And ladies and gentlemen, thank you for standing by. Welcome to the American Express Q3 2021 earnings call. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. [Operator instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to our host, Head of Investor Relations, Ms. Vivian Zhou. Please go ahead.

Thank you, Brad. And thank you all for joining today's call. As a reminder, before we begin, today's discussion contains forward-looking statements about the Company's future business and financial performance. These are based on management's expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides or reports on file with the SEC. The discussion today also contains non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings, as well as the earnings materials for prior periods we discussed. All of these are posted on our website ir. americanexpress.com. We will begin today with the Steve Squeri Chairman and CEO with some remarks about the Company's progress and results, and then Jeff Campbell, Chief Financial Officer will provide a more detailed review of our financial performance. After that, we will move to a Q&A session on the results with both Steve and Jeff. With that, let me turn it over to Steve.

Thanks Vivian and hello, everyone. Welcome to our Third Quarter Earnings Call. Earlier today, we reported third quarter revenues as 10.9 billion up 25% over last year's third quarter, and earnings per share of $2.27. These strong results once again reflect accelerating momentum in our core business as billings on our network reached record highs for the third quarter, driven by goods and services spending. In my remarks this morning, I want to put into context the decisions that we've made, pre -pandemic, when the pandemic hit, and during the pandemic to drive the growth we are now seeing, and the increased confidence we now have in our business model. In 2018, we introduced the new financial growth algorithm, which call for high single-digit revenue growth and double-digit EPS growth. Prior to the pandemic, we achieved those objectives for 10 straight quarters through focused and increased investment levels in our business. We executed strategies for profitably growing the business which were based on initiatives to attract new customers and deepen relationships with existing customers in both our consumer and commercial businesses. And while our differentiated business model gave us confidence in our ability to capitalize on the opportunities we saw, we also knew that the favorable economic conditions we had at the time could change. So we also developed a plan for winning through the down cycle that's focused on protecting our customers and our colleagues and maintaining our capital strength while investing strategically and at the right time to rebuild momentum so we could win during the recovery. Through it at all the driving force behind everything we do from product innovations to our investments decisions is to continue to make the American Express brand special and back our customers. Over the last several years, we focused our strategies…

Well, thanks, Steve. And good morning, everyone. It's good to be here today to talk about our third quarter results, which reflects strong momentum in our core business driven by the investment strategy that Steve just spoke about. You see this momentum in our summary financials on Slide 2 with third quarter revenues of $10.9 billion up 24% year-over-year on an FX, adjusted basis, third quarter net income of $1.8 billion in earnings per share of $2.27. To get right into a more detailed look at our results, let's talk about how the strategies that Steve just discussed, have helped to drive our volumes back above pre -pandemic levels, as you can see on Slide 3. You've all noticed in the several views of volumes that begin on Slide 3 that we continue to show third quarter volume trends on both a year-over-year basis and relative to 2019 as we find, it's provides a clearer picture of the progress we're making in building growth momentum. We did see continued momentum and spending volumes in the third quarter with total network volumes and billed business volumes both up around 30% year-over-year and up 4% relative to 2019 on an FX adjusted basis. This growth in billed business is being driven by continued momentum in spending on goods and services, which you can see on Slide 4, represents 79% of our overall build business and was up 19% versus 2019 and strengthened sequentially versus Q2. We are very pleased with this continued strength in goods and services spending given the investments we've made in premium card member engagement, prospect acquisition, growing our coverage, and expanding relationships for the key partners. Focusing in first on our consumer business on Slide 5 overall spending was 9% above 2019 levels as growth in goods and…

Thank you, Jeff. Before we open the lines for Q&A, I will ask those in the queue to please limit yourself to just one question. Thank you for your cooperation. And with that, the Operator will now open up the line for questions. Brad.

[Operator Instructions] And our first question comes from the line of Ryan Nash with Goldman Sachs. Please, go ahead.

Hey, good morning, Steve. Good morning, Jeff.

Good morning, Ryan.

