U.S. Bank Books $190M in Reserves on the $1.7B Amazon Small-Business Card Book It Took From Amex
On its October 15 earnings call, U.S. Bancorp put a size on the small-business card book it bought when Amazon moved its business cards from American Express to U.S. Bank and Mastercard: CFO John Stern said it added about $900 million to third-quarter average loans and $1.7 billion to quarter-end loans.1 2 In March, U.S. Bank had declined to tell American Banker how large the portfolio was or what it paid, and the price is still undisclosed.2
Bottom line for funders (our read): a national bank is spending to win small-business credit, and the card is its entry point. Some of your best merchants likely carry bank card debt that a bank statement shows only as payments, and more may see bank offers at renewal. Find that debt before you size an advance.
The earnings release shows what the bank booked against the purchase: an initial provision for credit losses of $135 million and a separate initial allowance for acquired credit losses of $55 million.3
Timing: the Amazon accounts converted on August 14, so the quarter holds about seven weeks of the book.5
The limits, in one place. The reserve ratio is our calculation and mixes a purchase-date reserve with a quarter-end balance; it is no benchmark for MCA default rates. The bank reports delinquency only for its whole card book. No data shows how many Amazon cardholders also take advances.
What Alternative Business Lenders Need to Know
What did U.S. Bank actually take over?
Amazon announced on March 31 that U.S. Bank would issue its Prime Business Card and Amazon Business Card on the Mastercard network, replacing American Express.6 2 The Prime card pays 5% back on Amazon purchases, the non-Prime card pays 3%, and neither has an annual fee.6 The bank's filing calls the deal the purchase of a small business credit card portfolio: existing balances moved onto U.S. Bank's balance sheet, and U.S. Bank issues new cards under the program.3
U.S. Bank's transition page says unpaid balances moved over and credit lines did not change.5
Why does a card portfolio matter to an MCA or revenue-based funder?
Because the card is the default small-business credit product and the advance is not. In the Fed's 2025 Small Business Credit Survey, fielded from September to November 2025 with 6,525 responses, 62% of employer firms regularly used credit cards and 7% used merchant cash advances; 29% had sought a credit card in the prior 12 months and 8% had sought an MCA.7 8
Amazon's cardholders are business buyers, not a list of MCA merchants. The bank's wider push is what reaches your files: Chairman and CEO Gunjan Kedia said the bank onboarded a strategic small business credit card relationship, launched Business Essentials and set up new banker teams in expansion markets.3 The same release introduced two small-business cards paying 2% cash back, with welcome offers of $500 or $1,000.3
What do the reserves and the delinquency numbers say?
A card reserve covers expected losses over the life of the balances, so it runs well above the bank's annualized card net charge-off rate of 3.29% in the quarter.4
Card loans 30 to 89 days past due rose to 1.35% from 1.17% in the second quarter, level with 1.36% a year earlier, and 90-day delinquencies eased to 1.10% from 1.13%; the bank attributes the rise to onboarding the acquisition and to seasonality.4
How do you find card debt the applicant does not disclose?
Pull credit; do not rely on the merchant to volunteer it. Business credit cards were the most common business product on owners' consumer credit reports in CFPB research covering 2012 to 2019, at about 2.3 million consumers in an average quarter.9 The same 2012 to 2019 research found that at least 89% of banks did not furnish any business products to consumer bureaus, and that some lenders reported only once an account was seriously delinquent; practices may have changed since.9
So, with the owner's written authorization, read both the owner's consumer report and a commercial report. Look for business card tradelines, recently opened accounts and utilization near the limit. A clean report is not proof that the card is absent; it may mean the issuer does not report there.
What should funders do now?
Count carried card balances as debt service. A card line appears on a bank statement only as a payment to the issuer. A merchant who pays the statement in full each month is not servicing debt; one whose payments look like minimums, or who carries a balance month to month, is. Add those payments to existing funder debits before you set the holdback.
Pull both reports on every renewal. With the owner's written authorization, compare business card tradelines and utilization on the owner's consumer report and on a commercial report with what the merchant disclosed; a new card since the last advance is a question to ask before you fund.
Ask about installment features. U.S. Bank's ExtendPay lets cardholders move eligible purchases of $100 or more into equal monthly payments over 3 to 24 months for a fixed monthly fee.10 That is a fixed obligation inside the card balance.
Match the card to the business. Before you count a card payment as the applicant's debt, confirm the business named on the card statement is the same registered entity as the one on the bank account and the application. A card held by an affiliate or the owner personally changes who owes it.
Price your best renewals first. Log every merchant that cites a bank card or line at renewal, and make your strongest repeat merchants an offer before the bank does.
