May 8, 2025 • 16 mins
As independently owned and operated small businesses, fast-food restaurant franchisees have unique business needs. They have mobile and often part-time workforces, complex inventory management and the constant challenge of managing both a small business and being the face of a major brand. On the latest episode of the ABA Banking Journal Podcast — sponsored by Bix2x — Wendell Bontrager talks about how Sonata Bank is working with this unique market segment.
For example, “we can come in at fractional costs to provide them things like telehealth, mobile phone insurance, pet insurance, in a way that is free to the employee but is done and sold through the franchisee,” says Bontrager. He outlines Sonata’s business of lending to “quick-service” restaurants, as they’re often called in the trade, paired with employee benefits, treasury management and a software-as-a-service platform for QSRs.
Bontrager also talks about the health of the Nashville, Tennessee, market where Sonata’s community bank franchise is headquartered and how the organization has been able to capture talent with hybrid and remote workplace offerings.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Wendell Bontrager (00:02):
So one of the things about Sonata that's different than
a a traditional community bank, iswe are a bank for Middle Tennessee.
We're based in Williamson County,however, we are also pursuing franchise
restaurant business on a national basis.
So that is a niche that we'rereally pursuing nationally.
Evan Sparks (00:18):
From the American Bankers Association, this is the
A BA Banking Journal podcast.
Today's episode is presented by Biz2X.
Welcome back.
I'm Evan Sparks, and I'm delightedto have on the show today, Wendell
Bontrager, who is the newly appointedpresident and CEO of Sonata Bank
in the Nashville, Tennessee area.
Sonata is a relatively new bank in that,in that very fast-growing geography,
(00:40):
fast-growing local economy, and sodelighted to have you on to talk a
little bit more about the bank andwhat's going on in middle Tennessee.
So Wendell, thanks for being on the show.
Wendell Bontrager (00:51):
Well, Evan, thank you for inviting me.
It's great to be here.
Evan Sparks (00:54):
So I'd love it if you could give me, just kinda give our listeners
a quick overview of your journey inbanking where, you know, how did you
get into the industry and what haveyou, what, what, where has your career
path in this industry taken you so far?
Wendell Bontrager (01:08):
Absolutely.
So I'm a native of Indiana.
Born and raised in a small town,and my banking career started with
National Bank of Detroit, which isnow part of the Chase franchise.
I was started in the commercial credittraining program spent two years there
and that was in Elkhart, Indiana.
After becoming a commercial banker,made the move to Fort Wayne, Indiana.
(01:29):
And after a couple years with NBD,I got involved in my first bank
startup, which was Tower Bank andTrust Company based in Fort Wayne.
That was 1999.
Jump ahead 15 years.
I could write a book on my experienceat Tower Bank, everything you
should and should not do in banking.
But in any event, after that15 year period, I was part of
our, our leadership team there.
(01:50):
We sold the the bank to Old National.
After a couple years with OldNational, I was recruited to become
president and a board member ofEquity Bank in Wichita, Kansas.
So we moved out to Wichita, my wifeand I did, and then after a few years
there, moved to Middle Tennessee andthat was when I was introduced to
the team that was forming Sonata Bankand decided to join forces with with
(02:14):
our co-founder and founding chairman.
Evan Sparks (02:18):
I definitely wanna learn more about Sonata Bank, but
you intrigued me with the lessonsfrom the Tower Bank, your experience
with Tower Bank up in Fort Wayne.
What are some of the highlightsin terms of things you learned
going through a bank startup?
You know, things that you, that workedreally well, things you'd you give people
advice about, about, we don't have a lotof bank de Novos these days, and so it's
nice to get a little perspective fromsomebody who's been through, been, been,
(02:41):
been in multiple de novo environments.
Wendell Bontrager (02:45):
You bet.
So I'll give you the highlights of Tower.
First of all, we, it was thetruest sense of a community bank.
Timing was good and we,we did crowdfunding before
crowdfunding was a thing.
And I say that because when we,when we sold stock, we allowed
shareholders to invest as little as $10.
So we had shareholder that had asingle share all the up to some
(03:06):
major shareholders that was.
