Citigroup's fourth quarter earnings fell short of Wall Street's expectations as the bank's legal expenses rose and it released less money from its loan-loss reserves. The bank, based in New York, said a big chunk of the legal expenses came from a settlement reached last week over illegal foreclosure practices in the aftermath of the housing bust. Citi earned $1.16 billion after paying preferred dividends, or 38 cents per share, in the three months ended Dec. 31. That compares with $933 million, or 31 cents per share, in the same period a year earlier. Excluding one-time costs related to restructuring and accounting for outstanding debt, the bank earned 69 cents per share. That's well below the 97 cents per share analysts polled by FactSet were expecting. Revenue rose to $18.7 billion, up 8% from the same period a year earlier and slightly below forecasts. The bank had $1.3 billion in legal and related expenses in the quarter. A big part of the legal expense was a settlement with federal regulators announced last week related to Citigroup's foreclosure practices. The bank allegedly took part in industry-wide practices that caused people to be foreclosed on illegally. It took a charge of $305 million in the quarter to cover its agreement with the Office of the Comptroller of the Currency and the Federal Reserve. The higher legal expenses also included various U.S. consumer-related litigation that the bank did not immediately specify. Citigroup also released less money from its rainy-day fund to cover souring loans—$86 million, compared with $1.47 billion a year earlier. Citi's stock fell 94 cents, or 2.2%, to $41.02 in pre-market trading Thursday.