Answer:
If the guarantee is limited, then that is the credit exposure to that insider, and it should be reported as $50,000. However, in most cases, if the director or officer is guaranteeing a loan, especially for a business, the entity that received the $500,000 loan could be considered a related interest and the whole amount of the loan would be attributed to the insider anyway. You need to analyze the situation further.
First published on BankersOnline.com 9/20/10