Note 5 — Capitalized Mortgage Servicing Rights

Our capitalized mortgage servicing rights (“MSRs”) reflect commercial real estate MSRs derived from loans sold in our Agency Business. The discount rates used to determine the present value of our MSRs throughout the periods presented for all MSRs were between 8% - 15% (representing a weighted average discount rate of 12%) based on our best estimate of market discount rates. The weighted average estimated life remaining of our MSRs was 7.4 years and 7.2 years at September 30, 2018 and December 31, 2017, respectively.

A summary of our capitalized MSR activity is as follows (in thousands):


	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
	Acquired		Originated		Total		Acquired		Originated			Total
Balance at beginning of period	$	120,017	$	137,004	$	257,021	$	143,270	$	109,338	$	252,608
Additions		—		21,368		21,368		—		59,660		59,660
Amortization		(7,052)		(4,786)		(11,838)		(22,564)		(13,075)		(35,639)
Write-downs and payoffs		(4,419)		(2,731)		(7,150)		(12,160)		(5,068)		(17,228)
Balance at end of period	$	108,546	$	150,855	$	259,401	$	108,546	$	150,855	$	259,401


	Three Months Ended September 30, 2017						Nine Months Ended September 30, 2017
Balance at beginning of period	$	168,189	$	74,894	$	243,083	$	194,801	$	32,942	$	227,743
Additions		—		20,720		20,720		—		66,273		66,273
Amortization		(8,952)		(2,759)		(11,711)		(29,074)		(6,353)		(35,427)
Write-downs and payoffs		(4,194)		(22)		(4,216)		(10,684)		(29)		(10,713)
Balance at end of period	$	155,043	$	92,833	$	247,876	$	155,043	$	92,833	$	247,876

We collected prepayment fees of $7.5 million and $16.2 million during the three and nine months ended September 30, 2018, respectively, which are included as a component of servicing revenue, net on the consolidated statements of income. During the three and nine months ended September 30, 2017, we collected prepayment fees totaling $3.8 million and $7.9 million, respectively. As of September 30, 2018 and December 31, 2017, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded as of September 30, 2018 is shown in the table below (in thousands). Actual amortization may vary from these estimates.


Year	Amortization
2018 (three months ending 12/31/2018)	$	12,000
2019		45,946
2020		41,383
2021		34,919
2022		28,357
2023		23,850
Thereafter		72,946
Total	$	259,401