Our Opinion
Our call: over the next 12 months, U.S. Bank will compete harder for the A and B merchants in small-ticket working capital. The bank says it recently added 50 new business bankers in attractive markets, it launched 2% small-business cards with $500 to $1,000 welcome offers, and it bought a ready-made card book through Amazon.4 3
That leaves funders two jobs: win on speed and on the merchants banks will not touch, and stop assuming your best renewals are captive. If the playbook works, expect other large banks to copy it.
We will be wrong if, across its next four quarterly reports, U.S. Bancorp discloses no further small-business banker additions or new small-business card products, and your own renewal files show no bank card offers. The first checkpoint is its fourth-quarter release.4
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The Equipment Leasing and Finance Foundation's October confidence index fell to 60.4 from 62.4. The share of executives expecting capex demand to rise over the next four months fell to 18.2% from 31.8%, and the share expecting easier access to capital fell to 19.0% from 27.3%; none expect demand or access to decline.11 Wintrust Specialty Finance's David Normandin said Q4 looks on track to finish strong, while Elevex Capital's Jeffry Elliott said he expects delinquency and charge-offs to increase in most markets.11 12 The index is sentiment; ELFA's separate CapEx Finance Index reports volume.13
Our read: a flat outlook, not a contraction. Equipment lenders should price renewals against flat funding conditions, not easing ones.
nCino and Parlay announced on October 8 that nCino will resell and support Parlay's Loan Intelligence System, which handles SBA intake, eligibility screening and initial structuring before a banker reviews the file; the release frames its market as America's 1,400 SBA lenders.14 Parlay says it processed more than $500 million of SBA loan inquiries in 2026 and that customers report up to 80% less manual work; both are company figures, and inquiries are not approvals.14 The tool arrives as SBA's SOP 50 10 8.1, effective October 1, tightens acquisition-loan rules.15
Our read: if bank SBA decisions come faster, the window for bridge capital may shrink. Ask applicants where their SBA file stands.
Fifth Third's earnings presentation puts its exposure to nondepository financial institutions at $14.3 billion, 8% of loans, with 87% investment grade or equivalent and a criticized rate of 44 basis points; categories include consumer warehouse and private capital warehouse lines.16 CEO Tim Spence said some risk has migrated out of the banking system and come back in through back leverage, with enhancements that did not exist before.17 Industrywide, the FDIC counts $1.4 trillion of bank loans to nonbanks at the end of 2025, after 22.7% compound annual growth since 2010.18
Our read: Spence did not list the enhancements. If you renew a bank line this year, ask which terms changed; eligibility criteria, concentration limits and reporting are where we would look first.
Sources
1 Motley Fool transcript via AOL | U.S. Bancorp Q3 2026 earnings call (Oct. 15, 2026)
2 American Banker | U.S. Bank, Mastercard take Amazon's small-business cards from Amex (Mar. 31, 2026)
3 U.S. Bancorp | Third quarter 2026 earnings release, Form 8-K Exhibit 99.1 (Oct. 15, 2026)
4 U.S. Bancorp | Third quarter 2026 earnings presentation, Form 8-K (Oct. 15, 2026)
5 U.S. Bank | Amazon Business cards transition FAQ
6 U.S. Bancorp | Small Businesses Can Soon Enjoy New Rewards With the Prime Business and Amazon Business Credit Cards (Mar. 31, 2026)
7 Federal Reserve Banks | 2026 Report on Employer Firms (Mar. 3, 2026)
8 Federal Reserve Banks | Small Business Credit Survey 2025, employer firms data appendix (xlsx)
9 CFPB | Trends and impacts of commercial credit reporting on consumer credit (June 30, 2021)
10 U.S. Bank | ExtendPay: buy now, pay later on your credit card
11 ELFA | Equipment Finance Industry Confidence Eases in October (Oct. 15, 2026)
12 Monitor | ELFA: Equipment Finance Industry Confidence Eases in October (Oct. 15, 2026)
13 ELFA | CapEx Finance Index
14 nCino and Parlay via Business Wire | nCino Partners with Parlay to Power AI-Native SBA Lending Nationwide (Oct. 8, 2026)
15 Grow America | What SBA's new SOP means for 7(a) lending (Oct. 1, 2026)
16 Fifth Third Bancorp | Third quarter 2026 earnings presentation, Form 8-K (Oct. 19, 2026)
17 Motley Fool transcript | Fifth Third Bancorp Q3 2026 earnings call (Oct. 19, 2026)
18 FDIC | 2026 Risk Review, section 4.2: Nondepository Financial Institution Lending
