Capitalized Mortgage Servicing Rights

9 Months Ended

Sep. 30, 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 8% - 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 7.1 years and 8.0 years at September 30, 2024 and December 31, 2023, respectively.

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


	Three Months Ended September 30, 2024						Nine Months Ended September 30, 2024
	Originated		Acquired		Total		Originated		Acquired		Total
Beginning balance	$	374,159	$	6,560	$	380,719	$	382,582	$	8,672	$	391,254
Additions	14,476		—		14,476		41,877		—		41,877
Amortization	(16,621)		(678)		(17,299)		(48,593)		(2,224)		(50,817)
Write-downs and payoffs	(1,469)		(24)		(1,493)		(5,321)		(590)		(5,911)
Ending balance	$	370,545	$	5,858	$	376,403	$	370,545	$	5,858	$	376,403

	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
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

We collected prepayment fees totaling $0.4 million and $1.2 million during the three and nine months ended September 30, 2024, respectively, and $1.0 million and $6.1 million during the three and nine months ended September 30, 2023, respectively, which are included as a component of servicing revenue, net on the consolidated statements of income. At September 30, 2024 and December 31, 2023, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded at September 30, 2024 is as follows (in thousands):


Year	Amortization
2024 (three months ending 12/31/2024)	$	17,557
2025	67,899
2026	62,456
2027	57,942
2028	50,678
Thereafter	119,871
Total	$	376,403

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