Farmer Mac (AGM) 2026年第三季度财报电话会：创纪录业务量与基础设施增长

核心要点

• Farmer Mac在2026年第三季度末的未偿业务规模达到创纪录的385亿美元，环比增长13亿美元，并表示仍有望在2026年达到400亿美元。
• 当季营收为1.227亿美元，而核心收益达到5260万美元，即摊薄后每股4.82美元。
• 净有效利差同比增长16%至1.139亿美元。利差率为116个基点，而去年同期为120个基点，2026年第二季度调整后为118个基点。
• 基础设施金融业务推动了增长，环比增加9.2亿美元至逾140亿美元。可再生能源业务创下季度净增长历史纪录，达5.86亿美元。
• 信贷指标小幅走弱。信用损失准备为1110万美元，90天逾期率升至54个基点，次级资产升至2.1%（占资产组合）。
• 管理层维持了对年均业务规模增长约8%至11%（直至2030年）的预期，并表示2027年的增速可能达到该区间的上限。

关键财务数据

业务与经营业绩

基础设施融资是当季业务扩张的最大贡献项。未偿业务规模增加了9.2亿美元至逾140亿美元，其中电力与公用事业、可再生能源和宽带基础设施领域均实现增长。

可再生能源板块贡献了逾10亿美元的贷款购买总额与未出资承诺额。扣除到期和偿还金额后，净增长达到创纪录的5.86亿美元，较此前的季度纪录高出逾1.4亿美元。管理层表示，其可再生能源项目储备已接近10亿美元。

电力与公用事业板块录得1.65亿美元的净业务量增长，主要得益于2.08亿美元的净贷款购买量。Farmer Mac指出，电网现代化改造、电气化需求以及贷款机构的资产负债表管理是主要驱动因素。

宽带基础设施业务增加了1.69亿美元，季度末达到略高于20亿美元的业务规模。Farmer Mac继续为数据中心、光纤、宽带和铁塔项目提供融资，同时在地域、发起人、租户和细分子领域之间分散风险敞口。

在农业金融方面，农场与牧场贷款购买量净增2.28亿美元，尽管7月1日还款日前后存在季节性还款。公司在当季批准了近7亿美元的贷款，创下历年第三季度审批额最高纪录。Farmer Mac贷款交易平台（FLEX）迎来首个完整季度，助力精简了贷款提交流程。

企业农业金融业务规模小幅增至21.4亿美元。管理层表示，受大型农业综合企业交易以及金融机构重新评估集中度和资本回报率水平的推动，步入2026年第四季度交易活动有所回升。

综合所有业务板块，Farmer Mac共实现了105亿美元的业务总规模（2026年前九个月），超过了公司历史上以往任何一年的全年总量。

管理层指引

管理层表示，Farmer Mac 有望在2026年实现400亿美元的业务规模，较其2026年投资者日提出的时间表提前了两年。

公司继续预计年均业务规模增速到2030年约为8%至11%。管理层表示，广泛的需求以及与电气化相关的机遇，支撑了其对2027年增速可能接近该区间上限的预期。

净有效利差方面，管理层重申的目标区间约为115至120个基点。管理层提醒称，由于季节性非应计贷款活动以及低利润率AgVantage交易占比的影响，第三季度116个基点的表现未必应被视为稳定的常态水平。公司更广泛的重心仍是实现两位数的营收增长。

全年薪酬费用预计将处于此前指引的同比增幅20%至22%区间的低端。Farmer Mac 还维持了其全年度效率比率预期区间：27%至29%。

风险与关注领域

贷款信用损失准备金为4830万美元，环比增加120万美元，同比增加1300万美元。该季度计入了一笔820万美元的核销，该核销与一家电信借款人有关，该借款人在光纤网络建设受挫且面临流动性压力后申请了破产。

90天逾期率环比上升17个基点至54个基点，但仍比上年同期水平低3个基点。管理层将该季度的环比增长主要归因于农场和牧场的正常季节性因素。

次级资产从1.7%升至2.1%（占投资组合比重），主要是由于农场和牧场贷款的信用迁徙所致。资产压力主要集中在西北部和西南部的部分地区，包括苹果、葡萄、葡萄园以及受干旱影响的区域。管理层表示，受影响贷款的平均贷款价值比约为50%，从而限制了其对当前损失的预期。

