Exhibit 3.2


                                     BYLAWS
                                       OF
                         GUARANTY FINANCIAL CORPORATION


                                    ARTICLE I
                               Shareholder Matters

         Section 1.1.    Annual Meetings.

         A.    The annual meeting of the  shareholders of the Corporation  shall
be held at such a place as may be  decided by the Board of  Directors  on a date
during the months of September,  October or November of each and every year, the
exact date, place and hour to be fixed by the Board of Directors.

         B.    At the annual  meeting of the  shareholders  of the  Corporation,
Directors shall be elected and reports of the affairs of the  Corporation  shall
be received and considered. Any other business may be transacted which is within
the powers of the shareholders.

         C.    The Board of Directors may designate any place,  either within or
without the  Commonwealth  of  Virginia,  as the place of meeting for any annual
meeting or for any special meeting.  If no place is designated by the Board, the
place of meeting shall be the principal office of the Corporation.

         Section 1.2.    Special Meetings. A special meeting of the shareholders
may be called for any purpose or purposes  whatsoever  at any time,  but only by
the  President,  the  Chairman  of the  Board  of  Directors,  or the  Board  of
Directors.

         Section 1.3.    Notice  of  Meetings.  Notice  of the time and place of
every annual meeting or special  meeting shall be mailed to each  Shareholder of
record  entitled  to vote at the  meeting  at his  address  as it appears on the
records of the  Corporation not less than ten (10) nor more than sixty (60) days
before the date of such meeting  (except as a different time may be specified by
law).

         Section 1.4.    Quorum.  A majority of the votes entitled to be cast on
a matter by a voting group  constitutes a quorum of such voting group for action
on such matter.  If there is not a quorum at the time for which a meeting  shall
have been called,  the meeting may be adjourned  from time to time by a majority
of the shareholders  present or represented by proxy without notice,  other than
by announcement at the meeting, until there is a quorum.

         Section 1.5.    Voting.   Except  as  the  Articles  of   Incorporation
otherwise provide,  at any meeting of the shareholders,  each outstanding share,
regardless  of  class,  is  entitled  to one vote on each  matter  voted on at a
shareholders' meeting.


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         Section 1.6.    Notice of Shareholder Business. At an annual meeting of
the  shareholders of the  Corporation,  only such business shall be conducted as
shall have been properly  brought  before the meeting.  To be brought  before an
annual meeting,  business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors,  (b)
otherwise  bought  before  the  meeting by or at the  direction  of the Board of
Directors,   or  (c)  otherwise   properly  brought  before  the  meeting  by  a
shareholder.  For business to be properly  brought before an annual meeting by a
shareholder, the Shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation.  To be timely, a shareholder's  notice must be
delivered to or mailed and received at the  principal  executive  offices of the
Corporation,  not less than sixty (60) days nor more than ninety (90) days prior
to the date of the scheduled  annual meeting,  regardless of any  postponements,
deferrals or  adjournments of that meeting to a later date;  provided,  however,
that in the event  that less than  seventy  (70)  days'  notice or prior  public
disclosure of the date of the scheduled annual meeting is given or made,  notice
by a shareholder,  to be timely, must be so received not later than the close of
business on the tenth (10th) day  following the earlier of the day on which such
notice of the date of the  scheduled  annual  meeting  was  mailed or the day on
which such public  disclosure was made. A shareholder's  notice to the Secretary
of the Corporation shall set forth as to each matter the shareholder proposes to
bring before the annual meeting (a) a brief  description of the business desired
to be brought  before the annual  meeting and the reasons  for  conducting  such
business at the annual meeting,  (b) the name and address, as they appear on the
Corporation's books of the shareholder  proposing such business and of any other
person or entity  who is the  record or  beneficial  owner of any  shares of the
Corporation  and  who,  to the  knowledge  of  the  shareholder  proposing  such
business,  supports  such  proposal,  (c) the class and  number of shares of the
Corporation which are beneficially  owned and owned of record by the shareholder
proposing  such  business on the date of his notice to the  Corporation  and the
number of shares so owned by any person or entity who, to the  knowledge  of the
shareholder proposing such business, supports such proposal and (d) any material
interest   (financial  or  other)  of  such   shareholder   in  such   proposal.
Notwithstanding  anything in these Bylaws to the contrary,  no business shall be
conducted at any annual  meeting  except in accordance  with the  procedures set
forth in this Section 1.6. The Chairman of an annual meeting shall, if the facts
warrant,  determine  and declare to the meeting  that  business was not properly
brought before the meeting and in accordance with the provisions of this Section
1.6. and if he should so  determine,  he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be transacted.



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<PAGE>

         Section 1.7.    Order of Business.  All meetings of shareholders  shall
be conducted in accordance  with such rules as are prescribed by the Chairman of
the meeting and he shall  determine the order of business at all meetings of the
shareholders.