So as we look ahead to next year, Jeff, you said that you expect to be on the high end of your original 2020, which is what you had mentioned last quarter. If we look back to that time frame, you were expecting mid-to-high loss -- mid-to-high 2s losses provisions. We're going to be in the $3.5 to $4 billion range versus where I look now, losses are running sub-1 and you know that you don't expect them to move up that much for the next few quarters. So you maybe just one, Jeff, talk about some of the puts and takes that -- such that you wouldn't be above the high-end given how much leverage you have from credit. And then second, Steve, maybe you could expand on the comment that Jeff made to continue to invest to maximize the long-term growth that can help you sustain the financial algorithm that you laid out at the beginning of the call. Thanks.

Let me start Ryan by pointing out remarks. We've already -- this year because of the environment added over $2 of EPS to our earnings just from releasing credit reserves. As you think about my comments about 2022, we assume next year we'll have strong credit results, which you can recall from having a several billion dollar good guy on the provision side this year to having more of a normalized for the new world of lower credit losses provision expense next year. So we see that as a pretty impressive grow over to in fact be confident in getting to the high-end of where we originally thought we'd be in 2020 next year. Considering the magnitude of that grow over, considering that it's not reliant on a full recovery across all of our businesses, we actually see tailwinds that probably will help us in '22 and into 2023. And that's why as I turn it over to Steve, I think we are still emboldened by the progress we've seen bringing new people into the franchise, Ryan that we think we have an opportunity here to continue to invest significant resources to drive longer-term even higher levels of sustainable growth.

Look, I -- if you would have asked me at the beginning of the year, would we invest almost $5 billion in marketing this year? I would've said no, but we're not governed by what level we think we should or what anybody thinks we should hit. We're governed by the fact that there were tremendous opportunities out there. And when you look at what is going on with our acquisition activities right now, look we brought in 2.6 million cardholders and what we really focus on is what revenue those card holders really bring in. And what we're seeing is we're seeing a cardholder base that is spending more that we're bringing in, that has a better FICO profile, and it's skewing Millennial and it's skewing fee paying. And so as we run our models will be governed by -- can we continue to acquire these card members and we are. And the reality is, is that -- I've said this from Day 1, we're running this for the long -- the medium to long term. And the reality is, if we continue to find those great opportunities in the consumer base, in the SME base, in some opportunities beyond the card that we might have, we'll continue to invest. So as we look at it right now, our plan is to continue to be aggressive with our investments, constrained by our investment return models, not constrained by a certain level that people think we should or should not be at. And that's just the way we've been running the business for the last few years, and we'll continue to do that. And I think it's really served us well during the pandemic. I don't think you would've thought that this year we would've spent that kind of money. And -- but I think the key point is we're spending that money to grow the business profitably. We're not spending that money because we're in some battle to keep up with the Joneses here, okay?

And our next question comes from the line of Betsy Graseck with Morgan Stanley. Please go ahead.

Hi. Good morning.

Hi Betsy.

Hi, Betsy.

Couple of questions here. First, just following up on that -- on the marketing side, it seems like that is in line with what you've been spending historically as a percentage of revenues. So should we take your comments to mean that you had ramped that up from here or that there's a trajectory of marketing expense that's going to be similar to what you've had in the past as a percentage of revs?

Well, I think Betsy, what you should take is that we're not governed by thinking about, okay, we got to keep the percent of revenue, the marketing represents constant or similar to where it was in 2019. We're governed by the universe of really attractive opportunities we see to build longer-term growth momentum. So that's what has driven our marketing spend now including value injection to over $5 billion this year, much higher than Steve and I started the year thinking it would be. And as we think about 2022, we're very confident in the kind of EPS outcome that we've been talking about. But the ultimate amount of marketing that goes with that is going to be a function of the attractive opportunities. And because we're getting such great growth from the spending as Steve talked about, we're actually generating more revenue from the dollars that we're investing in marketing than we were pre -pandemic. The marketing starts to become a little self-funding while still hitting our EPS targets if the opportunities are there. So that's what's going to drive us in terms of how much marketing we do next year. And was there a second -- part 2, Betsy, if the Operator keeps you on.

My apologies. Our next question comes from the line Mihir Bathia with Bank of America. Please go ahead.

