rewards liability that represents our best estimate of the cost of points earned that are expected to be redeemed by Card Members in the future. The Membership Rewards liability is impacted over time by enrollment levels, attrition, the volume of points earned and redeemed, and the associated redemption costs. We estimate the Membership Rewards liability by determining the URR and the weighted average cost (WAC) per point, which are applied to the points of current enrollees. Refer to Note 9 to the "Consolidated Financial Statements" for additional information.
The URR assumption is used to estimate the number of points earned by current enrollees that will ultimately be redeemed in future periods. We use statistical and actuarial models to estimate the URR of points earned to date by current Card Members based on redemption trends, card product type, enrollment tenure, card spend levels and credit attributes. The WAC per point assumption is used to estimate future redemption costs and is primarily based on redemption choices made by Card Members, reward offerings by partners, and Membership Rewards program changes. The WAC per point assumption is derived from 12 months of redemptions and is adjusted as appropriate for certain changes in redemption costs that are not representative of future cost expectations and expected developments in redemption patterns.
We periodically evaluate our liability estimation process and assumptions based on changes in cost per point redeemed, partner contract changes and developments in redemption patterns, which may be impacted by product refreshes, changes in redemption options and mix of proprietary cards-in-force.
The process of estimating the Membership Rewards liability includes a high degree of judgment. Actual redemptions and associated redemption costs could differ significantly from our estimates, resulting in either higher or lower Membership Rewards expense.
Changes in the Membership Rewards URR and WAC per point have the effect of either increasing or decreasing the liability through the current period Membership Rewards expense by an amount estimated to cover the cost of all points previously earned but not yet redeemed by current enrollees as of the end of the reporting period. As of December 31, 2025, an increase in the estimated URR of current enrollees of 25 basis points would increase the Membership Rewards liability and corresponding rewards expense by approximately $229 million. Similarly, an increase in the WAC per point of 1 basis point would increase the Membership Rewards liability and corresponding rewards expense by approximately $244 million.
GOODWILL RECOVERABILITY
Goodwill represents the excess of acquisition cost of an acquired business over the fair value of assets acquired and liabilities assumed. Goodwill is not amortized but is tested for impairment at the reporting unit level annually or when events or circumstances arise, such as adverse changes in the business environment, that would more likely than not reduce the fair value of the reporting unit below its carrying value. Our methodology for conducting this goodwill impairment testing contains both a qualitative and quantitative assessment.
We have the option to initially perform an assessment of qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other company and reporting unit-specific events. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we then perform the impairment evaluation using a more detailed quantitative assessment. We could also directly perform this quantitative assessment for any reporting unit, bypassing the qualitative assessment.
Our methodology for conducting the quantitative goodwill impairment testing is fundamentally based on the measurement of fair value for our reporting units, which inherently entails the use of significant management judgment. For valuation, we use a combination of the income approach (discounted cash flows) and market approach (market multiples) in estimating the fair value of our reporting units.
When preparing discounted cash flow models under the income approach, we estimate future cash flows using the reporting unit's internal multi-year forecast, and a terminal value calculated using a growth rate that we believe is appropriate in light of current and expected future economic conditions. To discount these cash flows we use our expected cost of equity, determined using a capital asset pricing model. When using the market method under the market approach, we apply comparable publicly traded companies' multiples (e.g., earnings, revenues) to our reporting units' operating results. The judgment in estimating forecasted cash flows, discount rates and market comparables is significant, and imprecision could materially affect the fair value of our reporting units.
We could be exposed to an increased risk of goodwill impairment if future operating results or macroeconomic conditions differ significantly from management's current assumptions.
INCOME TAXES
We are subject to the income tax laws of the United States, its states and municipalities and those of the foreign jurisdictions in which we operate. These tax laws are complex, and the manner in which they apply to the taxpayer's facts is sometimes open to interpretation. In establishing a provision for income tax expense, we must make judgments about the application of inherently complex tax laws.
Unrecognized Tax Benefits
We establish a liability for unrecognized tax benefits, which are the differences between a tax position taken or expected to be taken in a tax return and the benefit recognized in the financial statements.
