The Farm Credit System (FCS), a U.S. government-sponsored entity (GSE) and the largest single lender to U.S. farmers, on Tuesday reported net income of $4.724 billion for calendar year 2014, up 2 percent from $4.640 billion a year earlier.

"Credit quality indicators remained strong reflecting the sustained period of favorable economic conditions in agriculture during the past several years," Tracey McCabe, president and chief executive officer of the Federal Farm Credit Banks Funding Corporation, said in a statement.

The FCS is a federally chartered network to provide financing and related services in rural America through four big regional System banks and 76 affiliated Associations. Unlike commercial banks, they do not accept deposits but raise funds through debt securities. The FCS securities carry an implicit U.S. government guarantee, like other GSE's, that provide it an advantage in credit markets.

"The System continued to build capital to withstand adverse changes that may arise in the future as general and agricultural economic conditions change," McCabe said.

Separately, the largest FCS system bank, Denver-based CoBank, on Tuesday reported net income of $904.3 million for the year, up 6 percent from $856.5 million in 2013. It cited "higher loan volume from a range of rural industries, including agricultural cooperatives, food and agribusiness companies, electric distribution cooperatives, power supply customers, and communications service providers."

Pressures on grain farmers in particular have been rising with four-year lows in crop prices after a second straight bumper harvest. CoBank noted that its fourth quarter net income was $215.4 million, a decline of 5 percent from $227.6 million a year earlier.

Overall, FCS made a provision for loan losses of $40 million for 2014, as compared with a loan loss reversal of $31 million for the prior year. The provision consisted of $105 million of provisions for loan losses recorded by some System institutions, partially offset by $65 million of loan loss reversals recorded by others.

Included in the 2014 provision for loan losses was a $47 million provision recorded by one association, the bank said.

"The provision for loan losses recognized in 2014 was also due to specific credit challenges for a limited number of customers," the FCS said.