Regulatory capital calculation that reads each loan file for the facts behind its risk weight
Capital impact of the new rules shown loan by loan.
See one case, screen by screen ↓Software that assigns each exposure its risk weight under the capital rules, totals risk-weighted assets and works out the capital ratios. Regulatory Capital Calculation does this loan by loan under the current rule and the March 2026 proposal side by side, and has agents read each loan file for the facts the weights turn on.
How to choose AI solutions for lending →
Updated
Under the March 2026 re-proposal, a first-lien home loan is no longer a flat 50%. Its weight turns on loan-to-value at origination, occupancy and whether rents repay it; a construction loan’s weight turns on the borrower’s contributed capital; a commitment’s on whether the agreement makes it unconditionally cancelable. Those facts sit in appraisals, applications, credit memos and loan agreements — very often not in the core.
So the impact estimate becomes a spreadsheet project: pull the core, sample, extrapolate, and either assume a value for the loans that have none or leave them at the punitive weight. Origination values lost in an acquisition, occupancy coded at boarding and never revisited, an HVCRE flag set without the worksheet — none of it shows until an examiner pulls a loan and asks for the page.
Estimated split for one whole-book impact run, by hand and with the solution.
Six specialist agents walk every loan down the risk-weight tree and read its file for the facts; the capital planning lead accepts and signs, the CRO approves.
The agents walk Halstead Plains Bank’s September book at 06:12 on Monday 12 October, when the core closes. The capital committee meets on Thursday; the Q3 Call Report is due on 30 October. Here is the day, screen by screen, in the working solution.
When the core closes, six agents map 74,926 loans and 2,904 commitments to exposure classes, read 11,354 documents in 8,416 loan files and weight every loan under the current rule and the proposal of 19 March 2026. Every branch of the tree carries its loan count and balance; every leaf its RWA today and proposed — 31,640 owner-occupied home loans in Table 5, 218 whose LTV cannot be calculated.
“6 agents · 11,354 documents in 8,416 files · 06:12–07:31”
Noor picks AD-24-0311, Cottonwood Flats Townhomes: 64 townhomes in Derby, Kansas, $12,960,000 drawn of an $18,400,000 commitment. It walks to high-volatility commercial real estate at 150%. Beside the real path, a dashed orange branch shows where the core would have sent it — other construction, 95% — because the core codes the loan exempt.
“The core alone gets this wrong. The core codes this loan as exempt from HVCRE, so today it is reported at 100%. The memo’s own worksheet shows 10.7% — below the 15% the exemption needs.”
Each fact in the right rail names its document and page. Noor opens the credit approval memo at page 7: land contributed at $1,450,000 and $860,000 of cash equity — $2,310,000 before the first advance, against an as-completed value of $21,600,000 from Harmon Valuation Group. That is 10.7%.
Not counted: “$1,000,000 the sponsor ‘intends’ to add from Phase I sales — not contributed before the first advance.”
RM-19-044817, 4218 Juniper Hollow Road, Lawrence — a Kettle Creek Savings loan whose value field was blank after the 2019 conversion. The appraisal reader finds the URAR 1004 effective 14 March 2017 by Carla Brandt, certified residential appraiser, at $412,000. $251,380 over $412,000 is an LTV of 61.0%: Table 5, 35% under the proposal, against 50% today.
Noor switches the values to “Core only”. Juniper Hollow falls to “LTV cannot be calculated” and takes 100% — $251,380 of RWA instead of $87,983. Across the book, 3,912 home loans have no value at origination in the core; the agents found a valid appraisal or evaluation for 3,694 of them.
“Core only: no value at origination, so the proposal gives 100% — $251,380 of RWA instead of $87,983.”
Risk-weighted assets fall from $30,994.2M to $28,631.7M under the proposal, and the CET1 ratio rises from 11.65% to 12.62% — 96 basis points on $3,612.0M of CET1 capital. The bridge shows where it comes from: owner-occupied home loans −$1,191.6M, commercial real estate −$398.0M, C&I −$344.0M; home loans repaid from rents +$33.2M.
“What the loan files are worth: 23 bp · $518.0M of RWA.”
Some findings change today’s reported numbers, not only the proposal’s. Seven construction loans ($104.6M) coded exempt are HVCRE: +$52.3M of RWA on the Call Report. Five coded HVCRE meet the exemption; 312 home loans coded owner-occupied are repaid from rents; 19 carry hardship modifications coded performing. Noor accepts the seven and sends them to Tom Carrick with their pages.
Any correction to Schedule RC-R is Tom Carrick’s decision.
On any loan Noor can accept the finding or override it. An override keeps the core’s answer, needs a written reason and goes to a second person — Priya Venkataraman, credit risk analyst — before it counts. It is on the audit trail and goes to the committee with the summary.
“Sent to Priya Venkataraman · the agents’ weight stands until she approves.”
218 loans ($41.7M) still have no valid value at origination — 191 of them Kettle Creek loans with only a 2019 broker price opinion. They stay at 100% meanwhile; finding them would lower RWA by $27.1M. Fourteen commitments with no agreement take the 40% conversion factor, and three construction memos without the worksheet are treated as HVCRE.
The appraisal reader never accepts a broker price opinion or an automated valuation, and never estimates a value.
The capital impact writer drafts the committee summary: what moves the ratio, what the loan files are worth, the corrections to today’s reporting and the method. Noor signs as capital planning lead; Martin approves it for Thursday’s capital committee.
“Agents drafted this summary. They cannot sign, approve or send it.”
The same September book, seen by the five people who carry it — in their own words, and what their week looks like now.