In establishing a liability for an unrecognized tax benefit, assumptions may be made in determining whether, and the extent to which, a tax position should be sustained. A tax position is recognized only when it is more likely than not to be sustained upon examination by the relevant taxing authority, based on its technical merits. The amount of tax benefit recognized is the largest benefit that we believe is more likely than not to be realized on ultimate settlement. As new information becomes available, we evaluate our tax positions and adjust our unrecognized tax benefits, as appropriate.
Tax benefits ultimately realized can differ from amounts previously recognized due to uncertainties, with any such differences generally impacting the provision for income tax.
Deferred Tax Asset Realization
Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using the enacted tax rates expected to be in effect for the years in which the differences are expected to reverse.
Since deferred taxes measure the future tax effects of items recognized in the Consolidated Financial Statements, certain estimates and assumptions are required to determine whether it is more likely than not that all or some portion of the benefit of a deferred tax asset will not be realized. In making this assessment, we analyze and estimate the impact of future taxable income, reversing temporary differences and available tax planning strategies. These assessments are performed quarterly, taking into account any new information.
Changes in facts or circumstances can lead to changes in the ultimate realization of deferred tax assets due to uncertainties.
OTHER MATTERS
RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS
Refer to the Recently Adopted and Issued Accounting Standards section of Note 1 to the "Consolidated Financial Statements."
GLOSSARY OF SELECTED TERMINOLOGY
Allocated service costs - Represents salaries and benefits associated with our technology and customer servicing groups, allocated based on activities directly attributable to our reportable operating segments, as well as overhead expenses, which are allocated to our reportable operating segments based on their relative levels of revenue and Card Member loans and receivables.
Asset securitizations- Asset securitization involves the transfer and sale of loans or receivables to a special-purpose entity created for the securitization activity, typically a trust. The trust, in turn, issues securities, commonly referred to as asset-backed securities that are secured by the transferred loans and receivables. The trust uses the proceeds from the sale of such securities to pay the purchase price for the transferred loans or receivables. The securitized loans and receivables of our Lending Trust and Charge Trust (collectively, the Trusts) are reported as assets and the securities issued by the Trusts are reported as liabilities on our Consolidated Balance Sheets.
Billed business(Card Member spending) - Represents transaction volumes (including cash advances) on payment products issued by American Express.
Card Member- The individual holder of an issued American Express-branded card.
Card Member loans- Represents balances on our credit card products and revolve-eligible balances on our charge card products.
Card Member receivables- Represents balances on our charge card products that need to be paid in full on or before the Card Member's payment due date.
Cards-in-force- Represents the number of cards that are issued and outstanding by American Express (proprietary cards-in-force) and cards issued and outstanding under network partnership agreements with banks and other institutions, except for retail cobrand cards issued by network partners that had no out-of-store spending activity during the prior twelve months. Basic cards-in-forceexcludes supplemental cards issued on consumer accounts. Cards-in-force is useful in understanding the size of our Card Member base.
Charge cards- Represents cards that generally carry no pre-set spending limits and are primarily designed as a method of payment and not as a means of financing purchases. Each transaction on a charge card with no pre-set spending limit is authorized based on its likely economics reflecting a Card Member's most recent credit information and spend patterns. Charge Card Members must pay the full amount of balances billed each month, with the exception of balances that can be revolved under lending features offered on certain charge cards, such as Pay Over Time and Plan It®, that allow Card Members to pay for eligible purchases with interest over time.
Cobrand cards- Represents cards issued under cobrand agreements with selected commercial partners. Pursuant to the cobrand agreements, we make payments to our cobrand partners, which can be significant, based primarily on the amount of Card Member spending and corresponding rewards earned on such spending and, under certain arrangements, on the number of accounts acquired and retained. The partner is then liable for providing rewards to the Card Member under the cobrand partner's own loyalty program.
Credit cards- Represents cards that have a range of revolving payment terms, structured payment features (e.g., Plan It, Expanded Buying Power), grace periods, and rate and fee structures.
Discount revenue- Primarily represents the amount we earn and retain from the merchant payable for facilitating transactions between Card Members and merchants on payment products issued by American Express.
Goods & Services (G&S) spend- Includes spend in merchant categories other than T&E-related merchant categories, which includes B2B spending by small and mid-sized enterprise customers in our CS and ICS segments.