Hi, and good morning. Thank you for taking my questions. Not surprisingly, I also have a question on marketing and engagement spending. So in terms of -- Maybe just talking about it at a little bit of a higher level, right? In terms of competition, I understand that American Express is always been in a very competitive market for many years. Maybe talk about the dimensions of the competition. Have they changed post-competition? Are you seeing different players? And also, just in terms of your marketing and customer acquisition spending, how is it different today than it was maybe pre -pandemic like in 2019? Is there -- are you making investments in different things? Are customers are asking for different things?

Look, it's -- the only time I'd say competition ramp ed down was during the pandemic when nobody was really acquiring a lot of cards. But when we look at the range of competitors, you have to realize that we're looking at competitors on a global basis, country by country, we're looking at competitors across corporate card, small business, and consumer cards and I think as we talk to, quite honestly as we talk to you guys about competition where the drive tends to be is consumer competition in the U.S. and the reality is that this has been a competitive market since the financial crisis. I think the consumer card competition really heated up after the financial crisis when the big money center banks decided to really get serious about their consumer card business, and a lot have done a really good job. And we compete very vigorously with them. And so I don't really think it in my mind, I don't think it's changed all that much. I think it paused a little bit during the pandemic, but I don't think it has changed at all. The other thing that I would say is there are a range of other competitors out there. Fintechs and what have you and we continue to watch them, whether its competitors in the corporate card space, competitors in other places in other places. For buy now, pay later perspective, that's not really a big competitive threat to us. I mean, when you think about buy now, pay later, it tends to be targeted at low FICO, it tends to be targeted at a lot of debit card users, it's used as a customer acquisition vehicle. And that's just not the game that we're playing. We've had a buy now, pay later product…

And Steve, one of the best examples of that last evolution you talked about is the fact that our member get member program, where our existing card members who are so attached to the brand that they get other card members and friends to also get attached to the brand, that has come from almost nowhere a few years ago to being one of our most significant acquisition channels. And I think it's a real commentary on everything you just talked about.

And we do have those follow-up questions from Betsy Graseck with Morgan Stanley. Please go ahead.

Sorry about that, Betsy.

No problem. Thanks. Yeah. You mentioned during the prepared remarks that this was one of the best quarters for acquiring small business and I wanted to tie that into an article. Was that recently saying that you're going to be working with Goldman Sachs to enable B2B for your clients. This is really in the corporate card, the 200 -- the top 250 companies globally that you work with. And in this article it suggested that you would not be offering transaction account directly from yourself, but you're tying in with a partner to enable that. Maybe you could give us some color as to how this offering is expected to drive business opportunities, talk about the transaction account banking piece of that and then if you could tie into what you're seeing in SMB and what you could be offering to SMB clients too that would be helpful. Thanks.

Yeah. It's good to clarify this. So look, we're very excited about the partnership with Goldman and look, we have relationships with 60% of the Fortune 500 companies. And when we compete, as we compete, sometimes we compete with other money center banks that have corporate card programs and also have transaction banking and they tend to integrate that. And so Goldman is very interested in getting into transaction banking, not as necessarily as interested in getting into the corporate card. We do a number of things with Goldman Sachs from a customer perspective, there are customer of ours, we're customer this. And as John and David and I were talking about things, it looked like a really good opportunity. They were trying to ramp up their transaction banking. We have the corporate card and putting those things together in that space, a space that we really weren't going to get into transaction banking as it related to large banks. It's not our space. Corporate card is, but not transaction banking. So we decided to look at the top 250 and if that goes well and there's no reason why it will not go well, then we can put it -- put a little bit more downstream to say the S&P 500. We have a different perspective as it relates to the SME space, which is why, if you remember what we've talked about from an SMB perspective is we wanted to be the working capital providers for our small businesses. And now in the small business space, we have a very good footprint. and not only in the U.S., but good footprints in internationally. We also remember during the pandemic, we bought Kabbage. And what is Kabbage? Kabbage is basically a transaction banking platform, right? And so what Kabbage has? Kabbage does short-term loans. It does working capital loans, it will do merchant financing loans, it has a transaction banking account, It has debit card attached to it and we have our American Express Card attached to it. We have a very different philosophy as it relates to small businesses, where the commitment of capital, the commitment of cash that we have to put out, and the commitment from a loan perspective will be much smaller and be much more diffused across the entire SME base. And so we believe it's a sweet spot for us and that was the Kabbage piece of it. We did not believe that transaction banking was a sweet spot for us from an S&P 500 and above. And we're really thrilled to be partnering with Goldman on this.