Piece one, we were public from day one.
Two is the importanceof, of relationships.
We grew the bank you know, reallyat a very high level, high rate
for the first number of years,but that was lesson number two.
If it grows like a weed, it's a weed.
And so we ended up again, to the pointwhere in May of 2008, and I'll come
(03:27):
back to maybe a part of my progressionthrough the organization in May of 2008.
Our, our newly appointed CEO, MikeCahill gave me the opportunity
to become Chief Lending Officer.
And so the timing was perfect in Mayof oh eight, where we had loan quality
issues starting to rise to the surface.
There followed a liquiditycrisis, the great recession.
(03:48):
Our bank at that time enteredinto a written agreement, formal
enforcement action with thefederal reserve Bank of Chicago.
And so that was a very tumultuoustime, as you can imagine,
working through that issue.
On the back end of it we put a new plantogether, we turned the bank around
and we ended the bank with the threebest years of profitability, and that's
(04:10):
where we were able to successfullysell the bank to Old National.
So the, the pieces along the wayI had the opportunity early on
in the, in the existence of thebank was to start private banking.
And that was where I caught my firstentrepreneurial bug, if you will.
And that's what led me to Sonataultimately group private banking.
And then progression, asI said, is stepped into my
(04:30):
first, first C level position.
Second was the importance of havinga good fundamental strategic plan.
That led us to, to turn the bank around.
And then finally reallylearned the importance of
focusing on shareholder return.
And I can, I can speak about theimportance of constituents to
shareholders being an important one.
As I said, the last three years turnedout to be a great turnaround story.
(04:54):
And so it ended well.
But along the way there were somesleepless nights and some times of stress.
Evan Sparks (05:00):
Could tell me a little bit more about Sonata Bank
and what was the vision for this?
You know, obviously Nashville's avery hot market middle Tennessee's
very, very fast growing.
What was the vision for thisbank and and the time and the
environment in which you started it?
In which, in which the teamthat, that started it began it.
Wendell Bontrager (05:19):
The story for Sonata started with Farzin Ferdowsi.
Farzin was our foundingchairman and key fundraiser.
It was Farzin's Vision to have afinancial institution that could
provide benefit to franchiserestaurant operators throughout the us.
To help lower turnover, which is avery major issue in that industry.
He is a successful Taco Bell franchisee.
(05:42):
He and his partner own approximately ahundred locations in multiple states, and
so turnover is an acute issue for them.
So the vision was let's create a bankthat can employ or bring in and integrate
creative employee benefits with bankingsolution so that at the end of the day,
we as a bank can go to the franchisee.
(06:02):
Offer them the ability to provide benefitsin a way that's very affordable and
in a method that's not traditionallythat affordable for them to provide.
So on the side, the franchiserestaurants, as you can imagine,
have a lot of part-time employees,a lot of younger employees.
They need to keep their costs down sowe can come in at fractional costs to
provide them things like telehealthmobile phone insurance, pet insurance,
(06:25):
believe it or not, is important ina way that is free to the employee.
But is done and, and soldthrough the franchisee.
So that was the vision of the bank.
And lemme, lemme stop there.
I can certainly give you moreof the, more of the story, but
Evan Sparks (06:40):
I love the story of banks that find unique niches in
our, you know, this massive, diverseeconomy that we have, being able to
to identify opportunities like that.
What is the do you know when you, whenyou're providing these services to the
employees of the, of these your franchiseeclients are, are, do you provide that
directly through the bank or do you havea subsidiary or affiliate who kind of is
(07:00):
responsible for actually providing thesebenefits, benefit management services?
Wendell Bontrager (07:05):
It is part of the bank.
So right now, it's a B2B2C sale, right?
So we developed a relationship with thefranchisee and ultimately the franchisees
are the ones that pay the monthlysubscription fee to the bank to provide
the service to their, to their employees.
So that's kind of ourapproach to the marketplace.
Let me add one more step to the, thevision that Farin had when we went
(07:28):
through the initial capital raise.
We raised our monies and, and about 60%of our shareholders are franchisees,
coast to coast, and we have some of thelargest franchisees that are part of
our universe and part of our ecosystem.