Interest expense- Includes interest incurred primarily to fund Card Member loans and receivables, general corporate purposes and liquidity needs. Interest expense is divided principally into two categories: (i) deposits, which primarily relates to interest expense on deposits taken from customers and institutions, and (ii) debt, which primarily relates to interest expense on our long-term financing and short-term borrowings, (e.g., commercial paper, federal funds purchased, bank overdrafts and other short-term borrowings), as well as the realized impact of derivatives hedging interest rate risk on our long-term debt.
Interest income- Includes (i) interest on loans, (ii) interest and dividends on investment securities and (iii) interest income on deposits with banks and other.
Interest on loans- Assessed using the average daily balance method for Card Member loans. Unless the loan is classified as non-accrual, interest is recognized based upon the principal amount outstanding in accordance with the terms of the applicable account agreement until the outstanding balance is paid or written off.
Interest and dividends on investment securities- Primarily relates to our performing fixed-income securities. Interest income is recognized using the effective interest method, which adjusts the yield for security premiums and discounts, fees and other payments, so a constant rate of return is recognized on the outstanding balance of the related investment security throughout its term. Amounts are recognized until securities are in default or when it is likely that future interest payments will not be made as scheduled.
Interest income on deposits with banks and other- Primarily relates to the placement of cash in excess of near-term funding requirements in interest-bearing time deposits, overnight sweep accounts, and other interest-bearing demand and call accounts.
Locations in force (LIF) - Represents proprietary and partner acquired merchant locations where the merchant is enabled to accept American Express. LIF estimates incorporate data provided to us by certain third parties and include merchants that accept American Express through payment facilitators and merchants that accept American Express through digital wallets.
Loyalty coalitions - Programs that enable consumers to earn rewards points and use them to save on purchases from a variety of participating merchants through multi-category rewards platforms. Merchants in these programs generally fund the consumer offers and are responsible to us for the cost of rewards points; we earn revenue from operating the loyalty platform and by providing marketing support.
Net card fees- Represents the card membership fees earned during the period recognized as revenue over the covered card membership period (typically one year), net of the provision for projected refunds for Card Membership cancellation and deferred acquisition costs.
Net interest yield -Represents net interest income, computed on an annualized basis, as applicable, divided by average Card Member loans, Card Member loans HFS, Other loans and Card Member receivables. Reserves and net write-offs related to uncollectible interest are recorded through provision for credit losses and are thus not included in the net interest yield calculation.
Net write-off rate- principal only- Represents the amount of proprietary consumer or small business Card Member loans or receivables written off, consisting of principal (resulting from authorized transactions), less recoveries, as a percentage of the average loan or receivable balance during the period.
Net write-off rate- principal, interest and fees- Includes, in the calculation of the net write-off rate, amounts for interest and fees in addition to principal for Card Member loans, and fees in addition to principal for Card Member receivables.
Network partnership revenue- Represents revenues related to network partnership agreements, comprising royalties, fees and amounts earned for facilitating transactions on cards issued by network partners. Network partnership revenue also includes fees earned on alternative payment solutions facilitated by American Express.
Network volumes- Represents total transaction volumes (including cash advances) on payments products issued by American Express and under network partnership agreements with banks and other institutions, including joint ventures, as well as alternative payment solutions facilitated by American Express.
Operating expenses- Represents salaries and employee benefits, professional services, data processing and equipment, and other expenses.
Other loans - Represents balances on non-card payment and financing products that are not associated with a Card Member agreement, and instead are governed by a separate borrowing relationship. Other loans consist primarily of consumer installment loans and lines of credit offered to small business customers.
Proprietary new cards acquired - Represents the number of new cards issued by American Express during the referenced period, net of replacement cards. Proprietary new cards acquired is useful as a measure of the effectiveness of our customer acquisition strategy.
Reserve build (release) - Represents the portion of the provisions for credit losses for the period related to increasing or decreasing reserves for credit losses as a result of, among other things, changes in volumes, macroeconomic outlook, portfolio composition and credit quality of portfolios. Reserve build represents the amount by which the provision for credit losses exceeds net write-offs, while reserve release represents the amount by which net write-offs exceed the provision for credit losses.
