Credit concentration risk monitoring that tests every board limit the moment a loan funds
Limits checked daily, not weeks after the quarter closes.
See one case, screen by screen ↓Tracking how much a bank has lent to one kind of borrower — an industry, a region, a type of collateral, a category of non-bank lender — against the limits its board has set. The OCC treats obligations above 25% of tier 1 capital plus the allowance as a concentration. Credit Concentration Risk Monitoring keeps all 31 limits on one live map and re-tests them as each loan funds, not once a quarter.
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Concentration reports are rebuilt by hand each quarter. An analyst pulls core extracts into spreadsheets, maps every borrower to a NAICS code and a region, works out which non-bank lender belongs in which Call Report category from its name, and builds the board pack weeks after the quarter closes. A limit crossed early in a quarter is seen only when the next report is built.
Meanwhile each loan is checked against the limit once, at credit committee, weeks before it funds. Between approval and funding other loans in the same industry fund too, and nobody adds them up. That is how trucking goes from 95.9% of its limit to 102.2% with every deal “approved within limits”. Non-bank lenders are harder still: since the December 2024 Call Report, banks with $10 billion or more in assets report them in five categories decided by what the borrower lends against — and a name like “Bluewater Funding II LLC” says none of that.
Estimated analyst-days per quarter at a bank this size, by hand and with the solution.
Six specialist agents post every funding to its limits, re-test them and model the way back; the Chief Risk Officer approves.
Monday 12 October at Ellsmere Bank & Trust, an $18.4B bank. Trucking sits at 95.9% of its board limit when a $12.0M equipment loan is released to fund. Here is what happens next, screen by screen, in the working solution.
Every tile is a board limit, sized by the dollars it allows; the fill is what the bank has committed against it. After the 07:00 run: 31 limits, 0 over, 4 near. Trucking (NAICS 484) is amber at 95.9% — $184.6M of a $192.4M limit set at 10% of the $1,924M capital base. The morning’s fundings — Wexler Family Foods, Brookline Dental Partners, Teller Industrial Supply — have already posted to every tile they touch.
“Each tile is a board limit, sized by the dollars it allows. The fill is what we have committed against it — it rises as each loan funds.”
Loan operations releases the wire on Redfield Freight Lines’ $12.0M five-year equipment term loan — 48 sleeper tractors and 60 dry vans, Joplin, Missouri. The trucking tile rises past its border and turns red: 102.2% of the limit, $4.2M over. The same wire takes the Plains region to 93.4% and transportation equipment to 89.1%. Breach case B-2026-017 opens on the spot.
“Truck transportation over its limit · $196.6M against $192.4M · case B-2026-017 opened”
The industry mapper confirms NAICS 484121, long-distance truckload, from the 2025 tax return, and places Joplin in the Plains, out of footprint. The aggregator finds that the owner, Dale Redfield, guarantees a $3.1M line to Redfield Logistics LLC, a freight broker — reported with the obligor group, outside the trucking limit. The limit monitor re-tests all 31 limits, the remediation planner models three ways back and the report writer drafts the notices.
The whole run takes 23 seconds, and each step is shown with what it found.
The waterfall starts at the Q3 board report: 8.93% of capital on 30 September. Duval Fleet Logistics’ line increase (+$6.0M), Halsey Tank Lines’ new loan (+$8.4M), scheduled paydowns (−$1.6M), then Redfield (+$12.0M) — 10.22% now, against a limit the board cut from 12% to 10% in April.
“Each loan fit when credit committee approved it: Redfield, on 23 Sep, took trucking from 8.93% to 9.55%. The three loans funded since were never added up — until the map did it at 10:14.”
A: sell a $15M participation in Ostrom Freightways’ term loan to Sorrel Creek Bank — 94.4% of the limit, about $0.4M a year of net interest income given up, three weeks. B: a CRO exception to 30 November, when Carrow Line Haul’s $9.6M term loan matures — 97.2%, but over by $4.2M for seven weeks. C: ask the board risk committee on 22 October to raise the limit to 11% — 92.9% of the new limit.
Projected, not booked — the planner never commits the bank.