Got it. Thanks.

And our next question comes from the line of Bob Napoli with William Blair. Please go ahead.

Hi. Thank you. Good morning. I guess, I wanted to follow up on Steve and Jeff on the SMB business and the competitive environment in that space, and your movements and adding additional products and services. There is a lot more competition, I guess from venture -backed companies like Brex and Divvy and Ramp, or you have Dibby now part of our partner Bill.com. But how do you see those companies are growing very fast and you're providing, I think spend management or that business spend management services. How do you view that competition relative to your SMB efforts and are there additional products and services and ecosystem you're building for your SMB clients.

Well, look, I mean, from an SME perspective, had pretty good quarter up 13%. So we feel pretty good about that. And I think I'll just point you back to what I just respond to Betsy with. Obviously, we went out and bought Kabbage. And Kabbage has cash flow analysis on it, it has transaction banking, it has debit, it has the ability to loans. And so, now what you do is you take a Fintech platform like Kabbage, you take American Express with over 3 million small business customers, and a sizeable Balance Sheet, and a sizable brand, and a lot of capabilities. You put that together and we believe it gives us a really great offering as it relates to our SMB base. And look, and I'm not going to discount any of those Ramp or Rex or Debbie or any -- we never discount anybody. And you look to learn from people as well, but we believe that the combination of what we have and the space that we're in, and putting together Kabbage and in also integrating into Kabbage, AECOM pay and our AP capabilities -- our automation capability -- AP automation capabilities puts us in a very, very good position to continue to compete in this space and continue to grow and continue to win.

And our next question comes from the line of Eran [Indiscernible] with Citi. Please go ahead.

Thanks. Maybe we could touch on capital distribution a little bit. The buybacks for the quarter were well above -- I think more than double what the street was expecting. Is that level just more of a catch-up or do you expect to have an elevated level of capital return for the next couple of quarters.

Well you are correct, [Indiscernible] quite elevated, probably our largest ever quarter of share. The purchase and into really strictly a catch up. [Indiscernible] This is our first quarter where we were completely free of any Fed constraints on our buyback. We've been very clear for many years that our target CET1 capital ratio was 10% to 11%. As you all know, that is actually well above the regulatory minimums. It's really more governed by our own view of the balance sheet and the rating agency view of the balance sheet. So since the constraints from the FRED were lifted, while we don't want to disrupt the market, we did buy more aggressively. I think you will continue to see us by above what I would call a steady-state level for -- Our steady-state level is pretty high. As a Company with a 30% ROE, we generate a lot more capital than we need each year. But it'll stay elevated until you get back down into that 10% to 11% range, which I'd expect to happen over the next couple of quarters.

And we do have a question from the line of Richard Shane with JPMorgan. Please go ahead.

Thanks guys for taking my questions this morning. Look, I think when we look back at what's happened over the last year, we really see the strength of the American Express franchise from the core business. And in a lot of ways, things have stayed the same. I'm curious when you look forward, what do you think is different about the business as we emerge from the COVID crisis? Is that the demographic of your customer, is it the expansion with Kabbage, what's going to be different in the next three years because of what we've seen in the last year?