T&E spend- Represents spend on travel and entertainment, which primarily includes airline, cruise, lodging and dining merchant categories.
See "Consolidated Capital Resources and Liquidity - Capital Strategy" for definitions of our regulatory risk-based capital and leverage ratios.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. The forward-looking statements, which address our current expectations regarding business and financial performance, among other matters, contain words such as "believe," "expect," "anticipate," "intend," "plan," "aim," "will," "may," "should," "could," "would," "likely," "estimate," "potential," "continue" 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. We undertake 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:
•our ability to grow earnings per share in the future, which will depend in part on revenue growth, credit performance, credit reserve and expense levels and the effective tax rate remaining consistent with current expectations and our ability to continue executing our investment philosophy, including investing at high levels in areas that can drive sustainable growth (such as our brand, value propositions, coverage, marketing, technology, partnerships and talent), controlling operating expenses, effectively managing risk and executing our share repurchase program, any of which could be impacted by, among other things, the factors identified in the subsequent paragraphs as well as the following: macroeconomic and geopolitical conditions, including a slowdown in U.S. or global economic growth, changes to consumer and business confidence, higher rates of unemployment, global trade relations and the effects of announced or future tariffs, international tensions, hostilities and instability, changes in interest rates, inflation, supply chain issues, market volatility, government shutdowns and fiscal and monetary policies; the impact of any future contingencies, including, but not limited to, legal costs and settlements, the imposition of fines or monetary penalties, increases in Card Member remediation, investment gains or losses, restructurings, impairments and changes in reserves; issues impacting brand perceptions and our reputation; changes in the competitive environment; impacts related to acquisitions, cobrand relationships and other partners, portfolio sales, joint ventures and other investments; and the impact of regulation and litigation, which could affect the profitability of our business activities, limit our ability to pursue business opportunities, require changes to business practices or alter our relationships with Card Members, partners and merchants;
•our ability to grow revenues net of interest expense and the sustainability of our future growth, which could be impacted by, among other things, the factors identified above and in the subsequent paragraphs, as well as the following: spending volumes and the spending environment not being consistent with expectations, including spending by U.S. consumer and small & mid-sized business Card Members, such as due to uncertain business and economic conditions; an inability to address competitive pressures, attract and retain customers, invest in and enhance our Membership Model of premium products, differentiated services and partnerships, successfully refresh our card products (e.g., the U.S. Consumer and Business Platinum Card refreshes), grow spending and lending with customers across age cohorts (including Millennial and Gen-Z customers) and commercial segments and implement strategies and business initiatives, including within the premium consumer space, commercial payments and the global network; the effects of regulatory initiatives, including pricing regulation, such as potential credit card interest rate caps, and network regulation; merchant coverage growing less than expected or the reduction of merchant acceptance or the perception of coverage; increased surcharging, steering, suppression or other differential acceptance practices with respect to our products; merchant discount rates changing from our expectations; and changes in foreign currency exchange rates;
•net card fee revenues not performing consistently with expectations, which could be impacted by, among other things, the pace of Card Member acquisition activity and demand for our fee-based products; higher Card Member attrition rates; the success and timing of our refreshes of our card products (including U.S. Consumer and Business Platinum Card acquisition and retention levels following the refreshes); a decrease in the ability and desire of Card Members to pay card fees, such as due to a deterioration in macroeconomic conditions or as a result of changes in card fees; the competitive environment and the perception of the value provided by premium cards; regulatory initiatives impacting card fees; and our inability to deliver and enhance benefits and services, innovate with respect to our products and develop attractive premium value propositions for new and existing customers;
•net interest income, the effects of changes in interest rates and the growth of loans and Card Member receivables outstanding and revolving balances, being higher or lower than expectations, which could be impacted by, among other things, the behavior and financial strength of Card Members and their actual spending, borrowing and paydown patterns; the effectiveness of our strategies to enhance Card Member value propositions, grow lending with premium customers and capture a greater share of Card Members' spending and borrowings and attract new, and retain existing, customers; our ability to effectively introduce and enhance lending features on our products and manage underwriting risk; governmental actions to cap credit card interest rates; changes in benchmark interest rates, including where such changes affect our assets or liabilities differently than expected; our ability to grow deposits, including from Card Members; continued volatility and other changes in capital and credit market conditions and the availability and cost of capital; credit actions, including line size and other adjustments to credit availability; the yield on Card Member loans differing from current expectations; and loss or impacts to cobrand relationships;
