Capitalized Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2023

Our capitalized mortgage servicing rights (“MSRs”) reflect commercial real estate MSRs derived primarily from loans sold in our Agency Business or acquired MSRs. The discount rates used to determine the present value of all our MSRs throughout the periods presented were between 8% - 13% (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 8.3 years and 8.6 years at September 30, 2023 and December 31, 2022, respectively.

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


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
	Originated		Acquired		Total		Originated		Acquired		Total
Beginning balance	$	383,267	$	11,143	$	394,410	$	386,878	$	14,593	$	401,471
Additions	16,550		—		16,550		49,416		—		49,416
Amortization	(14,988)		(912)		(15,900)		(43,866)		(3,054)		(46,920)
Write-downs and payoffs	(2,400)		(457)		(2,857)		(9,999)		(1,765)		(11,764)
Ending balance	$	382,429	$	9,774	$	392,203	$	382,429	$	9,774	$	392,203

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
Beginning balance	$	391,397	$	20,137	$	411,534	$	395,573	$	27,161	$	422,734
Additions	18,907		—		18,907		63,002		—		63,002
Amortization	(13,355)		(1,427)		(14,782)		(39,348)		(5,184)		(44,532)
Write-downs and payoffs	(9,957)		(1,816)		(11,773)		(32,235)		(5,083)		(37,318)
Ending balance	$	386,992	$	16,894	$	403,886	$	386,992	$	16,894	$	403,886

We collected prepayment fees totaling $1.0 million and $6.1 million during the three and nine months ended September 30, 2023, respectively, and $11.2 million and $42.6 million during the three and nine months ended September 30, 2022, respectively. Prepayment fees are included as a component of servicing revenue, net on the consolidated statements of income. At September 30, 2023 and December 31, 2022, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded at September 30, 2023 is as follows (in thousands):


Year	Amortization
2023 (three months ending 12/31/2023)	$	16,169
2024	63,855
2025	60,481
2026	54,479
2027	49,654
2028	43,110
Thereafter	104,455
Total	$	392,203

Based on scheduled maturities, actual amortization may vary from these estimates.