So we have a captive audience ofcustomers that we're pursuing and we're
just in the rollout phase right now.
We rolled out the beta test as recentas last week to get it introduced to
(07:51):
the marketplace, but that's, that'sour approach to the market is directly
through the franchisee himself.
Evan Sparks (07:56):
Oh, that's, that's fascinating.
So I mean, so that's a, you know,seems like a pretty significant
fee income play for the bank.
What's the, what's your bank'sba mix of interest income versus,
versus non-interest income?
Wendell Bontrager (08:10):
Right now the interest income, because our build
so far has really been on thetraditional bank balance sheet.
Mm-hmm.
It's about 90% of the traditionalinterest income compared to fee income.
As we envision this rolling out inthe next few years with this being our
SaaS model we believe that part of thefranchise build and the, and the overall
company's valuation is very beneficialby, by developing the SaaS revenue.
(08:32):
And we anticipate that about30 to 40% of our revenues.
Come from this app.
Evan Sparks (08:38):
It'll be neat to see that model develop.
I am gonna take a quick moment hereto thank our sponsor for this episode.
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The platform offers end-to-end coverage ofloan origination, including risk analytics
tools and configurable customer journeys.
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(09:00):
Learn more about how the platformcan help banks achieve faster
processing, lower overall costs, andincrease loan volume@biztwox.com.
And thanks again for to Biz2Xfor sponsoring this episode.
And now back to the conversation.
I'm curious, the franchise business is,you know, complex in that it's you've
(09:21):
got lots of these part-time employees.
You've got, you know,crazy operating hours.
You've got, you know you'remanaging supply stuff.
You're managing the relationshipwith the, with the national brand.
What is the what are some of the creditneeds that these franchise owners
have, and how are, and how do thosediffer from other business clients
that banks might be familiar with?
Wendell Bontrager (09:43):
That's a great question and, and I think there is a complementary
business line that we are offering.
So one of the unique value propsor, or things about Sonata that's
different than a i, I call it atraditional community bank, is we
are a bank for Middle Tennessee.
We're based in Williamson County.
However, I. We are also pursuing franchiserestaurant business on a national basis.
(10:03):
Yeah.
So that is a niche that we'rereally pursuing nationally.
So, to, to answer your question onthe credit needs, it really is in the
way of, of development facilities.
So they're, as they're expanding to newlocations, the development facilities
would include real, real estate financing,equipment, financing you know, and
the, and the related needs there.
Then from a treasury standpoint,one of the things that I felt was
(10:25):
important when we built the bank wasto have a robust treasury platform.
And we have one in place now that wefeel we can compete against really any
bank in the country, and we can bank apractice regardless of where they are.
In fact, one of our current clientsis based in the state of Ohio, and
they're, they're developing a new brand.
Happens to be also oneof our shareholders.
(10:46):
They're developing a new brand, so weare banking each of their locations in
Ohio being here in Williamson County.
Evan Sparks (10:54):
The and what, what, and so, you know, you've got, so
you've got this restaurant, the, the,this kind of unique suite of really
resources for platform, solutionsfor the re the restaurant owners.
And then how, what, and then how bigcompared to that line of business is the
rest of your community bank business inmiddle Tennessee and western Kentucky.
Wendell Bontrager (11:15):
Right now that franchise business is about
30% of our book, and, and thebalance is middle Tennessee.
Evan Sparks (11:23):
Since one of your founders is involved with this as a, as a franchise
owner, do you, and you have so muchyou know, so much of your shares are
owned by the, by these franchise owners,how do you bring in franchisee talent
into your organization to help you youknow, do the, do the lending and do
the administration of these programs.
How do you find the right talent tomanage this kind of unique niche?
Wendell Bontrager (11:47):
You know, believe it or not, the the needs for the
franchisee is similar to what itis in a regular C&I portfolio or
commercial real estate portfolio.
So the talent is actually the same.
We, the relationship managers thatwe have that handle some of our
relationships in Middle Tennesseeare the same ones that can handle the
franchisees when the requests come in.
And that's the nice partabout the model is, excuse me.
(12:12):
The, the, the systemsthat we have in place.