Well, I think that if you look at what happened here, I think we've bedded down customers a lot more than we've ever bedded them down in the past. And that was because we really focused on a lot of this value proposition enhancement. And one of the reasons that I started my remarks today with pre -pandemic, at the pandemic, and during the pandemic was to show that this was a bit of a continuum. When you think about this, what we talked about a number of years ago was really focusing in on our customers, focusing in on refreshing our products and services, becoming more digitally engaged, and expanding that organic core of products and services. And what I think what we saw during the pandemic here was that we saw an accelerant as it related to online. Our online spending has accelerated tremendously, I think were 27% up in Q3 here, goods and services, 19% growth over 19. And so we've been able to direct our card members in ways faster than we probably would have gotten there without the pandemic. And again, I think looking at our overall strategy of refreshing these card products has led us to expanding our overall base. As we expand the value propositions, look, we're talking about over 70% Millennial and Gen-Z acquisition in a Platinum Card where we just raised the fee to $695. So it's obviously speaking to that base. And I think that's one of the things we've seen over this time period. It's how much more we are speaking to that customer segment. And so when you put that all together and you add the SME piece of it, which is a complete expansion with Kabbage is that we're opening up a lot more doors for us to do business with our SME customers. And one of the things we've learned is that the more products that you have with your customer, the higher retention rates that you have, obviously, the more revenue that you have, and the more engagement that you have. And so, I think we've probably driven faster to where we thought we were going to get ultimately, as a result of the pandemic, but we haven't fundamentally changed where we were going. And that's why I wanted to start this conversation this morning with this as a continuum for us. But again, like we've talked about in the environment, online has been accelerated probably 3 years from a macroeconomic perspective, and I think we're seeing our strategy that we were looking to continually to implement that has been accelerated, and it's proven to be right.

For one financial, [Indiscernible] Rick and Steve, I'd add to that is very similar, is that our funding structure has actually changed quite significantly over the course of the pandemic to be more heavily weighted to our depository products, which are our lowest cost of funding. And when I project the head for years, that trend is going to continue. So that is actually, I think perhaps a little notice, but very positive change for us as well when you look a little longer-term.

Yeah. One of the point that I'll just make and not to beat on this, but when you look at the fact that we -- when you look at our acquisition and you see where we are acquiring these card members, it has actually expanded our playing field. And so with that playing field expanded, that's why you're seeing this broader marketing spend because you have more customers to go after. You have more archetypes now that you can go after than you did probably 3 or 4 years ago because the product is speaking to a broader set of consumers out there now. Broader in terms of the demographic and broader in terms of age and so forth, and wants and needs that the products are getting -- all getting broader. And a product can now appeal to multiple customer sets. And you're seeing differentiation between the products. It's just not an upgrade. When you look at the Gold versus the Platinum, there is specific differences here that speak to another different consumer or different small business customer. So I think that has probably changed as well.

And we do have a question from the line of Dominick Gabriele with Oppenheimer, please go ahead.

Great. Thank you so much for taking my questions. I was just curious on the 3 million SME customers. As you look at the total U.S. SME spend, does that volume growth typically track the total market given how penetrated you are there with your relationships? And I guess, would that include any cash conversion or I know it represents inventories, is most of that done on card any way? Thanks.

Look, I don't have sort of market share information on that, but -- sort of at the tip of my fingers here. But it is -- we think from a 13% growth perspective, we are probably growing at or above market at this particular point in time. But when we look at this, what is down from an SME perspective is T&E. You are seeing a conversion of check or cash or wire to card and I think we saw that during the pandemic and I think that's where some of the investment in our AP automation has helped as well. And when you talk about B2B spending approximately 80% of SME spending is B2B spending. Maybe 85% of SME spending is B2B spending and they use it for lots of different things. They -- there are some inventory management. But remember, our SME base is so broad and it's professional services, lawyers, HVAC, so forth and so on. And so they do use the product or goods for resale as well. It's -- auto glass companies use it to buy auto glass and plumbers use it buy supplies and so forth so on. And you're probably seeing a little bit more cash conversion, but we're pretty pleased with that 13% number of growth plus with the T&E component of that being down.

And we do have a question from the line of Lisa Ellis with MoffettNathanson. Please go ahead.

Hey, good morning. Thanks for squeezing me in. I have another follow-up question on the growth that you're seeing in the Millennial and GenZ that you called out on Slide 5. Can you just take a step back and comment a bit on what features and reward specifically or like which card profiles that you're seeing are particularly attracting -- attract those consumers like have you, how have you been that -- this successful over the last couple of years and then also, can you give us any sense of the percentage of your U.S. card-based or some measure along those lines that's currently in those younger cohort?

