COLUMBUS, Ohio ( TheStreet) -- Huntington Bancshares ( HBAN) on Thursday reported fourth-quarter earnings that missed estimates by three cents after repaying a government bailout.

The bank reported fourth-quarter net income of $122.9 million, or 5 cents a share, missing the consensus estimate of 8 cents a share among analysts polled by Thomson Reuters.

The earnings miss resulted from a one-time reduction in retained earnings of $56.3 million, or 7 cents a share, after the company's repurchase of $1.4 billion preferred stock held by the U.S. Treasury in order to repay money received through the Troubled Assets Relief Program, or TARP. The repayment followed a $920 million common stock offering completed by the company in mid-December.

Huntington announced Wednesday it had completed its exit from TARP, by repurchasing a warrant issued to the government in November 2008, which was valued at $49.1 million.

The fourth-quarter results compared to net income applicable to common shareholders of $71.5 million, or 10 cents a share, in the third quarter and a net loss of $369.7 million, or 56 cents a share, in the fourth quarter of 2009.

For the full year, Huntington reported net income to common shareholders of $312.3 million, or 19 cents a share, compared to a 2009 net loss of $3.1 billion, or $6.14 a share .

Earnings continued to be driven by a reduction in the provision for loan loss reserves, which was $87 million in the fourth quarter, declining from $119.2 million the previous quarter and $894 million in the fourth quarter of 2010.

Fourth-quarter net charge-offs - loan losses less recoveries - totaled $172.3 million and exceeded the provision for credit losses by $85.3 million. This reserve release boosted Huntington's bottom line and followed the continuing trend of many large banks, including Citigroup ( C), which reported a net release of allowance for loan losses and unfunded lending commitments was $2.3 billion, Wells Fargo ( WFC), which released $850 million from reserves; and JPMorgan Chase ( JPM), which saw a $1.9 billion decline in loan loss reserves.

The ratio of nonperforming assets - including nonaccrual loans and repossessed real estate - to total assets was 1.57% as of December 31, improving from 2.10% in September and 3.99% at the end of 2009.

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