Bully for US Bancorp!

The last few months haven't been particularly pretty for financial institutions. Heavyweights like Bear Stearns (NYSE: BSC  ) , Merrill Lynch (NYSE: MER  ) , and Citigroup (NYSE: C  ) have been taking heat for their lackluster performance, thanks to turbulent markets and a nasty housing outlook.

While US Bancorp's (NYSE: USB  ) third-quarter results weren't earth-shaking, they emphasized the importance of, well, not doing anything stupid. In a tough banking environment, CEO Richard Davis noted that the company's results emphasized US Bancorp's "financial strength and emphasis on creating a business model that provides consistent and sustainable results." How deliciously boring! No wonder Warren Buffett is such a fan.

Without further ado
Though net income fell slightly year over year -- thanks partly to higher credit costs -- a lower share count versus last year meant that earnings per share rose by a penny, slightly beating analysts' estimates.

Net interest margin stood at 3.44%, a notable fall from the year-ago 3.56%. However, this figure stayed flat compared to the previous quarter, so at least it hasn't continued to deteriorate. At 2.09%, return on assets was a similar story -- down from last year, but level with last quarter. Return on average equity finished the quarter at 23.3%, up slightly from the prior quarter. These ratios keep US Bancorp at the top of the heap when compared to competitors like BB&T (NYSE: BBT  ) and Comerica (NYSE: CMA  ) .

The bank's wealth-management and payment services, for which some argue it doesn't get enough credit, continued to perform well. Wealth-management net income grew 11.5% year over year, while payment processing ticked up by more than 9%.

US Bancorp wasn't completely immune to stress in the credit and real estate markets, and as a result, it did see notable upticks in nonperforming assets, accruing restructured loans and loans 90 days or more past due. Net charge-offs were $199 million, up 47% over the third quarter of last year. Though this figure hampered results, it's practically a joke compared to the write-offs that many competitors are making.

Take your bow
One group in particular might have good reason to pat itself on the back: investors who had the confidence to stick with US Bancorp, buying even as it got pummeled in August. While the stock's still below the highs it reached earlier in the year, it's up a quick 11% from its August lows, and the company continues to perform.

It will be tough for any bank to fight tight credit conditions and an otherwise difficult environment. But as long as US Bancorp sticks to its knitting, investors should continue to enjoy good returns over the long term.

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