When Sacramento's Tyler Stover and Matt Halverson started Banter Records five years ago, they never expected to be where they are now.

The two friends just found that Neon Indian, a Texas-based band signed to Banter's sister label, Lefse Records, is scheduled to perform live on Late Night with Jimmy Fallon Thursday night. Popular music website Pitchfork Media described Neon Indian's debut album, Psychic Chasms, as "one of the year's most replayable albums," and rated its lead single, "Deadbeat Summer," the 13th-best song of 2009.

As a result, Neon Indian gained wide popularity and is scheduled to play at major festivals like Bonnaroo and SXSW this summer.

"No one really knew about [Neon Indian]," Halverson said. "It was only a week or so after we signed them that they took off."

Halverson, 31, and Stover, 29, both grew up in Fair Oaks but went their separate ways after high school. Stover earned a degree in industrial technology at Cal Poly, while Halverson quit school in Santa Barbara to intern for a New York music label.

After Stover got his first taste of the music business writing the business plan for the music label as his senior project, the two decided to move to San Diego and start a home-based record label. They signed a number of their friends' bands in the San Diego and L.A. areas, but after four years, they decided to add management and promotional services, changing the name to Banter Media and Management.

They created Lefse in part to sign Neon Indian. After discovering Neon Indian on a blog last year, they wanted to sign them to a unique label, since their sound didn't match up with Banter's lineup. They named it Lefse after a Norwegian flatbread Halverson's family grew up eating.

Last May, Halverson moved back to Sacramento, and Stover followed six months later.

Wednesday morning, the friends sat in their Midtown Sacramento office with Halverson's shaggy gray Shih Tzu and roommate/intern "M.K." The three walked from East Sacramento while Stover walked alone from his Midtown home.

All three employees in the room - Stover, Halverson and M.K. - type on Apple laptops. The office is small, but holds a lot of CDs and records. No one has a title or a business card.

Only months ago, Stover and Halverson had day jobs, but now they're running three record companies full time. Stover worked full time until last October testing packages for medical suppliers so they can have their shipments approved by the FDA. Halverson didn't mention what he did. Instead, he kept typing.

Halverson's duty is to recruit bands onto each PR roster and label, while Stover runs each band's management and promotional services. A handful of interns (during the interview, one named Megan worked in a back office booking tours for bands) do everything else.

The friends recently decided to start another label, to highlight lesser-known bands they personally listen to.

"We've got Banter Records, Lefse Records, Banter Media, and now we're also starting an all-digital label, Waaga records," Stover said.

"Waaga (is) an all-powerful African god from Ethiopia," added M.K., who runs the Waaga imprint for Banter.

Waaga's first release, Witches, from another Texas-based artist, FUR, will come out Feb. 23. But for analog lovers, Lefse still releases vinyl of Neon Indian's album Psychic Chasms.

"Lefse is reserved more for bands that are on tour nationally, who demand product and physical distribution" Halverson said. "Waaga is for bands we want to work with but are not at that level yet. Because there is less risk involved, we can sign more niche bands."

Photo 3: From left to right: M.K., Halverson, Stover