American Express Co. spent much of its third-quarter earnings call reassuring investors about its liquidity and access to the federal government's assistance programs, but it stopped short of embracing one way of shoring up access to cheap funds: buying a retail bank.

Executives said during the conference call Monday evening that they intended to increase deposits, which currently account for about 12% of its funding.

Daniel Henry, Amex's chief financial officer, said it has raised $400 million through three- to five-year retail notes since August. In recent weeks it has also issued $200 million of certificates of deposit with maturities ranging from three months to two years, he said.

Analysts asked whether it would acquire a retail bank, especially in the current buyer's market for such assets. Kenneth Chenault, Amex's chairman and chief executive, said even though such a deal would have advantages, he was not looking for one.

"As we look at becoming, if you will, a retail bank, we think there are other things that go with that, that concern us," Mr. Chenault said in response to one analyst question.

Later, in response to another analyst's question, he said: "If an acquisition will accelerate our progress and improve our business model, we are open to it, but I think the important thing about the focus on retail deposits is it also comes with a lot of other stuff."

Mr. Chenault did not offer a definition of "stuff," and Amex said executives were unavailable for interviews Tuesday.

Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co. Inc., said in an interview Tuesday that he interpreted the comment to mean that "most banks come with too much baggage" in terms of asset quality and balance sheets. If Amex did buy a retail bank, it would "acquire a portfolio" where "one probably wouldn't have intimate knowledge of the quality."

Mr. Henry said during the call: "Over recent months there has been a lot of discussion about the effectiveness of a wholesale funding model versus the bank deposit model. And while we see the merits of building a deposit capability, the reality is most people who have substantial deposits are also large capital markets borrowers" anyway.

Amex may apply for the Treasury Department's equity investment program, he said. A "clarification" the Treasury issued Monday "suggests that we may be eligible" for the program. "We will be reviewing the program's details and definitions."

The New York card company owns an industrial loan company, American Express Centurion Bank, and a thrift, American Express Bank, so it would appear to be eligible for the government's investment program even without the clarification.

Kathleen Shanley, an analyst at the New York research firm Gimme Credit LLC, wrote in a note published Tuesday that Amex is "managing liquidity prudently" by taking a hiatus from stock buybacks. "Longer-term, Amex may need to consider a merger if stability doesn't return to the markets."

Mr. Chenault said Amex "can absolutely stay liquid" and has "contingency programs in place that would allow us to navigate through this environment for at least 12 months, even under extreme market conditions."

Those programs include a $5 billion portfolio of liquid investments, a $5 billion asset-backed conduit facility, and access to the government's commercial paper funding facility. Those three things would allow Amex to meet its obligations in the next six months, the company said.

Over the next year, Mr. Henry said, Amex could be eligible for further government assistance.

"For 12 months in total we would have a funding requirement of $24 billion. In that case, again, we would use our liquidity portfolio, the conduit facility. We would use the commercial paper funding facility, which runs through April," he said. "After that, we would rely on" the Federal Deposit Insurance Corp.'s "temporary liquidity guarantee program, where we can access, we estimate, $8.8 billion." That program, combined with the Federal Reserve Board's term auction facility and discount window, "would enable us to meet our $24 billion of funding needs."

Registration for the FDIC program will begin Oct. 27, Mr. Henry said in response to an analyst question. "There's still a lot of learnings to be had on exactly how the program will work," but "of our unsecured debt, between September 30th of '08 through June 30th of '09, we estimate that $8.8 billion will mature and qualify for this program."

Mr. Valentin reduced his 12-month price target for Amex's stock by $6, to $22, and he reiterated his concerns about the company's liquidity in a note to clients Tuesday. "Given the outstanding debt and commercial paper maturity schedule over the next year, and barring significant improvement in capital markets' conditions," he wrote, the stability of Amex's liquidity "is largely dependent on government liquidity programs or bank lines of credit."

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