Rachel picks option A and submits it with a note: Sorrel Creek has the term sheet, and Duval Fleet Logistics’ $28M stays on hold until trucking is back under. Martin Abernathy approves from his phone. The notice to Helen Strand, chair of the board risk committee, goes out when he does — inside the escalation clock of credit policy §7.4: the CRO within 1 business day, the chair within 2, back under by 11 November.
Five proposals go to Wednesday’s credit committee, each tested against every limit it touches. With the Ostrom Freightways participation assumed closed, Duval Fleet Logistics’ $28M equipment line would still take truck transportation to 108.9% of its limit; up to $10.8M fits. Corrigan Axle Works’ $35M would breach auto parts. The limit check is written as a note and attached to the credit memo.
“Breaches a board limit — needs a CRO exception or a smaller amount.”
Loans to nondepository financial institutions, split into Memorandum items 10.a–10.e by what each borrower lends against — read from its own documents. All non-bank lenders stand at 147.7% of capital against a 150% limit. The register shows the booked code beside the category from the documents: Orchard Hill moved to mortgage credit, Fennwick to business credit, both confirmed by Kofi on 6 October. Bluewater Funding II is still to check.
On Friday the line went from $100M to $250M, still coded business credit. The classifier reads the 148-page credit agreement, Amendment No. 3 and the borrowing base certificate of 30 September: $222.4M of $312.4M eligible receivables — 71.2% — are retail auto installment contracts. That makes it a consumer credit intermediary, and consumer lenders would be 98.4% of their 30% sub-limit. A person confirms before it counts.
The category is proposed with the passage and the page; it counts in the limits only after a person confirms it.
The October concentration report for the board risk committee on 22 October is drafted in five parts — position, breaches, near a limit, reporting, trend — with citations to the limits, the case and the schedule, and reviewed by Rachel. Beside it, the Q3 schedule of loans to non-bank lenders, as booked and corrected: Orchard Hill $74.5M from 10.e to 10.a, Fennwick $31.8M from 10.d to 10.b, the 9.a total unchanged at $1,626.9M. It goes to Janet Pruitt before the 30 October filing.
The same breach, seen by the five people who carry it — what their quarter looked like, and what it looks like now.
Six specialist agents post every funding to its limits, re-test them and model the way back; the Chief Risk Officer approves.
Posts every funding, booking and paydown from the core as it happens, adds related and contingent exposure per obligor group, and ties to the general ledger nightly.
Assigns NAICS industries from the borrower’s tax return and financial statements, places each borrower in a region, and marks borrowers whose costs depend on imports.
Reads a non-bank lender’s borrowing base, credit agreement or offering memo and puts it in one of the five Call Report categories, with the reason and the page.
Re-tests every limit a funding touches within seconds, runs all 31 limits each morning at 07:00, opens breach cases and tests proposals before credit committee.
Models the ways back under a breached limit — participations, paydowns, exceptions, limit changes — with the effect on every limit, the income given up and the time each takes, and recommends one.
Drafts breach notices, the board concentration report and the Call Report schedule of loans to non-bank lenders.
Approves every plan and exception. The agents propose; a named person decides.
Rachel and her team can ask about a limit, a borrower or a report in plain words — or tell it what to change.
Why did trucking go over its limit?
Four loans, each fine on its own. Trucking was $171.8M — 8.93% of capital at the Q3 report. Duval Fleet Logistics drew a +$6.0M increase on 2 Oct, Halsey Tank Lines funded $8.4M on 7 Oct, and paydowns took off $1.6M — 95.9% of the 10% limit this morning. At 10:14 Redfield Freight Lines’ $12.0M equipment loan funded: $196.6M, 10.22%, over by $4.2M. Committee approved Redfield on 23 Sep, when it took trucking only to 9.55%.
Which limits are within 10% of breach?
Four limits are at 90% or more: all non-bank lenders at 98.5% of the limit, motor vehicle parts manufacturing at 96.0%, truck transportation at 95.9% and trade-exposed borrowers at 94.7%. Two of Wednesday’s proposals would breach one: Corrigan Axle Works (auto parts) and Duval Fleet Logistics (trucking).
What does selling $15M of Ostrom Freightways do?