So we're, we're a JackHenry Silverlake Bank.
Once you build a system, you canbank a local customer or a customer
that's based in, in Nevada, right?
That doesn't matter.
And then the talent isvery similar as well.
So even though the approach isdifferent, there's not a need for unique
talent to service that client base.
Evan Sparks (12:35):
I, this is, this is really fascinating.
I'd love to zoom out a littlebit and to, to look at your area.
What are you seeing in terms of markettrends and you know, economic trends
in the greater Nashville area andwhat, you know, how can how, how are
things going in your local market?
Wendell Bontrager (12:52):
The, the local market overall remains very strong.
So having come from Northeast Indiana toKansas and then now in Middle Tennessee,
the market here is very different.
It's one of the hottest marketsin the US and it remains that way.
for the year 2024 fiscal year wehave achieved in the way of asset
growth, we're number one in thestate of Tennessee, and number four
(13:14):
nationally in our asset growth rate.
And so we're very proud of that metric.
And then just two weeks ago, weidentified as being the number one
Nashville bank in deposit growth.
And that was by, we almost grew ahundred percent in deposits last year,
which is a challenge for all banks.
But we were very proudof that stat as well.
So we, we've been able to achieve,you know some early success building
(13:38):
our Middle Tennessee presence.
Having said that, over the past fewmonths, we've seen a slight softening
in the construction business.
The housing market has, hasslowed down a little bit.
I wouldn't say it's it's softyet, but it's really softening.
But I would tell you that the, the metricsare still, overall, overall pretty strong.
(13:59):
And the nice part is about our balancesheet in us being in the build phase,
we don't have the same repricing riskthat a lot of legacy portfolios have.
So we're building ourportfolio from zero up.
And so because of that, that'sbeen a, a really good you know,
kind of a blessing for us.
'cause we're not seeing thesame issues that some legacy
banks have been experiencing.
Evan Sparks (14:18):
And you know, Nashville's obviously got a,
got a lot of banks present.
What's your take on the Nashvillemarket for banking talent in terms
of the kind of people you can,you can attract to your bank?
Wendell Bontrager (14:27):
Well, it, you know, it is it's been a very strong market,
clearly for talent, and I would tellyou that from our, our leadership team
that we've been building, they've hadrelationships with other bankers, so
they've been up able to attract localtalent from a relationship standpoint.
One thing that's unique about Sonatais we have a hybrid work environment.
We also have some remote workers.
(14:47):
So now have we been able to tracktalent when hiring a remote worker.
You expand your talent pool in avast way, and we've been able to get
some really experienced, seasonedveterans on our, on our slate and our
team to play different roles, whichhas been really key for our success.
Evan Sparks (15:04):
Yeah.
What's your mix of and now what's yourmix of remote to in office for people?
Wendell Bontrager (15:11):
We've got, let's see, six.
We've got about 16% of our workforceis remote and then the balance
are in the middle Tennessee area.
Evan Sparks (15:20):
How are you balancing those two workforces and ensuring that you kind
of get a, get the best of both worlds interms of the team cohesion and the you
know, the high level of talent that you,that you want to execute the strategy?
How does that balancework for Sonata Bank?
Wendell Bontrager (15:36):
You know, that's, that's an ongoing, that's an ongoing
challenge I think for many, but theway we've been able to achieve it, I
think having the hybrid work workplacehas been a strategic advantage for us.
We're one of the only banks inMiddle Tennessee that offered that.
So there, that has been a keyhiring plus for us as we talk to
candidates to, to join forces.
(15:57):
Then on top of that right now we're gonnabe engaged in a process to hire a CFO.
And I think the attraction to cometo Nashville if you're gonna relocate
by chance, and it's not somebody herelocal, coming to Nashville, Tennessee,
or Brentwood, Tennessee comparedto some other markets, I think is,
is very, very appealing as well.
And I think overall the culturewe built is really to be employee
(16:20):
first really focused on building avery positive work, work culture.
Evan Sparks (16:25):
This was, this was a really, really great conversation.
I really enjoyed learningmore about Sonata Bank.
Thanks Wendell.
Thank you so much forbeing on the show today.
