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.