Farmer Mac 还强调了涉及利率、贸易与政府政策、监管变革、地缘政治局势、供应链以及2027年后可再生能源税收抵免逐步退出带来的不确定性。

分析师问答环节要点

• 风险转移策略： Farmer Mac 正在推进多项风险转移举措，包括最早可能于2026年第四季度进行的信用挂钩票据交易。管理层预计这些工具将成为其资本与信用风险框架中的常态化组成部分。公司正在与农贷管理局就监管资本认定方式进行沟通。
• 数据中心风险敞口： 投资组合中的所有数据中心项目均处于在建状态，其中约四分之三进展顺利或接近完工。Farmer Mac 在承销交易前，要求确保电力供应到位、审批许可齐全、开发商和发起人具备合格资质，并拥有投资级超大规模云厂商租户。管理层表示，目前未出现令人担忧的重大项目延误。
• 经营杠杆： 第三季度基础设施交易规模扩大，导致法律及交易费用增加。此外，第二季度曾受益于追回约50万美元的诉讼费用，这也影响了环比基数对比。管理层仍专注于释放经营杠杆效应。
• 农场与牧场季节性因素： 管理层将环比业务活动放缓主要归因于第三季度的正常季节性规律以及7月1日的集中还款。第三季度创纪录的审批量和更为充裕的申请储备，支撑了对第四季度强劲表现的预期。
• 电信信贷复盘： 管理层表示最初的承销是审慎稳健的，但也发现在大型光纤建设项目中，有必要加强对管理团队能力、成本超支、劳动力供给以及流动性灵活度的监督。

业绩电话会完整纪要

完整财报电话会议逐字稿

管理层陈述

Operator

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Farmer Mac Third Quarter 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to Eric Esty, Director of Capital Markets. Please go ahead.

Unknown Speaker

Good afternoon, and thank you for joining us for our third quarter 2026 earnings conference call. I'm Eric Esty, Director of Capital Markets here at Farmer Mac. As we begin, please note that the information provided during this call may contain forward-looking statements about the company's business, strategies, and performance and prospects. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected.

All forward-looking statements are based on information available to Farmer Mac as of today's date, and Farmer Mac assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Please refer to Farmer Mac's 2025 annual report on Form 10-K and subsequent SEC filings for a full discussion of the company's risk factors. On today's call, we will also be discussing certain non-GAAP financial measures.

Disclosures and reconciliations of these non-GAAP measures can be found in the company's most recent press release posted on Farmer Mac's website. Joining me today are our President and Chief Executive Officer, Zach Carpenter, and our Executive Vice President and Chief Financial Officer, Matt Pullins. At this time, I'll turn the call over to our Chief Executive Officer, Zach Carpenter. Zach?

Zachary Carpenter

Thank you, Eric, and good afternoon, everyone. Thank you for joining us today. I'm pleased to report that Farmer Mac delivered another extremely strong quarter. Total business volume achieved another record, reaching $38.5 billion as of the end of the third quarter of 2026. In addition, our third quarter financial results were record performance for the first nine months of 2026 with $357.9 million in revenues and $163.1 million in core earnings, which is an increase of 18.3% and 14.1% respectively from the same period of 2025.

These record results were powered by broad-based business volume growth and reflect the strength of our mission-driven franchise, diversified business segments, and the disciplined execution of our strategy across every part of the business. Notably, this performance was achieved against the backdrop of an increasingly dynamic, uncertain, and in many cases, more challenging environment. Farmer Mac's ability to successfully navigate these crosscurrents is a testament to our team and the strength of our market position.

Farmer Mac continues to be a critical part of the financial ecosystem through providing liquidity in support of agriculture and rural infrastructure. As we execute our strategy, which we outlined at our 2026 Investor Day, we are on track to achieve $40 billion in business volume this year, reaching a key milestone two years ahead of the timeline outlined during our 2026 Investor Day. We continue to expect business volume growth to average approximately 8% to 11% annually through 2030, reflecting balanced expansion across our mission-focused businesses. Our strong performance to date has us tracking ahead of the pace required to achieve our 2030 guidance and positions us favorably relative to our previously communicated targets.

While business volume growth remains an important measure of mission fulfillment and a key strategic priority, our ultimate objective is to generate sustainable earnings growth that strengthens our ability to support rural America and deliver long-term value for our stakeholders. Accordingly, we remain focused on expense management, achieving operating leverage while making targeted investments to support efficient execution. This quarter, we continue to execute on those priorities, delivering strong growth, maintaining an efficiency ratio below 30% target, and providing $2.7 billion of liquidity to critical sectors of the American economy.

Outstanding business volume increased $1.3 billion in the third quarter of 2026, after taking into account all new business volume as well as maturities, sales, and paydowns on existing assets. This third quarter business volume increase was powered by broad-based growth led by our infrastructure finance line of business, where net outstanding business volume grew $920 million. This was driven by record quarterly net business volume growth in our renewable energy segment, where loan purchases and unfunded commitments grew 19.5% sequentially and contributed to over 45% of the increase in total net outstanding business volume in the quarter.