Wendell Bontrager (16:34):
Alright, thanks Evan.
Appreciate the opportunity.
Evan Sparks (16:37):
For our listeners, you can find this in previous episodes
at aba.com/banking journal podcast.
We're also on all of your favoritepodcast apps or platforms.
Thanks to Biz2X forsponsoring this episode.
Thanks so much for listening, andwe'll be back with you again very soon.
So one of the things about Sonata that's different than
a a traditional community bank, iswe are a bank for Middle Tennessee.
We're based in Williamson County,however, we are also pursuing franchise
restaurant business on a national basis.
So that is a niche that we'rereally pursuing nationally.
Evan Sparks (00:18):
From the American Bankers Association, this is the
A BA Banking Journal podcast.
Today's episode is presented by Biz2X.
Welcome back.
I'm Evan Sparks, and I'm delightedto have on the show today, Wendell
Bontrager, who is the newly appointedpresident and CEO of Sonata Bank
in the Nashville, Tennessee area.
Sonata is a relatively new bank in that,in that very fast-growing geography,
(00:40):
fast-growing local economy, and sodelighted to have you on to talk a
little bit more about the bank andwhat's going on in middle Tennessee.
So Wendell, thanks for being on the show.
Wendell Bontrager (00:51):
Well, Evan, thank you for inviting me.
It's great to be here.
Evan Sparks (00:54):
So I'd love it if you could give me, just kinda give our listeners
a quick overview of your journey inbanking where, you know, how did you
get into the industry and what haveyou, what, what, where has your career
path in this industry taken you so far?
Wendell Bontrager (01:08):
Absolutely.
So I'm a native of Indiana.
Born and raised in a small town,and my banking career started with
National Bank of Detroit, which isnow part of the Chase franchise.
I was started in the commercial credittraining program spent two years there
and that was in Elkhart, Indiana.
After becoming a commercial banker,made the move to Fort Wayne, Indiana.
(01:29):
And after a couple years with NBD,I got involved in my first bank
startup, which was Tower Bank andTrust Company based in Fort Wayne.
That was 1999.
Jump ahead 15 years.
I could write a book on my experienceat Tower Bank, everything you
should and should not do in banking.
But in any event, after that15 year period, I was part of
our, our leadership team there.
(01:50):
We sold the the bank to Old National.
After a couple years with OldNational, I was recruited to become
president and a board member ofEquity Bank in Wichita, Kansas.
So we moved out to Wichita, my wifeand I did, and then after a few years
there, moved to Middle Tennessee andthat was when I was introduced to
the team that was forming Sonata Bankand decided to join forces with with
(02:14):
our co-founder and founding chairman.
Evan Sparks (02:18):
I definitely wanna learn more about Sonata Bank, but
you intrigued me with the lessonsfrom the Tower Bank, your experience
with Tower Bank up in Fort Wayne.
What are some of the highlightsin terms of things you learned
going through a bank startup?
You know, things that you, that workedreally well, things you'd you give people
advice about, about, we don't have a lotof bank de Novos these days, and so it's
nice to get a little perspective fromsomebody who's been through, been, been,
(02:41):
been in multiple de novo environments.
Wendell Bontrager (02:45):
You bet.
So I'll give you the highlights of Tower.
First of all, we, it was thetruest sense of a community bank.
Timing was good and we,we did crowdfunding before
crowdfunding was a thing.
And I say that because when we,when we sold stock, we allowed
shareholders to invest as little as $10.
So we had shareholder that had asingle share all the up to some
(03:06):
major shareholders that was.
Piece one, we were public from day one.
Two is the importanceof, of relationships.
We grew the bank you know, reallyat a very high level, high rate
for the first number of years,but that was lesson number two.
If it grows like a weed, it's a weed.
And so we ended up again, to the pointwhere in May of 2008, and I'll come
(03:27):
back to maybe a part of my progressionthrough the organization in May of 2008.
Our, our newly appointed CEO, MikeCahill gave me the opportunity
to become Chief Lending Officer.
And so the timing was perfect in Mayof oh eight, where we had loan quality
issues starting to rise to the surface.
