CEO keeps brokerage afloat in stormy economic seas

Coleman "Coley" Wortham III has his initials, CW III, embroidered on the pockets of his dress shirts. That's about as buttoned down as he gets.

Not into flash or style, and admittedly not athletic like the rest of his family, Wortham is the tell-it-like-it-is person behind Davenport & Co., the only remaining independent regional brokerage based in Richmond.

"Everything is not for sale," Wortham, 63, said. "I've watched a lot of firms go out of business for all kinds of reasons -- mostly they sell out for money."

Some regional brokerages were merged with national firms to gain technological advantage. Spending money on technology hasn't stopped Davenport, he said.

"We use the same basic [computer] system as Wachovia Securities," which was merged with A.G. Edwards and is now Wells Fargo Advisors, the second-largest brokerage in the country.

"I can't find anything we don't have that we would like to have."

When Wortham was given the job as president in 1986, he recalled that he was told by the chairman to do two things.

"Don't screw it up. And make it grow."

"He's done a fine job," said Henry L. Valentine II, chairman of Davenport.

"Not many midsize regional firms are still in the business. A lot of bigger ones have disappeared. The fact that we are alive and well speaks volumes about what Coley has done as our leader," Valentine said.

"He's done it all, from sweeping the floors to running the operations to being successful on the sales side."

. . .

Davenport is a full-service investment firm, offering individual portfolio and wealth management as well as public financing, advising county and city authorities, including Richmond.

It was founded in Richmond in 1863 by Isaac Davenport Jr. and Charles E. Wortham, the great-uncle to the current president and CEO. Wortham's grandfather, Coleman Wortham Sr., became president in 1921 and purchased a seat on the New York Stock Exchange.

His father, a partner in the firm, died in 1963, six years before Wortham started at the company as a salesman. The company employed about 50 people in 1969.

Today, it employs 450 people, including 193 advisers, at 12 locations in Virginia and three in North Carolina. Only within the past couple of years has it brought in revenues of more than $100 million.

"We don't have any design to be the biggest anything," Wortham said. "We continue to grow internally and externally."

His family connections to the firm didn't play into Wortham's move from salesman to head of operations and eventually to president and CEO, he said.

"I walked in the door with nothing. No one gave me a thing."

He recalled his first years as a broker and his move into management. "I stumbled around for three or four years. I was a horrible salesman."

In the fall of 1975, the company was looking for someone to run the back-office operations. "I went to the board of directors and told them there was no reason to hire an accountant to run the brokerage business."

Wortham assured the board that he could do the job. "I wouldn't have given me the job they gave me."

As the new head of operations, Wortham had to call an outside accountant to file his first regulatory reports. He took accounting courses at Virginia Commonwealth University to catch up.

"I'm a big fan of the underdog," Wortham said.

Eventually, he would learn how everything worked at the company. "I can't stand not understanding something," Wortham said.

When he was named president at age 40, he was told he was already running everything so he might as well be given the title. He became the CEO in 1992.

"He is blessed with a good mind and a wonderful sense of humor," said S. Buford Scott, chairman of Scott & Stringfellow Inc., a brokerage in Richmond that is now part of BB&T Corp.

"While we have been competitors for these many years, we have always been friendly competitors."

Scott said Wortham is a hands-on manager. "He likes to call the shots."

Wortham said his job is to make sure Davenport is here next year, just as it has been for nearly a century and a half.

The firm has plenty of capital to get through the economic downturn, he said.

"I have never seen anything in my 40 years that has felt this bad," said Wortham, referring to the recession and the stock market, which is coming off its worst year in decades.

"The economic times aren't great, but a lot of companies are still making money. And 90 percent of people are still going to work."

Wortham said he doesn't spend a lot of time thinking about yesterday. "I am not an historian."

Yet when the technology bubble burst in 2001, Davenport was not invested in tech stocks, so its investments weren't hurt, he said.

With this market, "it's like someone pulled the stopper out of the bathtub. All the toys sunk to the bottom of the tub."

Davenport isn't leveraged like some investment companies. "When a company is leveraged as much as 50-to-1, it doesn't take much of a crack to bring it down," Wortham said.

"Our [debt to equity] leverage on the worst day is three-to-one. We have never asked for any TARP [Troubled Asset Relief Program] money. We don't want any TARP money."

The 100 percent employee-owned company is conservative, he said. Brokers don't offer any investment options that they don't invest in themselves.

Plus, "we don't own any corporate jets and we don't have any skyboxes in Yankee Stadium," he said.

. . .

Kathleen Holman, chief administrative officer, said working for Wortham is like getting a performance review every day.

"You always know where you stand," she said.

Leslie G. Wyatt, president and CEO of Children's Hospital of Richmond, recalled a letter that Wortham sent to clients stating that the company would stay focused, remain manageable in size and always do what's fair and right for its clients.

The same could be said for what Wortham, a longtime hospital supporter and board member, does for the hospital.

"He always does what is fair and right for patient and employees," she said.

"He's astute, quick to see the big picture -- always supportive and encouraging, but he will challenge and push you to think from a different perspective."

Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.

Coleman 'Coley' Wortham III