* 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 (Reuters) - 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 ago.
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 quarter profit.
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 earnings.
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. [ID:nN1E75S1BF]
Shares closed up 2.39 percent, or 76 cents, at $32.52 on the New York Stock Exchange. (Editing by Robert MacMillan, Bernard Orr)