Net Summary

In the frenetic, financier-eat-financier world of high finance, D.A. Davidson & Co. has survived with a more cautious approach.

The 75-year-old regional brokerage firm boasts being the last of its kind in a 17-state region covering much of northwestern quadrant of the country. While similar-sized firms have been snatched up in recent decades, Davidson has nibbled here and there, adding in smaller chunks.

The brokerage entered the Rogue Valley market last September and the company's chairman and chief executive, Ian Davidson was in town Tuesday to visit the company's new east Medford office on Hillcrest Park Drive.

As Davidson looks around the industry's landscape, he points to one-time regional firm, A.G. Edwards, that was swallowed first by Wachovia and then by Wells Fargo.

"We don't have thousands of employees, we have 1,100 employees (in 70 offices)," says Davidson, "We're appealing because people want to deal with a smaller. more efficient firm."

As he spoke from his Great Falls, Mont., office on Monday, Davidson alluded to four flower bouquets on his desk.

"We like to recognize every one of the employees on their birthdays," he said. "Culture is something hard to define, but it's something you know — good or bad — if you're in it."

Long before Medford Branch Manager Bob Hutchins aligned with Davidson & Co., he heard from other consultants about the company's culture.

"They were spoken generalities, but obviously it was an important aspect of their life," Hutchins said. "It's important to Ian to view everyone as partners in the firm."

Even with recent acquisitions, the average employee tenure at his company is 12 years, Davidson said. "In Chicago, New York, Seattle and San Francisco, (firms) have a tendency to steal people from each other."

More than a half-century ago, Davidson was hired as the company's third employee. At the time, the firm had capital of $35,000; that now has grown to $135 million.

"We've done it the conservative way and haven't taken a lot of chances," the company's second-generation leader said.

Hutchins points out the company's name hasn't changed in 58 years — something unique in the financial world of routine mergers and acquisitions.

Wall Street's recent upheavals made Davidson & Co. particularly attractive to local financial veterans at companies such as Smith Barney and UBS, who make up much of the Medford staff.

"It's employee-owned and has virtually no debt, representative of the conservative way its affairs are managed," Hutchins said. "... With private ownership they can make long-term decisions, understanding it penalizes short-term results. They don't have to respond to New York society's quarterly analysts' meetings, which puts them in a unique position."

One of the company's major milestones was acquisition of Jensen Securities in 1998, a Lake Oswego institutional research, trading and sales firm that allowed Davidson to extend into equity capital markets as it buys large blocks of stock for investors. Another significant addition came in 2005 when the company bought Kirkpatrick Pettis companies of Omaha, Neb., providing inroads to selling municipal bonds.

Davidson explained the company now has the capability of selling bonds for a regional airport such as Medford.

"We could sell improvement bonds for reasonably small projects," he said. "To you and I, $5 million is huge, to (an investor such as) Prudential Insurance it's not."

As of last Friday, the company was handling just more than 150,000 accounts. Davidson estimated the company has about 90,000 customers with many holding multiple accounts.

D.A. Davidson has not been ignored in the merger and takeover feeding frenzy. Suitors have lined up and been turned away more than once.

"The temptation is an immediate payout to the principals," Davidson said. "But that's not something that's appealing to us. One time, 15 or 20 years ago, Kemper Securities offered 31/2; times book, which would have tripled our value at the time. I talked to a very influential securities industry analyst and he told me you will have 31/2; times book in another five years. He said forget it. When you are acquired you lose all control."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.