We continue to see strong opportunities across our entire infrastructure finance portfolio, driven by a once-in-a-generation investment in data center infrastructure, cloud storage and enterprise digitization, as well as increased onshore manufacturing, leading to significant energy generation capacity demand, in addition to ongoing grid modernization and upgrades. The scale and velocity of capital needed to support these demands are driving infrastructure growth tailwinds. We see comparable tailwinds in agricultural finance as financial institutions adapt to changing market conditions, balance sheet priorities, and risk management objectives leading to a shifting competitive landscape. We believe these evolving dynamics reinforce the value of Farmer Mac's role in serving as a secondary market to rural America and position us for continued growth.

Turning to our agricultural finance line of business, loan purchase activity in our farm and ranch segment had a strong quarter in what is typically a seasonally slower quarter for volume growth, sustaining the elevated pace that began in the fourth quarter of 2025 and continued through the first three quarters of 2026. This growth was aided by the first full quarter of Farmer Mac Loan Exchange, or FLEX, which makes it significantly easier for originators to submit loans to our ecosystem. We approved almost $700 million in loans during the third quarter of 2026, a record in loan approvals for any third quarter in our history. We saw net growth in loan purchases of $228 million during the quarter, outpacing the seasonally large number of loan repayments we typically see in the third quarter due to the July 1 payment date.

We continue to operate at an elevated pace for new business volume and expect loan purchase growth to continue as lenders seek liquidity, driven by the need to diversify from high-cost deposits amid strong loan growth, a focus on capital efficiency and returns, and ongoing volatility that many sectors of the agricultural economy are experiencing. This quarter's growth in farm and ranch also benefited from an acquisition of fee servicing rights associated with $1.4 billion of loans completed in July.

The Corporate Ag Finance segment grew modestly again this quarter to $2.14 billion in outstanding business volume. While deal flow activity in the broader agribusiness market was relatively muted during the first nine months of 2026, we have seen a sizable pickup in transactions heading into the fourth quarter of 2026. Two key themes have emerged driving this increase. First, transaction sizes are getting larger as agribusinesses look to enhance scale and navigate macro volatility, requiring incremental liquidity. Second, financial institutions continue to evaluate concentration levels and return on capital dynamics within the broader agribusiness sectors. In certain instances, this evaluation has resulted in decisions to reduce exposure or exit transactions entirely. The combination of these factors results in the need for incremental liquidity to support critical agribusinesses and more financial institutions are turning to Farmer Mac for reliable and consistent liquidity needed to support their borrowers.

Turning to our infrastructure finance line of business, outstanding business volume increased $920 million sequentially to over $14 billion as of quarter end, with all three segments contributing to net growth. This is a continuation of similar themes we have seen over the last year, specifically the strong interest and investment in data center construction, broadband expansion, and the construction and completion of renewable energy projects, reflecting the overall need for significant energy generation and transmission capacity in rural America. Net business volume growth in our power utility segment this quarter was $165 million, driven by strong net loan purchases of $208 million or an increase of 5.2% from the prior quarter. Excluding the $197 million pool purchase in the second quarter of 2026, net growth in power and utilities loan purchases accelerated to over 70% compared to net growth last quarter.

We continue to see a steady demand for capital in this segment as borrowers invest in system upgrades and grid modernization to support the significant increase in electrification demand as well as lenders managing their balance sheets. During the quarter, we provided over $1 billion in gross renewable energy loan purchases and unfunded commitments, and after scheduled maturities and repayments grew $586 million. This was the largest quarterly growth in net business volume in our history for this segment, surpassing the prior record by over $140 million. We expect a substantial need for new power generation to continue to drive renewable energy project demand, more than offsetting the natural runoff from a maturing portfolio.

Current deal flow remains robust, with our pipeline approaching $1 billion, underscoring the strength of our reputation and role in the market and allowing us to selectively deploy capital focused on appropriate returns and structures with strong counterparties. While the industry continues to adjust to the H.R. 1 phase-out of tax credits beyond 2027, as well as supply chain dynamics, we expect increased demand for energy generation to position the industry for continued growth. Even excluding tax incentives, the underlying economics of these renewable energy projects remain highly competitive, particularly with speed to market, as renewable energy project development timelines are often shorter compared to traditional power sources.

Broadband infrastructure also posted another strong quarter with net growth of $169 million, ending the period at just over $2 billion in business volume. While data center project investments continue to see strong demand, we have also focused on diversified business volume growth, providing liquidity to appropriately structure transactions supporting fiber, broadband, and tower projects that enhance critical digital infrastructure for rural communities. While the segment's growth has been substantial, our approach remains grounded in a close reading of market dynamics, and that discipline informs every decision we make. As the portfolio matures, we have intensified our portfolio management efforts, deliberately diversifying by geography, sub-segment, sponsor, and tenant, and pursuing a mix of funded financing structures so that the portfolio remains diversified and resilient should market conditions become less favorable.

