12.

Mortgage Loan Loss Allowance

During the three months ended September 30, 2012, the Company entered into a settlement agreement with one of our correspondent lenders to pay $7,250 to settle all pending and future repayment and settlement requests for all loans sold to that correspondent lender. The settlement payment reduced the mortgage loan loss allowance. During the three month period ended September 30, 2012, the Company recognized a $440 pre-tax reversal of the mortgage loan loss allowance. During the three month period ended September 30, 2011, the Company recognized pre-tax charges for loan losses related to mortgage loans sold of approximately $1,700. For the nine month periods ended September 30, 2012 and 2011, the Company recognized pre-tax charges for loan losses related to mortgage loans sold of approximately $800 and $3,700 respectively. The Mortgage Banking Segment’s “Accounts payable and other liabilities” line item on the accompanying condensed consolidated balance sheets includes a mortgage loan loss allowance of approximately $6,100 and $12,850 as of September 30, 2012 and December 31, 2011, respectively.