Last part, we don't really, we haven't -- I don't know if we've disclosed the last point, but let me go with the first point while they feverously look for that answer, Lisa, as sitting around the table with me. As far as the first part, look, Millennials and Gen-Zs are about experiences. And they are about access. And I can speak for experience having a house full of them. And so, they love to travel; they love to do things. And when you look at the Platinum Card product, which had always been positioned as, hey, I'm a real high spender, I need to have that Platinum Card product, you have to look at the utility of this product. And you look at fine Hotels and Resorts and you look at the value that you get out of a fine hotel and resort booking with an early check-in and a late checkout, or a free breakfast and a $100 credit at the hotel. And then you look at streaming credits, their online shoppers, this rewards accelerators, this travel credits, this access to tickets, this access to special part member events, it is a range of services that they use. And look, Equinox is another benefit that we put on and, look, we just added Walmart, Walmart Plus membership, which a majority of our Platinum Card holders shop at Walmart. We think this is a great benefit as well. So when they look at this product, it really is a lifestyle product for them. One that ranges from their everyday activities of online spending and streaming all the way to traveling. And the credits they get, whether it's Global Entry and TSA Pre and all those kinds of things. So it is a wide ranging value-rich product for these younger people and older people like myself. But basically out of this particular cohort, it's 27% of our overall spending and in the third quarter that grew 38%. We feel pretty good about that as we move in. So that's the -- I think that gives you the answer to your second question.

And we do have a question from the line of Min Zhao with Deutsche Bank. Please go ahead.

Hi. Thanks for taking my question. I want to ask about potential M&A. Are there any areas in your product set that might benefit from possible bolt-on acquisitions? And then has there been more opportunities to engage in the syntax space or if high evaluations continue to be a headwind to any activity there? Thank you.

Well, I mean, look, let's take a low historical walk down memory lane. But we have -- we bought Resy which was a great bolt-on acquisition for us with dining and it becomes a great system for new card members because we don't just limit Resy to our cardholders. And then we added Lounge Body, which is the lounge finder, which provides our card members not only with access to our Centurion lounges, but other relationships that we have, over 1200 lounges, and it'll also give them perspective on if our lounges are full enough. Then we bought Resy and we bought Cake and a few others and then obviously, Kabbage. So look, we're constantly looking an AECOM pay we bought as well. So we're constantly looking for those bolt-on acquisitions, things that will continue to drive our overall organic core and make our overall products that better. Some of the things are -- Obviously, the prices for Fintech are obviously some of these things are very highly valued, and obviously the math doesn't work, but the way we've looked at it is if something makes strategic sense overall, then we'll look at doing it. But I think the big thing for us is we have a feeder system with Amex Ventures, where we have probably investments in 40 plus 50 different entities right now. And it gives us an opportunity to test drive them. It gives us an opportunity to learn and through some of these investments, it led to us acquiring companies down the road. So look, you never say never about anything and that's probably as far as I'm going to go, but we're always interested in things that are going to be accretive to the Company overall.

And we do have a question from the line of Mark DeVries with Barclays. Please go ahead.

Thanks. Steve, I wanted to ask you about how you're thinking about crypto. As you attract more of these millennials and Gen Zs or digitally native, how important is it to think about offering either the ability to pay or integrating it into your rewards prop? And then also on a related matter, how are you thinking about whether there is a role to play developing kind of a supplemental settlement layer to address interoperability issues. And then finally, when should we expect you to buy CryptoPunk?

So look, we think about a broad range of digital currencies from crypto to stable coins to government-backed digital currencies. And look, there's -- we think about cryptocurrency much more as an asset class at this particular point in time. We don't use our card to sort of buy stock. People don't use our card to buy stock and I don't think people are going to use our card anytime soon to buy to buy crypto. So I don't I see that as a big role. Having said that within closed ecosystems of NFTs and stable coins and things like that, you see it. We're on MBA Topshop. You can use the card there and there's a few other places where you can use the card and we'll see how that all plays out. I think there are opportunities down the road, potentially membership rewards and things like that as redemption options. But I don't see at this point and I don't foresee it at any point where crypto currency is going to be a threat to traditional credit card payments and there's a lot of reasons for that. There's -- Obviously, there's rewards. There's service. There is the ability to dispute, and there's also the ability to extend credit. So there's always a role. I think as I get asked this question, is it going to displace traditional credit cards? And I think the answer to that is no. I think there is a role though for digital currencies. I think it can make cross-border payments a lot more seamless and a lot easier to conduct. And so, we'll see how government digital currencies and other stable coins play out.