There followed a liquiditycrisis, the great recession.
(03:48):
Our bank at that time enteredinto a written agreement, formal
enforcement action with thefederal reserve Bank of Chicago.
And so that was a very tumultuoustime, as you can imagine,
working through that issue.
On the back end of it we put a new plantogether, we turned the bank around
and we ended the bank with the threebest years of profitability, and that's
(04:10):
where we were able to successfullysell the bank to Old National.
So the, the pieces along the wayI had the opportunity early on
in the, in the existence of thebank was to start private banking.
And that was where I caught my firstentrepreneurial bug, if you will.
And that's what led me to Sonataultimately group private banking.
And then progression, asI said, is stepped into my
(04:30):
first, first C level position.
Second was the importance of havinga good fundamental strategic plan.
That led us to, to turn the bank around.
And then finally reallylearned the importance of
focusing on shareholder return.
And I can, I can speak about theimportance of constituents to
shareholders being an important one.
As I said, the last three years turnedout to be a great turnaround story.
(04:54):
And so it ended well.
But along the way there were somesleepless nights and some times of stress.
Evan Sparks (05:00):
Could tell me a little bit more about Sonata Bank
and what was the vision for this?
You know, obviously Nashville's avery hot market middle Tennessee's
very, very fast growing.
What was the vision for thisbank and and the time and the
environment in which you started it?
In which, in which the teamthat, that started it began it.
Wendell Bontrager (05:19):
The story for Sonata started with Farzin Ferdowsi.
Farzin was our foundingchairman and key fundraiser.
It was Farzin's Vision to have afinancial institution that could
provide benefit to franchiserestaurant operators throughout the us.
To help lower turnover, which is avery major issue in that industry.
He is a successful Taco Bell franchisee.
(05:42):
He and his partner own approximately ahundred locations in multiple states, and
so turnover is an acute issue for them.
So the vision was let's create a bankthat can employ or bring in and integrate
creative employee benefits with bankingsolution so that at the end of the day,
we as a bank can go to the franchisee.
(06:02):
Offer them the ability to provide benefitsin a way that's very affordable and
in a method that's not traditionallythat affordable for them to provide.
So on the side, the franchiserestaurants, as you can imagine,
have a lot of part-time employees,a lot of younger employees.
They need to keep their costs down sowe can come in at fractional costs to
provide them things like telehealthmobile phone insurance, pet insurance,
(06:25):
believe it or not, is important ina way that is free to the employee.
But is done and, and soldthrough the franchisee.
So that was the vision of the bank.
And lemme, lemme stop there.
I can certainly give you moreof the, more of the story, but
Evan Sparks (06:40):
I love the story of banks that find unique niches in
our, you know, this massive, diverseeconomy that we have, being able to
to identify opportunities like that.
What is the do you know when you, whenyou're providing these services to the
employees of the, of these your franchiseeclients are, are, do you provide that
directly through the bank or do you havea subsidiary or affiliate who kind of is
(07:00):
responsible for actually providing thesebenefits, benefit management services?
Wendell Bontrager (07:05):
It is part of the bank.
So right now, it's a B2B2C sale, right?
So we developed a relationship with thefranchisee and ultimately the franchisees
are the ones that pay the monthlysubscription fee to the bank to provide
the service to their, to their employees.
So that's kind of ourapproach to the marketplace.
Let me add one more step to the, thevision that Farin had when we went
(07:28):
through the initial capital raise.
We raised our monies and, and about 60%of our shareholders are franchisees,
coast to coast, and we have some of thelargest franchisees that are part of
our universe and part of our ecosystem.
So we have a captive audience ofcustomers that we're pursuing and we're
just in the rollout phase right now.
We rolled out the beta test as recentas last week to get it introduced to
(07:51):
the marketplace, but that's, that'sour approach to the market is directly
through the franchisee himself.
Evan Sparks (07:56):
Oh, that's, that's fascinating.
So I mean, so that's a, you know,seems like a pretty significant
fee income play for the bank.
What's the, what's your bank'sba mix of interest income versus,
versus non-interest income?
Wendell Bontrager (08:10):
Right now the interest income, because our build
so far has really been on thetraditional bank balance sheet.
