The fan is doing it's job by brining down and stabailizing, but the temps seem high. The hard part is that you may not get an accurate read from third party temp monitors.
As this is a custom built rig, there are a few things you should review and wipe off the list of potential culprates (if in fact the temps run this hot):
- Check that the heat sink is attached properly (all corners are down and attached to the board).
- Check for BIOS update. Could be a fan/temp/CPU update for your board.
- Thermal grease - you used not too much and not too little?
- Be sure case is clean and heat sink free of dust.
The cpu may be running hot but it is under load and is not shutting down the system. That is the true sign of overheating and protection will kick in one the thermal limit has been reached.
Intel also has a processor diagnotic tool that could be useful.
Also a reaffiming note from communities.intel.com
Anything from the Tcase and below will be the expected temperature of the processor in normal use, anything that doesn't stress out the processor (watching movies, burning CDs, browsing the internet, creating documents, etc.) When the processor is stressed out meaning that you are running heavy processor applications that take control of the CPU or uses it at 100% the temperature will go beyond the Tcase. It can perfectly reach 90 to 95 degrees and the processor will still be OK. The cooling fan is in charge to keep that temperature there.
If the processor temperature reaches 100°C or more it will send a signal to the motherboard to shut down to prevent mayor damages and most likely it won't be possible to turn the computer back in until it cools down.