Driven in part by persistent low interest rates, the Twin Cities’ public financial firms saw flat revenue growth in 2015 as a group.

The largest of them — U.S. Bancorp, Ameriprise and TCF Financial Corp. — saw only 1 percent growth.U.S. Bancorp

That’s important, because while the eight financial services companies on the Star Tribune 100 list this year account for 7 percent of the overall revenue, they produce a quarter of overall profits and more than half of the total assets.

Specialty lines insurance writer OneBeacon Insurance lost 6.5 percent of revenue last year, with the challenging markets compounding the impact from discontinuing two specialty insurance lines since mid-2014. This year, the Plymouth-based company will celebrate its 15th anniversary since inception in June 2001 and 10 years as a public company

Jon Arfstrom, who covers banking companies including U.S. Bancorp and TCF for RBC Capital Markets, said it hasn’t always been the case that declining or low interest rates have been bad for banks and financial services companies.

The persistent low interest rates have left banks with little room to compensate and have hurt their profits.

“Loan rates are low and they’ve remained low, and the banks don’t have any room to reduce deposit costs because they are at zero,” Arfstrom said. “It’s as simple as that.”

Most banks’ stock benefited modestly from the December rate hikes, but more rate rates were expected.

“Most banks and financial companies would benefit from the Fed taking up short-term rates,” Arfstrom said. The year “is off to a tougher start because of that and because of the expectation that interest rate increases have been pushed out.”

That is evident in the declining market values of the financial services companies on the list. We measured market cap from April 2015 through April 2016, and seven of the eight companies saw their market values decrease during that time.

Despite the tough environment, U.S. Bancorp and TCF Financial have done a good job of focusing on the fundamentals of their business and have remained profitable.

“Both companies have been very disciplined on expenses. You’ve always seen that from U.S. Bank,” Arfstrom said. “But with TCF, you’ve seen them close some of their branches, some of their less-profitable branches.”

Improving credit quality has also helped the banks remain profitable.

“The amount of money that they have to set aside for bad loans, that continues to improve,” Arfstrom said.

U.S. Bancorp and its predecessor, First Bank System, have consistently been near the top of the largest public companies in Minnesota. It has been one of the 15 largest companies by revenue since the inception 25 years ago of the Star Tribune 100. U.S. Bancorp has also been one of the best stocks to own.

“We think they are the best-performing bank stock over the last 20 years,” Arfstrom said. “And one of the best in the last 10 and five years as well.”

Arfstrom’s second-highest-rated bank during that time? Wells Fargo. It was formerly known as Norwest Corp. before Minneapolis-based Norwest in 1998 acquired Wells Fargo, taking its name and its San Francisco headquarters.

At that time, about 13,500 out of the approximately 57,000 Norwest employees were in Minnesota. Today, Wells Fargo employs more than 20,000 Minnesotans, and it is the third-largest private employer in the state.