Virgin Islands Credit Unions

Member engagement offered a rare bright spot for VI Credit Unions in Q1 2026. Member growth of 1.33% accelerated 0.68 pp from 0.65% in Q1 2025 on a year-over-year basis, and sits 1.97 pp above the national rate of -0.65%, which is itself in contraction. However, on a quarter-over-quarter basis, the growth rate decelerated by 2.14 pp from 3.47% in Q4 2025, signaling the pace of new member acquisition is cooling. The cohort continues to outperform national membership trends, but sustaining that advantage will require maintaining service quality amid financial stress.

Profitability deteriorated sharply in Q1 2026. ROA fell to -0.47%, a decrease of 1.11 pp from 0.64% in Q4 2025 and a decrease of 1.01 pp from 0.55% in Q1 2025 — now 1.14 pp below the national benchmark of 0.67%. NIM remained relatively stable QoQ at 4.54%, down just 2 basis points from 4.56% in Q4 2025, but improved 0.17 pp year-over-year from 4.37% in Q1 2025, and stands 84 basis points above the national 3.70%. The wide NIM advantage is not enough to offset the earnings drag likely driven by rising credit costs and expense pressures.

Growth dynamics for VI Credit Unions diverged sharply in Q1 2026. Asset growth decelerated to -0.49% from 3.65% in Q4 2025 (a 4.14 pp decline QoQ) and from 5.13% in Q1 2025 (a 5.62 pp decline YoY), now 3.13 pp below the national 2.64%. Deposit growth decelerated to -1.16% from 2.90% in Q4 2025, landing 3.32 pp below the national 2.16%. Loan growth, however, decelerated only modestly to 5.54% from 6.33% in Q4 2025, remaining 5.23 pp above the national 0.31% — a standout but one that warrants scrutiny given rising delinquency.

The risk profile for VI Credit Unions worsened materially in Q1 2026. Delinquency increased to 1.85%, up 0.32 pp from 1.53% in Q4 2025 and up 0.77 pp from 1.08% in Q1 2025, now 1.08 pp above the national benchmark of 0.78%. The trajectory across both timeframes is consistently adverse. Net worth decreased slightly to 15.23% from 15.43% in Q4 2025 (down 0.21 pp QoQ), though it increased 0.28 pp from 14.94% in Q1 2025 (YoY), and remains 1.61 pp above the national 13.61%. Capital buffers are solid, but accelerating delinquency paired with negative ROA is an unsustainable combination.

VI Credit Unions maintain a distinctly non-traditional portfolio composition relative to national peers. First mortgage concentration stands at just 0.11% in Q1 2026 — stable YoY (down 0.01 pp from 0.13% in Q1 2025) but up 0.05 pp QoQ from 0.06% in Q4 2025 — compared to the national 22.15%. Indirect auto exposure remains at 0.00%, versus the national 7.73%. Certificate concentration edged up 0.07 pp YoY to 4.87% from 4.80% in Q1 2025, but decreased 0.14 pp QoQ from 5.00% in Q4 2025, versus a national rate of 19.80%. The cohort's funding and lending mix is fundamentally different from mainland peers.