It takes trucking from $196.6M to $181.6M — 9.44% of capital, 94.4% of the limit and $10.8M of room. It also takes transportation equipment from 89.1% to 85.2% of its limit. It gives up about $0.4M a year of net interest income and takes about 3 weeks. Waiting for Carrow Line Haul’s $9.6M to pay off on 30 Nov gets only to 97.2%, and leaves the bank over for 7 weeks.
Correct the Q3 Call Report for the three moved facilities
Done. Drawn at 30 Sep: 10.a mortgage credit $487.1M, 10.b business credit $484.5M, 10.d consumer credit $261.8M, 10.e other $91.8M. Bluewater Funding II $86.2M moves 10.b → 10.d, Orchard Hill $74.5M 10.e → 10.a and Fennwick $31.8M 10.d → 10.b. The total, $1,626.9M, does not change. I sent it to Janet Pruitt with the documents behind each move, 18 days before the 30 Oct filing.
13 screens from the working solution, on its sample data. Pick one to see it large.
The limits come from your board-approved risk appetite statement; everything else that differs between banks is a setting.
| Setting | Default | Choose from |
|---|---|---|
| Capital base every limit is a share of | Tier 1 capital plus allowance — $1,924M | Taken from the Call Report draft · 30 Sep 2026 |
| Measure exposure on | Commitments (drawn + undrawn) | Commitments · Drawn balances · Commitments, consumer pools on drawn |
| Test limits on every funding | On — and all 31 again at 07:00 | On · Off |
| Near-limit warning | From 90% of a limit | 75% to 95%, in steps of 5 |
| Which documents decide a non-bank lender’s category | Borrowing base, then credit agreement, then offering memo | That order · Credit agreement only · Offering memo only |
| Who confirms a category | Credit risk analyst or director | Credit risk analyst or director · Director only |
| Trade-exposed borrower | Imports ≥ 30% of cost of goods | 20% · 30% · 40% of cost of goods |
| Breach to the CRO · to the board chair · back under | 1 business day · 2 business days · 30 days | CRO: same day or within 1 business day · chair: within 1 or 2 business days, or at the next meeting · 30, 60 or 90 days |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample bank data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = the published rule (OCC, Comptroller’s Handbook, Concentrations of Credit — a concentration is above 25% of tier 1 capital plus the allowance). Call Report categories: FFIEC 031/041 instructions, Schedule RC-C item 9.a and Memoranda 10.a–10.e (12-24). People, the bank, borrowers and funds named on this page are fictional — characters and sample data in the working solution.
Tracking how much a bank has lent to one kind of borrower — an industry, a region, a type of collateral, a category of non-bank lender — against the limits its board has set. The OCC treats obligations above 25% of tier 1 capital plus the allowance as a concentration. Credit Concentration Risk Monitoring keeps all 31 limits on one live map and re-tests them as each loan funds, not once a quarter.
Every funding, booking and paydown from the core is posted to each limit it touches, and the limit monitor re-tests those limits within seconds; all limits are tested again at 07:00. A crossing opens a breach case with its cause, the run log and modelled ways back, and starts the escalation clock.
The non-bank lender classifier reads the borrower’s borrowing base, credit agreement and offering memo and applies the Call Report test: the category of the assets that are more than 50% of the borrower’s assets or lending. It gives the category, its confidence and the passage with its page. A credit risk analyst or the director confirms before it counts.
On commitments — drawn plus undrawn — by default, because a line can be drawn in a day. Drawn balances, or commitments with consumer pools on drawn, are settings.
Yes. Every proposal is tested against every limit it touches before the committee votes, showing the use of each limit today and with the deal, how much fits, and a note that is attached to the credit memo.
Yes. The agents never change a limit, commit the bank, or file or send a report. The director proposes a plan, the Chief Risk Officer approves every plan and exception, the board risk committee approves limit changes, and a person confirms every non-bank category.
No — commercial real estate is tested in CRE Concentration and Stress Testing. This solution covers industries, out-of-footprint regions, collateral, trade-exposed borrowers, leveraged loans, shared national credits and non-bank lenders.
The Agentic Solution Engine builds and deploys it from your requirements — your risk appetite statement, credit policy, report template and a sample of your loan book — and it goes live once every quality gate has passed. We will walk you through it on your own limits first.
We’ll run Credit Concentration Risk Monitoring against your own limits and a sample of your loan book.