It is with decidedly mixed emotions that I tackle Minneapolis-based super-regional bank and Motley Fool Income Investor recommendation U.S.Bancorp (NYSE:USB). As a former employee of one of its operations, I can't begin to tell you how enthusiastically I'd like to emphasize the word "former." On the other hand, I can't help tipping my hat to what might be one of the best-run and most shareholder-friendly banks around.

Results for the third quarter highlight a key aspect of what I think makes U.S. Bancorp so good: amazing attention to cost control. Net revenue rose only 1.8% in the quarter, and net interest income was barely up at all. Yet the company posted more than 8% earnings growth and almost 11% growth in earnings per share.

Speaking of cost control, non-interest expenses actually declined by 3% in the quarter, and the efficiency ratio was a double-take-inducing 43.8%. Relatively speaking, an efficiency ratio in the 50s is pretty good, and one in the high 40s is usually considered great. But U.S. Bancorp's is dropping into the low 40s!

Not only has the company been making a fair bit of money, but in keeping with good Midwestern tradition, it's also sharing it. Management said it returned more than 87% of third-quarter earnings back to shareholders through dividends and buybacks and is targeting an 80% rate for the foreseeable future. Somehow, I don't think this is a bank that's putting a lot of marble and artwork into its branches. As you might also imagine from the above, return on assets and equity are very good for this bank -- maybe the best I've seen in the comparable banks that I follow.

Now for some of the bad news.

Net interest income rose only 0.5%, and the net interest margin fell to 3.95% from 4.22% last year. Non-interest income was up 3.4%. Average loan balances increased 10.1%, and interest-bearing deposits rose 7%. In other words, growth in the basic operations (borrowing and lending) is a little pokey. Now, the flip side to that is that you can argue that a bank should pull back when business is no longer sufficiently attractive, and current business trends in banking are tough.

With an ingrained spirit of what I'd call "enlightened cheapness," U.S. Bancorp is a soundly run bank that deserves more than a passing glance from conservative and income-oriented investors. It doesn't have the flash of companies like Commerce Bancorp (NYSE:CBH) or even other banks like Citigroup (NYSE:C) or Wachovia (NYSE:WB). But it knows who and what it is -- something that can spare investors from expensive flights of fancy in the boardroom. Investors should keep an eye on deposit and loan growth -- the business doesn't grow if those don't grow -- but this looks like an interesting investment idea all the same.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).