Through the first nine months of 2026, we generated $10.5 billion in gross business volume supporting lenders and borrowers across rural America, exceeding the gross business volume generated in any annual period in Farmer Mac's history. That number best captures our mission in action, broadening access to competitive financing for American agriculture and rural communities. Backed by a robust pipeline across all segments and a strong capital position, we enter the final quarter of this year and look to 2027 with a disciplined execution that produces durable, high-quality earnings and a runway to continue growing.

We continue to remain mindful of the macroeconomic backdrop, including uncertainty around interest rates, trade and government policy, regulatory change, and geopolitical dynamics. A diversified portfolio that supports critical sectors of the U.S. economy, strong capital and liquidity position, disciplined underwriting, and a focus on expense management, all taken together give us great confidence that we can keep delivering consistent and durable results. However these backdrop dynamics play out, we believe Farmer Mac is uniquely well positioned to navigate the environment and continue to deliver on our mission.

With that, I'd like to turn it over to Matt Pollins, our Executive Vice President and Chief Financial Officer, to review our financial results in more detail. Matt?

Matthew Pullins

Thank you, Zach. As Zach noted, we delivered another outstanding quarter, highlighted by achieving $38.5 billion in outstanding business volume. Revenue for the quarter was $122.7 million, which we converted into $52.6 million of core earnings, or $4.82 per diluted share. With that overview, I will now walk through our quarterly results in more detail and discuss the key drivers of our performance. Net effective spread was $113.9 million in the third quarter of 2026, a 16% increase over the prior year period. After adjusting second quarter 2026 net effective spread for the one-time collection of $7.4 million of interest from a large delinquent permanent planting loan, third quarter net effective spread increased 3.5% sequentially. The year-over-year growth was driven by achieving record business volume across all segments.

On a percentage basis, net effective spread for the third quarter of 2026 was 116 basis points. This compares to 120 basis points in the year-ago period and an adjusted 118 basis points sequentially, which excludes the previously mentioned one-time benefit from the collection of interest. The 2-basis-point sequential decline, as adjusted, primarily reflects the impact of seasonally higher non-accruing loans in the farm and ranch segment, as well as business volume mix with higher AgVantage average balances during the quarter. This quarter's results also benefited from the previously mentioned acquisition of mortgage servicing rights associated with $1.4 billion of farm and ranch loans, which included $280 million in new loan service for others.

Our net effective spread performance continues to demonstrate the strength of our funding strategy and balance sheet. As market volatility and credit spreads increase, our reliable capital markets access, strong liquidity, and limited interest rate sensitivity become increasingly differentiated. Historically, these volatile environments have had a less pronounced impact on Farmer Mac compared to many other market participants. As funding becomes more expensive or less available elsewhere, our ability to consistently provide liquidity further enhances the value proposition we deliver to the market, creating opportunities to deepen customer relationships, capture attractive new business, and achieve favorable economics on new transactions while maintaining our risk standards.

While we remain well positioned on funding costs and liquidity, providing significant flexibility to support our customers, capitalize on opportunities, drive long-term growth, and enhance profitability. Operating expenses declined $1.5 million, or 4.2%, on a sequential basis, as expected, due to lower incentive compensation expenses this quarter, as the second quarter results included a one-time $4 million true-up of performance-based incentive compensation. We expect full-year compensation expense to be at the low end of our previously guided range of 20% to 22% year-over-year increase from 2025. Our strong operating performance resulted in an efficiency ratio of 27.5% for the quarter, below our long-term target of 30%. We continue to anticipate full-year operating efficiency ratio in the 27% to 29% range.

During the third quarter of 2026, we were minimally active in the tax credit market. We continue to view tax credits as an attractive source of risk-adjusted returns and a mission-aligned investment that supports renewable energy, infrastructure development, and job creation in rural communities. With nearly all of our carryback capacity utilized, we have greater flexibility to monetize tax capacity on a current year basis and remain engaged with a strong pipeline of opportunities. We expect future purchases to be selective and executed at opportune times, reflecting a disciplined assessment of tax capacity, capital priorities, valuation, and market conditions.