•future credit performance, the level of future delinquency, reserve and write-off rates and the amount and timing of future reserve builds and releases, which will depend in part on macroeconomic factors such as actual and projected unemployment rates and GDP; the ability and willingness of Card Members to pay amounts owed to us; changes in loans and receivables outstanding, such as from the implementation of our strategy to capture spending and borrowings, or from changes in consumer behavior that affect loan and receivable balances (e.g., paydown and revolve rates); changes in the levels of customer acquisitions and the credit profiles of new customers acquired; financial stress and volume of bankruptcies of Card Members and business partners; credit-related fraud levels; card portfolio sales; the magnitude of seasonal fluctuations in credit metrics; the enrollment in, and effectiveness of, financial relief programs and the performance of accounts as they exit from such programs; the effects of the resumption of student loan repayments; collections capabilities and recoveries of previously written-off loans and receivables; and the impact of the usage of debt settlement companies;
•the actual amount to be spent on Card Member rewards and services and business development, and the relationship of these variable customer engagement costs to revenues, which could be impacted by the investments and enhancements that we make with respect to our value propositions, including our reward programs and product benefits, such as in connection with card refreshes (e.g., recently introduced U.S. Consumer and Business Platinum Card benefits), to make them attractive to Card Members and prospective customers, potentially in a manner that is not cost-effective; changes in the level of Card Member spending and spending patterns (including the level of spend in bonus categories), the redemption of rewards and offers (including travel redemptions) and usage of travel-, lifestyle- and business-related benefits; the costs related to reward point redemptions; levels of Card Member acquisitions on premium card products; changes in our models or assumptions used to estimate these expenses; new and renegotiated contractual obligations with business partners, which may be affected by business partners with greater scale and leverage; our ability to identify and negotiate partner-funded value for Card Members; and the pace and cost of the expansion of our global lounge collection;
•the actual amount we spend on marketing in the future and the effectiveness and efficiency of our marketing spend, which will be based in part on continued changes in the macroeconomic and competitive environment and business performance, including the levels of demand for our products; our ability to realize marketing efficiencies, including as a result of investments in our product value propositions and the use of technology, such as the personalization of offers, and balance expense control and investments in the business; management's investment optimization process and its ability to develop premium value propositions and drive customer demand; management's identification and assessment of attractive investment opportunities and decisions regarding the timing of investments; and the receptivity of Card Members and prospective customers to advertising and customer acquisition initiatives;
•our ability to control operating expenses, including relative to revenue growth, and the actual amount we spend on operating expenses in the future, which could be impacted by, among other things, salary and benefit expenses to attract and retain talent; our ability to realize operational efficiencies, including through increased scale and automation and continued adoption of AI technologies; management's ability to balance expense control and investments in the business and its decisions regarding spending in such areas as technology, business and product development, sales force, premium servicing and digital capabilities; our ability to innovate efficient channels of customer interactions and the willingness of Card Members to self-service and address issues through digital channels; restructuring activity; fraud costs; inflation and supply chain issues; increased technology costs, including investments in technology innovations and system upgrades; expenses related to enterprise risk management and compliance and consulting, legal and other professional services fees, including as a result of our growth, litigation and internal and regulatory reviews; the impact of changes in foreign currency exchange rates on costs; regulatory assessments; the level of M&A activity and related expenses; information security or cybersecurity incidents; the payment of fines, penalties, disgorgement, restitution, non-income tax assessments and litigation-related settlements; the performance of Amex Ventures and other of our investments; and impairments of goodwill or other assets;
•our tax rate not remaining consistent with expectations, which could be impacted by, among other things, further changes in tax laws and regulation, the implementation by jurisdictions of the Organization for Economic Cooperation and Development's global minimum tax guidelines (including safe harbors for U.S. multinational enterprises), our geographic mix of income, unfavorable tax audits, assessments and tax litigation outcomes, and the occurrence or nonoccurrence of other discrete tax items;