Six specialist agents walk every loan down the risk-weight tree and read its file for the facts; the capital planning lead accepts and signs, the CRO approves.
Maps every loan and commitment from the core to an exposure class using the Call Report codes and collateral records, and records the core field each answer came from.
Finds the value at origination in the loan file — appraisal, evaluation or condominium appraisal — reads the value, date and appraiser, and computes the loan-to-value the proposal defines.
Reads the application, underwriting and servicing file for occupancy, reliance on rents, past-due, nonaccrual and modification status.
Reads construction memos for the HVCRE contributed-capital test — only capital contributed before the first advance, against 15% of the as-completed value — and loan agreements for cancelability.
Applies the current rule and the proposal loan by loan, with the rule paragraph, and totals RWA by segment.
Builds the CET1 bridge, the file-versus-core findings, the missing-data list and the committee summary.
Accept, sign and approve. The agents propose; a named person decides.
Capital, risk and reporting teams can ask in plain words. Every answer cites the page it rests on.
Why is Cottonwood Flats at 150%?
Because it is high-volatility commercial real estate. The borrower contributed $2,310,000 before the first advance — land at $1,450,000 and $860,000 cash — against an as-completed value of $21,600,000. That is 10.7%; the exemption needs 15%. The $1,000,000 the sponsor “intends” to add later does not count. The core codes the loan exempt, so it is reported at 100% today.
What are the loan files worth in capital?
23 basis points of CET1. 3,912 home loans have no value at origination in the core. In their imaged files the agents found valid values for 3,694 — 3,412 appraisals, 214 evaluations and 68 condominium appraisals. With the core alone the proposal shows 12.39%; with the files, 12.62%.
Which loans still have no value at origination?
218 loans, $41.7M. 191 are Kettle Creek Savings loans whose files hold only a 2019 broker price opinion, which is not accepted as a value at origination. They sit at 100% under the proposal; finding their appraisals would lower RWA by about $27.1M.
Draft the note to Tom on the Q3 coding corrections
“Tom — three coding corrections from the September files affect Schedule RC-R for Q3. 7 construction loans ($104.6M) coded exempt are HVCRE (+$52.3M RWA). 5 loans ($38.2M) coded HVCRE meet the exemption (−$19.1M). 19 home loans ($5.2M) carry hardship modifications coded as performing (+$2.6M). Net +$35.8M. The decision on the filing is yours.” It is not sent: Noor accepts the findings and sends them from the File vs core page.
13 screens from the working solution, on its sample data. Pick one to see it large.
The rules and evidence standards every run uses. Changes are versioned and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| Rule versions | Current rule 12 CFR 217.32 · proposal of 19 Mar 2026 for impact runs | Final rule loaded when published and approved before use; the book is re-run once it is approved |
| Re-run | Every month-end close | Every month-end close · every week · only on request |
| What may prove a value at origination | Appraisal or evaluation meeting the appraisal rules | Appraisal or evaluation · appraisal only |
| When the file and the core disagree | The file, with a finding for review | The file · the core — each with a finding for review |
| HVCRE exemption without the worksheet | Treated as HVCRE | Fixed — the exemption must be shown from the worksheet |
| Materiality for a finding | $1,000,000 — below it, findings are listed but not sent to regulatory reporting | $250,000 to $5,000,000, in $250,000 steps |
| Internal CET1 target | 10.5% | 10.0 · 10.5 · 11.0% |
| Who signs and who approves | Capital planning lead signs · CRO approves | Named people; an override needs an analyst and the capital planning lead |
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” = published figures (Fed, FDIC, OCC proposal of 19 Mar 2026, 91 FR, 27 Mar 2026: −8.6% RWA for covered depository institutions in the impact analysis). HVCRE exemption: 12 CFR 217.2 and 12 U.S.C. 1831bb (15% contributed capital). People, banks, properties and loans named on this page are fictional — characters and sample data in the working solution.
Software that assigns each exposure its risk weight under the capital rules, totals risk-weighted assets and works out the capital ratios. Regulatory Capital Calculation does this loan by loan under the current rule and the March 2026 proposal side by side, and has agents read each loan file for the facts the weights turn on.
Every loan walks the same tree of questions — past due, secured by real estate, construction, the HVCRE test, first lien, value at origination, repaid from rents — to a weight under each rule. The risk weight calculator applies only approved rule versions, cites the paragraph and totals RWA by segment into the CET1 ratio.
The appraisal reader searches the imaged file for an appraisal or evaluation made at origination. In the working solution it found 3,694 valid values for 3,912 home loans with none in the core. Where it finds none — only a broker price opinion, an automated valuation or nothing — the loan stays at 100% and goes on the missing-data list.
Yes. The construction and commitment reviewer reads the credit memo’s contributed-capital worksheet and compares capital contributed before the first advance with 15% of the as-completed value. A loan is never treated as exempt without the worksheet, and miscoded loans are raised as findings with today’s Call Report effect.
No. Agents never change a core record, the Call Report or the capital plan. Accepted corrections are sent to the regulatory reporting manager, who decides any change to Schedule RC-R.
Yes. The agents recommend; the capital planning lead accepts each finding and signs the summary, and the Chief Risk Officer approves it for the capital committee. An override needs a reason and a second person, and every step is on the audit trail.
It is loaded as a new rule version and approved before any run uses it. With the default settings the book is walked again once the final rule is approved, and at every month-end close, so the capital effect is re-measured under the final rule.
The Agentic Solution Engine builds and deploys it from your requirements — your rule versions, evidence standards, approvers and a sample of loans with their files — and it goes live once every quality gate has passed. We will walk you through it on your own loans first.
We’ll run Regulatory Capital Calculation on a sample of your own loans and their files.