Turning to third quarter credit and asset quality results, the $11.1 million provision for credit losses was driven primarily by three factors: approximately $5 million or 45% of the total provision related to reserves established on new loan purchase volume during the quarter, reflecting robust growth in our infrastructure finance line of business. In addition, we recorded a $4.4 million provision on a telecommunications sector exposure within our broadband infrastructure segment. Credit had been deteriorating over time and was previously placed on non-accrual status with approximately $5.2 million of credit loss provisions previously recognized, primarily in the fourth quarter of 2025. The borrower subsequently filed for bankruptcy after liquidity challenges related to an unsuccessful fiber network build-out intensified. The remaining provision primarily reflected the impact of modest credit migration within the broader portfolio.

We continue to actively manage our portfolios through a disciplined risk management framework that incorporates ongoing monitoring of borrower performance, collateral values, industry conditions, and broader economic developments. As conditions evolve, we regularly reassess expected credit outcomes and adjust reserves as appropriate to reflect our current view of risk. This approach has been a long-standing component of our portfolio management strategy and supports the overall quality, resilience, and diversification of the portfolio across market cycles. Allowance for loan credit losses was $48.3 million as of September 30, 2026, reflecting a $1.2 million increase from the second quarter of 2026 and a $13 million increase from the same year-ago period. The sequential modest increase primarily reflects the cumulative impact of portfolio growth, which was the largest component of the increase along with select credit migration, partially offset by an $8.2 million charge-off on the previously mentioned single exposure within the telecommunications sector.

As of quarter end, the allowance for credit losses represented 16.8% of non-accrual loans, compared with 19.6% as of June 30, 2026, and 13.9% as of the year-ago period. 90-day delinquencies were 54 basis points at quarter end, up 17 basis points from the second quarter of 2026, and down 3 basis points from the year-ago period. The quarter-over-quarter increase was generally in line with historical seasonal patterns, particularly within our farm and ranch portfolio following the July 1 payment date. While delinquency levels can fluctuate during the annual payment cycle, overall portfolio performance remains stable, with delinquency metrics continuing to compare favorably to the prior year. Total substandard assets as a percentage of our entire portfolio were 2.1% this quarter, a deterioration from 1.7% as of June 30, 2026, primarily reflecting negative credit migration within the farm and ranch segment related to certain commodity and region-specific factors.

Turning to capital, Farmer Mac's core capital increased by $38 million during the third quarter of 2026 to over $1.9 billion, driven by continued earnings generation net of $17 million in dividends to common shareholders. As a result, core capital exceeded our statutory minimum requirement by $735 million, or 62%, at quarter end, an increase from the prior quarter. While strong business volume growth is increasing the need for capital, we remain committed to returning capital through our dividend to common shareholders. Our Tier 1 capital ratio was 12.9% as of September 30, 2026, compared to 13.2% at June 30, 2026. The quarter-over-quarter decline primarily reflected strong business volume growth as risk-weighted assets increased faster than capital, driven by robust customer demand and our ability to effectively deploy capital in support of our mission. Importantly, retained earnings growth contributed approximately 25 basis points to the Tier 1 capital ratio during the quarter.

We believe our capital position remains a key strategic advantage, providing flexibility to support increasing customer demand for liquidity while maintaining a disciplined approach to capital allocation and risk management. Last quarter, I discussed our plans to incorporate risk transfer solutions as a complementary source of capital capacity at Farmer Mac, which we view as a natural extension of the successful farm securitization initiatives we developed over the past several years. Building on that foundation, we continue to view risk transfer as a strategic and increasingly important component of our capital and credit risk management framework. We are actively advancing multiple risk transfer initiatives, including a credit-linked note transaction, which we believe can serve as a flexible tool to support growth, manage credit risk, and improve capital efficiency.

More broadly, these tools can strengthen our ability to create secondary market liquidity, expand our support of rural America, and potentially enhance shareholder returns over time, while reinforcing Farmer Mac's role as a critical link between investor capital and the agricultural and rural infrastructure markets we serve. We believe we may have the opportunity to execute the first transaction in the next generation of Farmer Mac's risk transfer solutions as early as this quarter. This would mark an important milestone in expanding our risk transfer capabilities and further integrating these tools into our capital and risk management strategy. Over time, we believe these risk transfer solutions can enhance our ability to support customer growth, manage risk, and deploy capital efficiently across market cycles. We will remain disciplined, pursuing opportunities only where transaction economics, risk management objectives, and strategic priorities are aligned.

In closing, this quarter's strong performance highlights the strength of our franchise and the successful execution of our strategy. As we continue to grow, we remain focused on expanding our mission, prudently deploying capital, and delivering sustainable earnings growth and long-term value for shareholders. As always, you can read more about our performance and strategy in our latest earnings release and in our Form 10-Q for the quarter, which we expect to file by November 9. Now, I would like to turn the call back over to Zach.