•changes affecting our plans regarding the return of capital to shareholders, including increasing the level of the dividend, which will depend on factors such as our capital levels and regulatory capital ratios; the results of our stress testing and capital planning process and new rulemakings and guidance from the Federal Reserve and other banking regulators, including changes to regulatory capital requirements, such as from the U.S. federal bank regulatory agencies' Basel III rulemaking; our results of operations and financial condition; our credit ratings and rating agency considerations; required company approvals; and the economic environment and market conditions in any given period;
•changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure and competitor settlements that may materially impact the prices charged to merchants that accept American Express cards; merchant acceptance, surcharging, steering and other differential acceptance practices; the desirability of competitor premium card products and competition for partnerships and premium experiences, services and benefits; competition for new and existing cobrand relationships; competition from new and non-traditional competitors, such as financial technology companies, and with respect to new products, services and technologies, such as the emergence or increase in popularity of agentic commerce, digital payment platforms and currencies and other alternative payment mechanisms; competitor acquisitions and transactions; and the success of marketing, promotion, rewards programs, offers and travel-, lifestyle- and business-related benefits (e.g., lounges, dining, entertainment and business tools);
•our ability to sustain our momentum and leadership in the premium consumer space, including with Millennial and Gen-Z consumers, and the success of the refresh of our U.S. Consumer Platinum Card®, which will be impacted in part by competition, levels of consumer demand for premium card products, brand perceptions (including perceptions related to merchant coverage) and reputation, and our ability to develop and market new benefits, services, experiences and other value propositions, as well as new digital capabilities, that appeal to Card Members and new customers, grow spending with new and younger age cohort Card Members, offer attractive services and rewards programs and build greater customer loyalty, which will depend in part on identifying and funding investment opportunities, addressing changing customer behaviors, new product innovation and development, Card Member acquisition efforts and enrollment processes, including through digital channels, continuing to realize benefits from strategic partnerships, successfully implementing our dining strategy and evolving our infrastructure to support new products, services and benefits;
•our ability to build on our leadership in commercial payments and the success of the refresh of our U.S. Business Platinum Card®, which will depend in part on competition, including from financial technology companies and as a result of competitor acquisitions and transactions; the willingness and ability of companies to use credit and charge cards for procurement and other business expenditures as well as use our other products and services for financing needs; the acceptance of, and economics related to, B2B payment platforms; our ability to offer attractive value propositions and new products to current and potential customers; our ability to enhance and expand our payment, lending, cash flow and expense management solutions, including the release of a suite of offerings for small & mid-sized business customers, increase customer engagement, and build out a multi-product digital ecosystem to integrate our broad product set, which is dependent on our continued investment in capabilities, features, functionalities, platforms and technologies and the successful integration of, and introduction of, and capabilities related to, our Center acquisition; and the success of our initiatives to support businesses, such as Small Business Saturday and other Shop Small campaigns;
•our ability to expand merchant coverage globally and our success, as well as the success of third-party merchant acquirers, processors and payment facilitators, in signing merchants to accept American Express, which will depend on, among other factors, the value propositions offered to merchants and merchant acquirers for card acceptance, the awareness and willingness of Card Members to use American Express cards at merchants, scaling marketing and expanding programs to increase card usage, identifying and growing acceptance in low- and new-to-plastic industries and businesses as they form, working with commercial buyers and suppliers to establish B2B acceptance, executing on our plans to increase coverage in priority international cities, destinations, countries and industry verticals, merchant point-of-sale practices, and continued network investments, including in capabilities that allow for greater digital integration and modernization of our authorization platform;
•our ability to successfully invest in, benefit from and expand the use of technological developments, digital payments, servicing, travel & dining solutions, generative AI and other technological capabilities, which will depend in part on our success in evolving our products and processes for the digital environment and agentic commerce; developing new features in our applications and platforms and enhancing our digital channels; effectively utilizing AI & ML and increasing automation, including to enhance our products, develop new capabilities and address servicing and other business and customer needs; supporting the use of our products as a means of payment through online, mobile, agentic and other digital channels; building partnerships and executing programs with other companies; and effectively utilizing data and data & analytics platforms, including successfully migrating to new platforms, all of which will be impacted by investment levels, customer and colleague receptiveness and ability to adopt new technologies, new product innovation and development and the platforms and infrastructure to support new products, services, benefits and partner integrations;