Mm-hmm.
It's about 90% of the traditionalinterest income compared to fee income.
As we envision this rolling out inthe next few years with this being our
SaaS model we believe that part of thefranchise build and the, and the overall
company's valuation is very beneficialby, by developing the SaaS revenue.
(08:32):
And we anticipate that about30 to 40% of our revenues.
Come from this app.
Evan Sparks (08:38):
It'll be neat to see that model develop.
I am gonna take a quick moment hereto thank our sponsor for this episode.
Are you ready to boost your bank'slending operational Efficiency?
Biz2X is here to help.
The platform offers end-to-end coverage ofloan origination, including risk analytics
tools and configurable customer journeys.
Capture lending revenue with quickand informed decisions run at scale.
Manage risk with Biz2X.
(09:00):
Learn more about how the platformcan help banks achieve faster
processing, lower overall costs, andincrease loan volume@biztwox.com.
And thanks again for to Biz2Xfor sponsoring this episode.
And now back to the conversation.
I'm curious, the franchise business is,you know, complex in that it's you've
(09:21):
got lots of these part-time employees.
You've got, you know,crazy operating hours.
You've got, you know you'remanaging supply stuff.
You're managing the relationshipwith the, with the national brand.
What is the what are some of the creditneeds that these franchise owners
have, and how are, and how do thosediffer from other business clients
that banks might be familiar with?
Wendell Bontrager (09:43):
That's a great question and, and I think there is a complementary
business line that we are offering.
So one of the unique value propsor, or things about Sonata that's
different than a i, I call it atraditional community bank, is we
are a bank for Middle Tennessee.
We're based in Williamson County.
However, I. We are also pursuing franchiserestaurant business on a national basis.
(10:03):
Yeah.
So that is a niche that we'rereally pursuing nationally.
So, to, to answer your question onthe credit needs, it really is in the
way of, of development facilities.
So they're, as they're expanding to newlocations, the development facilities
would include real, real estate financing,equipment, financing you know, and
the, and the related needs there.
Then from a treasury standpoint,one of the things that I felt was
(10:25):
important when we built the bank wasto have a robust treasury platform.
And we have one in place now that wefeel we can compete against really any
bank in the country, and we can bank apractice regardless of where they are.
In fact, one of our current clientsis based in the state of Ohio, and
they're, they're developing a new brand.
Happens to be also oneof our shareholders.
(10:46):
They're developing a new brand, so weare banking each of their locations in
Ohio being here in Williamson County.
Evan Sparks (10:54):
The and what, what, and so, you know, you've got, so
you've got this restaurant, the, the,this kind of unique suite of really
resources for platform, solutionsfor the re the restaurant owners.
And then how, what, and then how bigcompared to that line of business is the
rest of your community bank business inmiddle Tennessee and western Kentucky.
Wendell Bontrager (11:15):
Right now that franchise business is about
30% of our book, and, and thebalance is middle Tennessee.
Evan Sparks (11:23):
Since one of your founders is involved with this as a, as a franchise
owner, do you, and you have so muchyou know, so much of your shares are
owned by the, by these franchise owners,how do you bring in franchisee talent
into your organization to help you youknow, do the, do the lending and do
the administration of these programs.
How do you find the right talent tomanage this kind of unique niche?
Wendell Bontrager (11:47):
You know, believe it or not, the the needs for the
franchisee is similar to what itis in a regular C&I portfolio or
commercial real estate portfolio.
So the talent is actually the same.
We, the relationship managers thatwe have that handle some of our
relationships in Middle Tennesseeare the same ones that can handle the
franchisees when the requests come in.
And that's the nice partabout the model is, excuse me.
(12:12):
The, the, the systemsthat we have in place.
So we're, we're a JackHenry Silverlake Bank.
Once you build a system, you canbank a local customer or a customer
that's based in, in Nevada, right?
That doesn't matter.
And then the talent isvery similar as well.
So even though the approach isdifferent, there's not a need for unique
talent to service that client base.
Evan Sparks (12:35):
I, this is, this is really fascinating.
I'd love to zoom out a littlebit and to, to look at your area.