Zachary Carpenter

Thank you, Matt. We are extremely proud of our continued focus on providing liquidity to support American agriculture and rural communities. We are also excited about the opportunities ahead as we finish 2026 and look forward to 2027. As our leadership team completes its first full quarter together, we remain focused on our mission, delivering on the strategy we outlined at our Investor Day earlier this year and the opportunities ahead. We are focused on innovation and investing in our people and technology so we can deliver the capital and services our customers need to strengthen rural America.

The strong growth across our portfolios reinforces our confidence in the opportunities ahead. We will continue to pursue those opportunities thoughtfully and responsibly. Before we turn to Q&A, I do want to thank our employees for their dedication to our mission, our customers for their partnership, and our shareholders for their continued confidence in Farmer Mac. Operator, I'd like to see if we have any questions from anyone on the line today.

Operator

[Operator Instructions] Your first question comes from the line of Bose George with KBW. Please go ahead.

分析师问答

Bose George

The first question is just on your expectation for spreads. Is the 3Q number sort of a good run rate to look at as we look out into 2027?

Zachary Carpenter

You know, going line of business by line of business here, Bose, I would say in broadband, renewable energy, and corporate ag, the historical guidance we've given is relevant and maintainable. As we look at farm and ranch, as we've talked about in the past, clearly mix plays a component here. We had sizable AgVantage transactions in the fourth quarter and the second quarter of 2026. And clearly those are extremely strong returning transactions, but also have a lower NIM percentage. So that weight in the portfolio will drive that down. And again, as Matt noted, this quarter was impacted by seasonal non-accrual activity in farm and ranch. So I wouldn't necessarily use this quarter as a consistent bellwether for NES percentage going forward. Again, we target around that 115 to 120 basis points, but overall our focus is on double-digit revenue growth. We think that is the appropriate metric as we look out into the future on how we can drive higher revenue to drive shareholder value.

Bose George

Okay, great. Thanks. Actually, on the new risk-sharing transactions that you'll start potentially later this year, if you roll forward a couple of years, could that be a reasonably meaningful part of how you fund your balance sheet? And looking at some other industries, they also get capital relief for that in terms of regulatory capital. Is that part of the mix as well?

Matthew Pullins

Yes, both sides. This is Matt. Thanks for the question. So as we look out into the future, our objective is to have a broad array of tools available to support and capitalize our business. And a critical component of that tool set are actually multiple risk transfer options that we're currently evaluating. With respect to your question about how we foresee the future, yes, we definitely see risk transfer playing a more prominent role in our capitalization of the business or using those tools to create capital capacity, which enables us to scale up the business and increase the amount of liquidity we're able to offer to the agricultural and rural infrastructure markets. Our strategy and plan is to take a programmatic approach to issuing risk transfer transactions, and ideally, over time, get into that being somewhat serial in nature, where we are commonly coming to market with tools like credit-linked notes.

Bose George

Okay, great. Thanks. Actually, just on the regulatory discussion with regulators on capital relief related to that, is that part of the mix as well?

Matthew Pullins

Yes, so there's a two-pronged objective for our risk transfer strategy. The first is maybe a little more directly evident, and that is to aid in our credit risk management framework. The second objective is very much in terms of capital relief and capital capacity, and that would relate to the regulatory capital framework and how it treats the risk that remains on the balance sheet after the credit risk transfer transaction. And so we are actively engaged with our regulator, the Farm Credit Administration, in discussions about the specific regulatory capital framework and regulatory capital relief that would be received through these risk transfer transactions. And that's something that I would anticipate that we would have more information to share in the coming quarters as to the specifics of, as these transactions come to bear, how they are impacting our regulatory capital levels.

Bose George

Okay, great. Thanks.

Operator

Your next question comes from the line of Bill Ryan with Seaport Research Partners. Please go ahead.

William Ryan

First question is on broadband and more specifically, the data centers given what's going on in the market today. Broadband in total, I believe, is about 5% of outstanding, and I believe data center is probably about 3% to 3.5% of the total. So you're kind of a small fish in a very big pond, but unfortunately, the stock does tend to trade with the exposure at times. If you could maybe go through for investors the 4 or 5 attributes of the loans in the portfolio that do minimize the risk? Have you seen any major project delays? And what kind of risks do you see as these credits move out of the construction phase, which I believe most of them are in right now?

Zachary Carpenter

Hi, Bill. It's definitely something in the news post the election results. Just to take a step back as we think about our data center portfolio, I think it really comes down to how we frame the risk component of these transactions. And as we've talked about for many quarters now, we've been very methodical and very specific in terms of the risks that we look at, specifically power in place, permitting completed, appropriate developers, appropriate sponsors, investment-grade hyperscaler tenants. We don't consider underwriting transactions unless all of that is in place. And frankly, that's our focus on being at the lower end of the risk spectrum in terms of this entire ecosystem. So we feel very good about what we're underwriting, the transactions that we're participating in, and if anything deviates from our credit quality, it's not something we need to participate in, just given the general growth we have across our portfolios.

