Surging long term U.S. Treasury yields near 5% on the 10 and 30 year are reshaping how cash is treated, turning once sleepy money pockets into a real investment battleground. As investors weigh richer risk free returns against equity risk, cash management stocks exposed to this rate shock come into sharper focus. This article walks through 3 such stocks from our screener that may be relevant for your portfolio decisions today.

The three stocks covered below are just a starting sample. The full screen surfaced 44 more U.S. money market and cash management providers with equally compelling stories that are not discussed here.

If you want to identify potential fits for your own cash allocation approach, head straight into the U.S. Money-Market and Cash-Management Product Providers screener to analyze the full set of companies on your own terms.

First Western Financial (MYFW)

Overview: First Western Financial is a Denver based wealth advisory and private bank that helps high net worth clients and institutions manage cash, investments and trust services, including money market and other short duration cash parking solutions. Its business blends deposit gathering, lending and investment management, which ties fee income and banking revenue to how clients choose to hold and deploy their cash.

Operations: First Western Financial generates about US$100 million of revenue from its Wealth Management segment and about US$6 million from Mortgage activities, with all US$107 million of revenue earned in the United States.

Market Cap: US$302 million

Investors looking at cash management themes may want to keep First Western Financial on the radar because it sits at the point where client cash, advisory fees and private banking all meet. Wealth Management contributes the vast majority of revenue, so money market and short duration cash solutions linked to client deposits can be a key income source as yields on cash reset. At the same time, a P/E above the broader US banks sector and recent insider selling raise valuation and governance questions. That mix of cash linked characteristics and boardroom watchpoints may be relevant for investors focused on this theme.

First Western Financial’s premium P/E and insider selling may be masking a more complex cash centric story. Get the full context and see what the market might be missing in the 3 key rewards and 1 important warning sign

Build your own cash management shortlist

First Western Financial and the other two cash focused stocks in this article all came from a single screener, but the real opportunity is in shaping your own filters. Use our flexible Screener to mix valuation, balance sheet, risks and more to suit your style, or start with any of our curated Investing Ideas.

Forbright (FRBT)

Overview: Forbright is a U.S. bank holding company that offers checking and savings accounts, money market and other deposit products, plus lending and advisory services for consumers, middle market borrowers and specialized sectors such as healthcare and real estate. Because it gathers deposits and runs sweep and cash management solutions through a proprietary digital platform, Forbright can be directly exposed to how clients choose higher yielding short duration cash options when rates move.

Operations: Forbright generates about US$325 million of revenue from Banking activities, all of which currently comes from the United States.

Market Cap: US$965 million

Forbright provides exposure to cash-rich clients hunting for yield as long-term U.S. Treasury rates approach 5% and digital customers compare every basis point on deposits. The bank is building a granular, lower cost funding base through its proprietary online platform while running six national lending strategies. As a result, the mix of deposit growth and credit risk in areas such as healthcare and lender finance is particularly important. Recent IPO proceeds and index inclusion have increased visibility. However, credit quality, a relatively modest forecast ROE and competition for online deposits remain key watchpoints. The full story is in how Forbright balances higher yielding cash products with funding costs, loan growth and credit reserves over time.

Forbright’s growing digital deposit engine and six national lending strategies hint at a story that many investors may not have pieced together yet. See how the bank’s funding mix, loan focus, and credit reserves intersect in the analysis report for Forbright

Peapack-Gladstone Financial (PGC)

Overview: Peapack-Gladstone Financial is a New Jersey based private bank and wealth manager that offers affluent clients and institutions a mix of checking, savings and money market accounts alongside lending, trust, tax and financial planning services. This ties a meaningful part of its fee and interest income to how clients manage short duration cash and investment balances.

Operations: Peapack-Gladstone Financial generates about US$221 million of revenue from Banking and about US$68 million from Wealth Management, with all roughly US$289 million earned in the United States.

Market Cap: US$790 million

Peapack-Gladstone Financial gives investors a focused way to access client demand for money market and cash management solutions as long term U.S. yields climb, because its private banking and wealth units already handle sizeable deposits, treasury services and real estate related cash flows. Recent earnings and net interest income figures highlight its current earnings capacity, while new senior hires and remote check capabilities point to an expansion of treasury and cash handling services for commercial and real estate clients. At the same time, a premium P/E to many banks, modest ROE, concentrated Metro New York and New Jersey exposure and past insider selling mean investors may need to weigh fee and cash linked income characteristics against valuation, credit and governance risks that could matter if conditions change.

Peapack-Gladstone Financial’s cash heavy private banking and wealth mix could be hiding a richer story behind that premium P/E. Explore how fee income, deposit concentration and credit risk compare in the 4 key rewards and 2 important warning signs

Seeking Alternatives Beyond Cash Management?

Fresh stock ideas do not stay under the radar for long. Momentum shifts, entry points get caught by the crowd and edges can change quickly. Review opportunities early to avoid missing potential setups.

• Target income that can complement your cash by scanning a curated set of higher yielding companies in the 12 dividend fortresses.
• Spot potential growth stories still flying under most investors’ screens by reviewing the carefully filtered 18 high quality undiscovered gems.
• Evaluate structural trends in digital assets by assessing businesses filtered through the 20 cryptocurrency and blockchain stocks while the market debate around blockchain continues to evolve.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.