What are you seeing in terms of markettrends and you know, economic trends
in the greater Nashville area andwhat, you know, how can how, how are
things going in your local market?
Wendell Bontrager (12:52):
The, the local market overall remains very strong.
So having come from Northeast Indiana toKansas and then now in Middle Tennessee,
the market here is very different.
It's one of the hottest marketsin the US and it remains that way.
for the year 2024 fiscal year wehave achieved in the way of asset
growth, we're number one in thestate of Tennessee, and number four
(13:14):
nationally in our asset growth rate.
And so we're very proud of that metric.
And then just two weeks ago, weidentified as being the number one
Nashville bank in deposit growth.
And that was by, we almost grew ahundred percent in deposits last year,
which is a challenge for all banks.
But we were very proudof that stat as well.
So we, we've been able to achieve,you know some early success building
(13:38):
our Middle Tennessee presence.
Having said that, over the past fewmonths, we've seen a slight softening
in the construction business.
The housing market has, hasslowed down a little bit.
I wouldn't say it's it's softyet, but it's really softening.
But I would tell you that the, the metricsare still, overall, overall pretty strong.
(13:59):
And the nice part is about our balancesheet in us being in the build phase,
we don't have the same repricing riskthat a lot of legacy portfolios have.
So we're building ourportfolio from zero up.
And so because of that, that'sbeen a, a really good you know,
kind of a blessing for us.
'cause we're not seeing thesame issues that some legacy
banks have been experiencing.
Evan Sparks (14:18):
And you know, Nashville's obviously got a,
got a lot of banks present.
What's your take on the Nashvillemarket for banking talent in terms
of the kind of people you can,you can attract to your bank?
Wendell Bontrager (14:27):
Well, it, you know, it is it's been a very strong market,
clearly for talent, and I would tellyou that from our, our leadership team
that we've been building, they've hadrelationships with other bankers, so
they've been up able to attract localtalent from a relationship standpoint.
One thing that's unique about Sonatais we have a hybrid work environment.
We also have some remote workers.
(14:47):
So now have we been able to tracktalent when hiring a remote worker.
You expand your talent pool in avast way, and we've been able to get
some really experienced, seasonedveterans on our, on our slate and our
team to play different roles, whichhas been really key for our success.
Evan Sparks (15:04):
Yeah.
What's your mix of and now what's yourmix of remote to in office for people?
Wendell Bontrager (15:11):
We've got, let's see, six.
We've got about 16% of our workforceis remote and then the balance
are in the middle Tennessee area.
Evan Sparks (15:20):
How are you balancing those two workforces and ensuring that you kind
of get a, get the best of both worlds interms of the team cohesion and the you
know, the high level of talent that you,that you want to execute the strategy?
How does that balancework for Sonata Bank?
Wendell Bontrager (15:36):
You know, that's, that's an ongoing, that's an ongoing
challenge I think for many, but theway we've been able to achieve it, I
think having the hybrid work workplacehas been a strategic advantage for us.
We're one of the only banks inMiddle Tennessee that offered that.
So there, that has been a keyhiring plus for us as we talk to
candidates to, to join forces.
(15:57):
Then on top of that right now we're gonnabe engaged in a process to hire a CFO.
And I think the attraction to cometo Nashville if you're gonna relocate
by chance, and it's not somebody herelocal, coming to Nashville, Tennessee,
or Brentwood, Tennessee comparedto some other markets, I think is,
is very, very appealing as well.
And I think overall the culturewe built is really to be employee
(16:20):
first really focused on building avery positive work, work culture.
Evan Sparks (16:25):
This was, this was a really, really great conversation.
I really enjoyed learningmore about Sonata Bank.
Thanks Wendell.
Thank you so much forbeing on the show today.
Wendell Bontrager (16:34):
Alright, thanks Evan.
Appreciate the opportunity.
Evan Sparks (16:37):
For our listeners, you can find this in previous episodes
at aba.com/banking journal podcast.
We're also on all of your favoritepodcast apps or platforms.
Thanks to Biz2X forsponsoring this episode.
Thanks so much for listening, andwe'll be back with you again very soon.
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