As it pertains to our overall portfolio, they're all in construction at this point. We're actively monitoring them. Approximately 3/4 of the entire portfolio are on track or near completion. There is a portion that clearly we're monitoring, and these are just typical delays. There's nothing significant that we've noticed that will give us concern in terms of what's transpired in the market or a lack of completion. Going forward, I actually think what's transpiring is, frankly, credit positive for our portfolio. The data centers completed or nearing completion are going to be more valuable. Clearly, you're going to see capital divert to more friendly states where data centers can be built. This is probably more of a 2028 dynamic. But as we look out to 2027, we will see the significant amount of our unfunded commitments start funding as these near completion. Overall, we're going to continue to monitor the real-time developments and focus on the potentially right transactions that support rural communities and most importantly fit our credit risk standards.

William Ryan

Okay, thanks for the detailed answer on that. And just a follow-up, looking at the operating leverage, you had very good performance for several quarters. This quarter, you had like 17% revenue growth and the OpEx was up about 16%. Looks like there was a step up in G&A, which kind of drove that disparity, if you will. If you can maybe talk, is there anything specific in G&A this quarter, and then how are you viewing the operating leverage long-term?

Matthew Pullins

Thank you for the question, Bill. In regards to G&A expense this quarter, there's two things that are driving the sequential increase in that particular line item. One is, as we see deal volume pick up, that does result in elevated legal expenses and other transaction costs. And that is especially evident in our infrastructure finance space. So the big growth that we saw this quarter in renewable energy, that ties back to deal costs and ultimately G&A expenses that you're noting on the income statement. The other factor is that our second quarter results actually benefited from about $0.5 million of legal expenses being recaptured on the same delinquent permanent planting loan that we discussed increased the interest income in the second quarter. So that actually is a bit of the component of what's driving the increase versus the prior quarter.

In terms of going forward, our objective as a management team operating the business is to continue to drive operating leverage. And that's something that we are very intently focused on as that is a key metric in our view of the effectiveness of our ability to monetize the investment in the underlying platform here at Farmer Mac.

Operator

Your next question comes from the line of Brendan McCarthy with Sidoti. Please go ahead.

Brendan Michael McCarthy

I just wanted to start off on farm and ranch volume. I know you mentioned you acquired about $280 million of third-party loans connected to the larger MSR acquisition. I guess outside of that $280 million, it looks like farm and ranch volume was a little bit more modest on a sequential basis. Was that primarily seasonality at play, or repayment activity, or what would impact that growth?

Zachary Carpenter

Yes, hi, Brendan. Typically, the third quarter is seasonally lower than any other quarters in a calendar year. You start to see lower applications as the farmers are out in the field planting and waiting for harvest, and we saw that transpire in the May-June timeframe. And so when you think about how the timing works, loans typically close 60 days after we get that application in the door. And so we generally expect the third quarter, especially given the July 1 payment date, to be seasonally lower. But on the positive end of the spectrum, as I mentioned in my prepared remarks, we had almost $700 million of approvals in the third quarter alone, which is by far a record. So we've seen the pickup in applications into our ecosystem, and we're seeing the pickup in loan purchases as we head into the back half of the year. Typically, the fourth quarter is extremely strong, and we anticipate it to be strong in 2026 as we look to close out the year. So I would highlight it as, frankly, seasonal. But if I go back in time and compare it to prior years, it was still a pretty strong quarter for this quarter.

Brendan Michael McCarthy

Got it, that makes sense. I appreciate the detail. And then more broadly on volume growth, you mentioned you're on track to hit that $40 billion target this year, well ahead of the target that you laid out at the Investor Day. I guess on a broad perspective, and I know there's some lumpy wholesale farm and ranch volume in there that helped, but what areas have really outpaced your expectations?

Zachary Carpenter

Yes, it's really been broad-based. I think as we've gone through the first three quarters of this year, we've been extremely pleased with the growth across all platforms. Farm and ranch is operating at a significantly elevated and, frankly, a record level. We continue to see very, very strong growth in renewable energy and broadband. And we've talked a lot about the whys there. What's been also exciting to see is the elevated opportunities we've seen in power utilities, especially given the needs for the electricity generation demand and capacity. So that's been great. I also noted Corporate Ag Finance, which has seen a relatively muted year, has a significantly strong pipeline. So I think as we conclude this year, it's going to be very broad-based growth. And as we noted, as we head into 2027, you have, frankly, significant interest in electrification demand across this country that we think is a strong tailwind for the entire ag finance line of business. Coupled with our focus in the ag space and farm and ranch, we feel very optimistic that we're going to see the upper end of the range we laid out in the 2030 targets in the year of 2027.

