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Capitalized Mortgage Servicing Rights
9 Months Ended
Sep. 30, 2022
Capitalized Mortgage Servicing Rights  
Capitalized Mortgage Servicing Rights

Note 5 — Capitalized Mortgage Servicing Rights

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 8.9 years and 8.5 years at September 30, 2022 and December 31, 2021, respectively.

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

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

    

Originated

    

Acquired

    

Total

    

Originated

    

Acquired

    

Total

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

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Beginning balance

    

$

383,063

    

$

35,590

    

$

418,653

    

$

336,466

    

$

43,508

    

$

379,974

Additions

22,387

22,387

99,397

99,397

Amortization

(12,345)

(2,527)

(14,872)

(35,221)

(8,523)

(43,744)

Write-downs and payoffs

(7,420)

(1,465)

(8,885)

(14,957)

(3,387)

(18,344)

Ending balance

$

385,685

$

31,598

$

417,283

$

385,685

$

31,598

$

417,283

We collected prepayment fees totaling $11.2 million and $42.6 million during the three and nine months ended September 30, 2022, respectively, and $11.2 million and $18.1 million during the three and nine months ended September 30, 2021, respectively. Prepayment fees are included as a component of servicing revenue, net on the consolidated statements of income. At September 30, 2022 and December 31, 2021, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded as of September 30, 2022 is as follows (in thousands):

Year

    

Amortization

2022 (three months ending 12/31/2022)

 

$

14,858

2023

 

58,242

2024

 

56,127

2025

 

53,426

2026

49,876

2027

44,116

Thereafter

 

127,241

Total

$

403,886

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