And we do have a question from the line of Sanjay Sakhrani with KBW, please go ahead.

Thanks. When we look at the year-over-year improvement in goods and services, I guess, is there a way to parse apart how much of that is your same customer growth versus new customer growth versus inflation? I'm just trying to think about how that cycle through when travel and entertainment comes back. I have one follow-up after that. Thanks.

Well, we don't think it's a hell of a lot of inflation at this particular point in time. As far as new customer, there were a lot of new customers we acquired last year. And so same customer sales are driving quite a bit but we don't -- I don't have that at my fingertips at this point. But I think what I would say is that when we see -- what we've seen from a value proposition injection perspective last year, we saw a lot of that stuff stick. So we saw more card members putting wireless on. We saw more card members putting streaming services on. And that has continued to flow through. We've seen more of our card members putting online spending on. So I think that -- our belief is that's going to stick and when you look at goods and services growth, it's 19% over 2019, it's 18% over 2020. So it has been that. It has been consistent. So that -- I think that's here to stay, and I think what will happen is we'll get that travel. The other thing I would say is, we talked about the millennial cohort before and that being up 38%. Our boomers are not back. And so the majority of our traditional card base is not back yet and that is not growing at 38%. But in reality is, they will come back. And they will come back as they feel more safe. And so we think that's a tailwind for us going forward.

Right. That's very helpful. And then I guess, Jeff, is there a way to be more specific on the provision next year? I know it's going to be dependent on loan growth and the macro. But as you're thinking about what's embedded in your expectations for the high-end of the range. I mean, is it close to several billions of dollars and maybe you could just talk through that please?

Well, I think Sanjay, the way to think about it is many financial institutions were still holding an appropriately but significant level of reserves driven by the uncertainty in the medical and economic environment. At some point that level of uncertainty is going to decrease down to 0. And at some point, those reserves being held for that have to also go pushing much down to 0. Now -- so that's got to happen probably mostly over the course of next year. On the other hand, as loan growth begins to pick back up, which it has in the last quarter, as delinquency start to drift up, I don't think they're going to spike up, but they'll drift up a little bit then the actual or what I'm going to call BAU fewer provision is going to start to drift out. What's really hard to predict those on days the relative pace of those two things next year. What I feel very confident, though, in pointing out as I did a few minutes ago is that relative to this year where you've had billions of dollars that have led you to a net benefit on the provision line, I certainly don't expect that next year, which is why we feel pretty good about the confidence and the range we've given, given that it actually represents several -- just billions of dollars of improved business performance from a pre -provision perspective. But those are the dynamics that we think about.

Alright. Thank you.

And our final question comes from the line of Don Fandetti with Wells Fargo. Please go ahead.

Good morning. So I'll close it out with a question on regulation, Jeff. A lot of things have been going well for the Company. I just want to check in, specifically on the U.S. side and just see if you're feeling comfortable as you can with the environment.

Hi. Don, I'll answer it. I think, whereas comfortable as we could be at this particular point in time for everything that we know, but you're always worried about everything. Regulation is one of those things but I think right now, I think we're okay. And we think about regulation, we specifically think about things that have happened in Europe and things that happened in Australia and so forth that we really don't see that happening in the U.S. We'll see what happens as it relates to the CFPB s and how that all plays out. But I think we've lived in this environment along time. We know how to operate in this environment, and I think we'll just be fine. But I don't see any sort of curve balls, if you will, coming down the pike at this point. So that's what I have to say about it.

With that, we will bring the call to an end. Thank you again for joining today's call and for your continued interest in American Express. The IR team will be available for any follow-up questions. Brad, back to you.

And ladies and gentlemen, the webcast replay will be available on our Investor Relations website at ir. americanexpress.com shortly after the call. You can also access the digital replay of the call at 1-866-207-1041or 402-970-0847, 402-970-0847, access code 873-2937 after 1 PM Eastern on October 22nd through midnight, October 29th. That will conclude our conference call for today. Thank you for your participation. You may now disconnect.