•our ability to grow internationally, which could be impacted by regulation and business practices, such as those capping interchange or other fees, mandating network access or data localization, imposing greater requirements on payment networks, favoring local competitors or prohibiting or limiting foreign ownership of certain businesses; perceptions of our brand in international jurisdictions; our inability to successfully replicate aspects of our business model internationally and tailor products and services to make them attractive to local customers; competitors with more scale, local experience and established relationships with relevant customers, regulators and industry participants; the success of us and our network partners in acquiring Card Members and/or merchants; and geopolitical and economic instability, hostilities and tensions (such as involving China and the U.S.), and impacts to cross-border trade and travel;
•our ability to successfully implement our dining strategy and grow our dining platform, which will depend in part on our ability to grow the number of diners, restaurants and other bookable venues using the platform and transactions on the platform; expand and innovate in the tools and capabilities offered through the platform, including integrating the Tock and Rooam acquisitions and benefiting from their added capabilities, users and/or bookable venues; successfully implement partnerships and compete with other dining platforms and means of booking venues; and effectively utilize our dining platform and dining partnerships to provide value to Card Members and merchants and sell our products and services;
•a failure in or breach of our operational or security systems, processes or infrastructure, or those of third parties, including as a result of cyberattacks or outages, which could compromise the confidentiality, integrity, privacy and/or security of data, disrupt our or our partners' operations, reduce the use and acceptance of American Express cards or our digital platforms and lead to regulatory scrutiny, litigation, remediation and response costs and reputational harm;
•changes in capital and credit market conditions, including those resulting from recent volatility, which may significantly affect our ability to meet our liquidity needs and expectations regarding capital ratios; our access to capital and funding costs; the valuation of our assets; and our credit ratings or those of our subsidiaries;
•our funding plan being implemented in a manner inconsistent with current expectations, which will depend on various factors such as future business growth, liquidity needs, the impact of global economic, political and other events on market capacity, demand for securities we offer, regulatory changes, our ability to securitize and sell loans and receivables and the performance of loans and receivables previously sold in securitization transactions;
•legal and regulatory developments, which could affect the profitability of our business activities; limit our ability to pursue business opportunities or conduct business in certain jurisdictions; require changes to business practices or governance, or alter our relationships with Card Members, partners, merchants and other third parties, including affecting our network operations and practices governing merchant acceptance, as well as our ability to continue certain cobrand relationships in the EU; impact interest income, card fees and rewards programs; exert further pressure on merchant discount rates and our network business, as well as result in an increase in surcharging, steering or other differential acceptance practices; alter the competitive landscape; subject us to heightened regulatory scrutiny and result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to Card Members or the imposition of fines or monetary penalties; materially affect capital or liquidity requirements, results of operations or ability to pay dividends; or result in harm to the American Express brand;
•changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings, financial distress or consolidations, including of cobrand partners, merchants that represent a significant portion of our business, network partners or financial institutions that we rely on for routine funding and liquidity, which could materially affect our financial condition or results of operations; and
•factors beyond our control such as business, economic and geopolitical conditions, consumer and business confidence and spending generally, unemployment rates, market volatility, energy costs, government shutdowns and other political developments, further escalations or widening of international tensions, regional hostilities and military conflicts (such as in the Middle East and Ukraine), adverse developments affecting third parties, including other financial institutions, merchants, partners or vendors, as well as severe weather conditions and natural disasters (e.g., hurricanes and wildfires), power loss, disruptions in telecommunications, pandemics, terrorism and other catastrophic events, any of which could significantly affect demand for and spending on American Express cards, credit metrics and reserves, loan and receivable balances, deposit levels and other aspects of our business and results of operations or disrupt our global network systems and ability to process transactions.
A further description of these uncertainties and other risks can be found in "Risk Factors" and our other reports filed with the SEC.
American Express Company published this content on February 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 06, 2026 at 17:33 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]