Capitalized Mortgage Servicing Rights

3 Months Ended

Mar. 31, 2024

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 9% - 14% (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 7.7 years and 8.0 years at March 31, 2024 and December 31, 2023, respectively.

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


	Three Months Ended March 31, 2024
	Originated		Acquired		Total
Beginning balance	$	382,582	$	8,672	$	391,254
Additions	12,684		—		12,684
Amortization	(15,821)		(810)		(16,631)
Write-downs and payoffs	(1,698)		(89)		(1,787)
Ending balance	$	377,747	$	7,773	$	385,520

	Three Months Ended March 31, 2023
Beginning balance	$	386,878	$	14,593	$	401,471
Additions	13,886		—		13,886
Amortization	(14,287)		(1,129)		(15,416)
Write-downs and payoffs	(2,841)		(466)		(3,307)
Ending balance	$	383,636	$	12,998	$	396,634

We collected prepayment fees totaling $0.4 million and $2.1 million during the three months ended March 31, 2024 and 2023, respectively, which are included as a component of servicing revenue, net on the consolidated statements of income. At March 31, 2024 and December 31, 2023, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded at March 31, 2024 is as follows (in thousands):


Year	Amortization
2024 (nine months ending 12/31/2024)	$	50,032
2025	63,963
2026	58,488
2027	53,971
2028	46,721
Thereafter	112,345
Total	$	385,520

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