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US Bancorp Is the Best Big Bank That Everyone Should Be Talking About

Stocks in this article: USB WFC BRK.A BRK.B

NEW YORK (TheStreet) -- US Bancorp (USB) is a major banking institution that flies under most radar screens.

That's hard to figure out when the news is full of reports about the fines, penalties, rejected capital plans, improper accounting and all manner of sundry mismanagement episodes involving the top U.S. banking centers.

Wells Fargo (WFC) is Warren Buffett's largest position, so that well-run business gets its fair share of coverage. But US Bancorp? Nearly nada.

USB is the fifth-largest bank in the United States. The business model is remarkably pedestrian. The bank takes in customer deposits, makes community mortgages and loans, and collects fees for routine banking services. The M.O. is "Main Street," not "Wall Street."

Quietly, USB common shares represent Buffett's and Berkshire Hathaway's (BRK.B) eighth-largest position at about $3.25 billion. What's more, the quarterly 13-F disclosure statements indicate that in each successive period the position has grown.

Buffett's not alone. TheStreet's Jim Cramer owns USB in his charitable portfolio, Action Alerts PLUS. I own some as well.

US Bancorp by the Numbers

By some measures, US Bancorp is the best-run, most efficient outfit of the mega-bank lot. Here are two slides comparing USB with other major-banking peers. The first slide highlights return-on-equity and return-on-assets, two typical measures of how effectively management handles capital:

Courtesy of Wells Fargo

Next, we see how our bank stands out when gauged by efficiency ratio, or non-interest expense as a function of total revenue. This demonstrates how well management controls costs:

Courtesy of Wells Fargo

Please note these slides did not come from a US Bancorp presentation. They both were taken from the 2014 Wells Fargo Investor Day presentation materials. Even Wells' senior leadership must acknowledge USB's perch atop these metrics.

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