Brendan Michael McCarthy

Got it. That's great. And last question for me, just on the credit side. You mentioned total substandard assets as a percentage of the portfolio ticked up to about 2.1% this quarter. I know that's up from that 1.5% to 1.7% range. Do you see this as more of a structural increase, or is this more temporary? And I guess what range are you comfortable with?

Zachary Carpenter

I'll just talk a little bit about what kind of drove that, and I'll turn it over to Matt to talk maybe a little about the range. By far the majority of what drove that substandard increase was in farm and ranch. And as we noted, it was really broad-based by commodity and region-specific. And to get a little bit more detail, it's predominantly the Northwest region of the country and the Southwest. And clearly, as you look at fruits, specifically apples and grapes, we've talked about the impacts in the vineyards and the grape space just given lower interest in alcohol consumption. That was kind of a theme that we've seen in terms of increasing that substandard rate. In the Southwest, clearly many of these areas are dealing with drought conditions. So that is also contributing to that increase. Now, what I would say is as we look at these loans transitioning to substandard, the LTVs are very strong. In fact, they're all around on average 50%. So, we're going to see some migration in the ag space based on what sectors are dealing with more difficult times, but we feel very comfortable that the underlying collateral is very strong and has limited risk of loss. But Matt, maybe talk a little bit about our thought process on metrics.

Matthew Pullins

Yes, on metrics. Brendan, thanks for the question. You may have noticed in my comments a reference that the farm and ranch segment is really driving the increase in substandard assets. When we think about this in terms of the broader portfolio, there are areas of the farm and ranch portfolio where we've seen some stress as Zach talked about. But in terms of translating that to the economics of our business and specifically providing for credit losses as of today, we don't see this being a significant driver, largely because of the value of the collateral supporting these loans.

In terms of the overall metrics or range of percentage of loans that are substandard, we don't provide guidance on that particular metric. However, I would say that what we're focused on is managing the portfolio to our overall risk framework and ensuring that we're not overly exposed to any one geography or any one commodity sector. That's an important part of managing our overall exposure to substandard assets. Additionally, substandard assets is just one of many factors or data points that we evaluate in terms of managing our credit risk and our overall loan portfolio. Substandards did spike this quarter, but we do not see any indications in terms of that same type of stress, or it's not bleeding through in terms of increases in delinquencies, at least relative to historical seasonal trends, particularly in the farm and ranch space.

Brendan Michael McCarthy

Understood. Thanks, Zach. Thanks, Matt. That's all from me.

Operator

Your next question comes from the line of Gary Gordon, a private investor. Please go ahead.

William Ryan

Actually, most of my questions have been answered, so just one quick one maybe. On the $10 million write-off on the telecom loan, did anything in that loan generate a learning experience for the underwriters to change your approach to maybe even that category of lending?

Zachary Carpenter

Yes, hi, Gary, it's Zach. Clearly we talked a little bit about this in the fourth quarter, as we noted, where we took a provision at that point in time. As we take a step back and we always want to look retrospectively and see if there's anything we could have done differently, and frankly, as we talk to the team and look at the underwriting philosophy and structure at the outset, we feel very comfortable that the underwriting was sound and we made the right decision in providing liquidity to this syndicated transaction.

Some of the themes that as we think about in retrospect that we want to monitor going forward, as well as take into consideration at the initial underwrite, is the focus on management and their capabilities to support large fiber build-outs, cost flexibility. In this scenario, there was significant cost inflation that drove the need for increased liquidity. So really understanding more how a large project can be built in terms of management capabilities, cost overruns, expertise, available labor, etc. So again, we felt the underwriting was solid. Can we think about monitoring the project more at the initial underwrite to see if there's flexibility for deviations? I think that's a nice area that we can enhance going forward.

William Ryan

Okay, thanks. Appreciate it.

Operator

And with no further questions in queue, I would like to turn the call back over to CEO Zach Carpenter for closing remarks.

Zachary Carpenter

Well, I just want to conclude by thanking everyone for listening and participating in our call this afternoon. We will look to have our next regularly scheduled call in February to report our full year 2026 results, and we look forward to sharing more information with you at that time. And as always, if you have any questions or want to discuss anything with us, please don't hesitate to reach out. With that, thank you very much and have a great night.

Operator

Thank you again for joining us today. This does conclude today's presentation. You may now disconnect.

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