* Net income $46.7 million
* EPS $0.37 vs. $0.48 a year ago
* Recorded $45 mln pretax charge because of settlement
(Adds details on private client group, RJ Bank results)
By Joe Rauch
CHARLOTTE, N.C., July 20 Raymond James
Financial Inc (RJF.N) reported a 23 percent decrease in fiscal
third-quarter net income on Wednesday as gains in its wealth
management and banking units were hampered by a $45 million
auction rate securities settlement charge.
The St. Petersburg, Florida-based investment bank and
brokerage reported net income of $46.7 million, or 37 cents per
share, down from $60.6 million, or 48 cents per share, a year
Analysts projected that Raymond James would earn 33 cents
per share, according to Thomson Reuters I/B/E/S. Excluding the
one-time charge, Raymond James reported net income of $74.8
million, or 59 cents per share.
Net revenue rose 14 percent to $850 million from $747
million a year ago.
Raymond James' private client group -- its wealth
management unit -- was the largest contributor to the third
The private client group posted a 19 percent increase in
pretax income to $53.3 million from $44.7 million a year prior,
and was the largest contributor to the company's earnings.
Raymond James said it recorded a quarterly record for
assets under management, which totaled $36.6 billion.
RJ Bank, the company's bank subsidiary, also reported lower
levels of credit losses, boosting its pretax income.
RJ Bank posted a 44 percent spike in pretax income to $42
million, from $29 million. A year ago, the bank's real
estate-related loan losses were a drag on the company's overall
In the third quarter, RJ Bank's reserved $8.3 million for
possible loan losses versus $17 million a year ago.
Overall, the lower quarterly net income stemmed from an
agreement announced on June 29 between Raymond James, the U.S.
Securities and Exchange Commission and seven U.S. states.
The settlement resolved charges that Raymond James misled
investors about the safety of auction rate securities. The
company agreed to repurchase $300 million in auction rate
securities and pay a $1.75 million fine.
At the time, the investment bank expected to record a $50
million charge in the quarter due to the accord.
Shares closed up 2.39 percent, or 76 cents, at $32.52 on
the New York Stock Exchange.
(Editing by Robert MacMillan, Bernard Orr)