Committee hears 5 Star Bank account pitch; county to confirm investment‑policy compliance before opening

Alpine County officials discussed Thursday whether to open a public money market account with 5 Star Bank as an alternative to the State Treasurer’s Local Agency Investment Fund (LAIF). The item was presented as informational; the committee did not approve opening an account and said staff must confirm compliance with the county’s investment policy before any account is opened.

Klaus Leidenbauer, director of finance and county treasurer, briefed the committee on prior presentations by 5 Star Bank and said staff had discussed the option with the interim county counsel and the new county CEO. Reagan Ballo, senior vice president of 5 Star Bank, joined the meeting to answer questions.

A committee member raised concerns about the bank holding company’s asset concentration, citing public filings that the holding company’s assets are heavily weighted toward commercial real estate and concentrated in Northern California. The committee member said they had reviewed the bank’s SEC filings and expressed concern about concentration risk.

Reagan Ballo responded that the county’s funds placed in the proposed public money market account would be fully collateralized by a letter of credit from the Federal Home Loan Bank of San Francisco and that the bank had pledged its loan portfolio to that Federal Home Loan Bank. “The collateral for the county is a letter of credit with the Federal Home Loan Bank of San Francisco,” Ballo said.

Leidenbauer said the county would not open the account without first verifying the arrangement meets the county’s investment policy, and he offered to take another pass at the policy language before any action. The item was recorded as informational and no vote to open an account was taken at the meeting.