         Section 1.8.    Inspectors.  The Board of Directors,  in advance of any
meeting of shareholders,  may, but shall not be required to, appoint one or more
inspectors  to act at such  meeting or any  adjournment  thereof.  If any of the
inspectors so appointed shall fail to appear or act, the chairman of the meeting
may appoint one or more inspectors. The inspectors shall determine the number of
shares of capital stock of the  Corporation  outstanding and the voting power of
each,  the number of shares  represented  at the  meeting,  the  existence  of a
quorum, the validity and effect of proxies,  and shall receive votes, ballots or
consents,  hear and determine all challenges and questions arising in connection
with the right to vote,  count and  tabulate  all votes,  ballots  or  consents,
determine the results, and do such acts as are proper to conduct the election or
vote with  fairness  to all  shareholders.  On  request of the  Chairman  of the
meeting, the inspectors shall make a report of any challenge,  request or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as an inspector of an
election of directors. Inspectors need not be shareholders.


                                   ARTICLE II
                                    Directors

         Section 2.1.    General  Powers.   The  business  and  affairs  of  the
Corporation  shall be managed under the direction of the Board of Directors and,
except  as  otherwise   expressly   provided  by  law  or  by  the  Articles  of
Incorporation, or by these Bylaws, all of the powers of the Corporation shall be
exercised by or under the authority of said Board of Directors.

         Section 2.2.    Number and Qualification.  The Board of Directors shall
consist of not less than five (5) nor more than  fifteen  (15)  Directors.  Each
Director shall a resident of the Commonwealth of Virginia.

         Section 2.3.    Election of Directors.  The Directors  shall be elected
at the annual meeting of shareholders,  and shall hold their offices until their
successors  are  elected  in  accordance  with the  Articles  of  Incorporation.
Nominations  for the election of Directors shall be given in the manner provided
in Section 2.5.

         Section 2.4.    Honorary and Advisory Directors.  The Board may appoint
to the position of Honorary  Director or the position



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<PAGE>

of Advisory  Director such person or persons as it deems  appropriate.  Honorary
Directors  shall be entitled to receive notice of, and to attend all meetings of
the Board,  but they shall not be  Directors  and shall not be entitled to vote,
nor  shall  they be  counted  in  determining  a quorum of the  Board.  Advisory
Directors  shall be  entitled  only to notice of  meetings  of Advisory or other
Boards  of the  Corporation  to which  they  shall be  appointed.  Honorary  and
Advisory Directors,  shall receive such compensation as may be authorized by the
Board of  attendance  at  meetings  of  Advisory  or other  Boards to which such
Advisory or Honorary Directors are appointed.

         Section 2.5.    Nominations.   Only   persons  who  are   nominated  in
accordance  with the  procedures set forth in this Section 2.5 shall be eligible
for election as Directors.  Nominations  of persons for election to the Board of
Directors of the  Corporation may be made by or at the direction of the Board of
Directors,  or by any  shareholder of the  Corporation  entitled to vote for the
election of Directors who complies with the notice  procedures set forth in this
Section 2.5. Such  nominations,  other than those made by or at the direction of
the Board of  Directors,  shall be made  pursuant to timely notice in writing to
the Secretary of the Corporation.  To be timely, a shareholder's notice shall be
delivered to or mailed and received at the  principal  executive  offices of the
Corporations  not less than sixty (60) days nor more than ninety (90) days prior
to the  date of the  scheduled  annual  meeting,  regardless  of  postponements,
deferrals,  or adjournments of that meeting to a later date; provided,  however,
in the event that less than seventy (70) days' notice or prior pubic  disclosure
of the date of the  meeting is given or made,  notice by the  shareholder  to be
timely must be so received  not later than the close of business on the 10th day
following  the  earlier  of the day on  which  such  notice  of the  date of the
scheduled  annual meeting was mailed or the day on which such public  disclosure
was made. Such  shareholder's  notice shall set forth (a) as to each person whom
the shareholder  proposes to nominate for election as a Director,  (1) the name,
age, business address and residence  address of such person,  (ii) the principal
occupation or employment of such person, (iii) the class and number of shares of
the Corporation  which are beneficially  owned by such person and (iv) any other
information  relating  to  such  person  that is  required  to be  disclosed  in
solicitations of proxies for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities  Exchange Act of 1934,
as  amended;  and (b) as to the  shareholder  giving the notice (i) the name and
address of such  shareholder and of any other person or entity who is the record
or beneficial  owner of shares of the  Corporation  and who, to the knowledge of
the shareholder  giving notice,  supports such nominee(s) and (ii) the class and
number of shares of the Corporation  which are  beneficially  owned and owned of
record by such  shareholder  and by any other person or entity



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<PAGE>

who is the record or beneficial  owner of shares of the  Corporation  an who, to
the knowledge of the shareholder giving the notice, supports such nominee(s). At
the  request  of the Board of  Directors  any person  nominated  by the Board of
Directors  for  election as a Director  shall  furnish to the  Secretary  of the
Corporation the information  required to be set forth in a shareholder's  notice
of  nomination  which  pertains to the nominee.  No person shall be eligible for
election  as a  Director  of the  Corporation  unless  in  accordance  with  the
procedures set forth in this Section 2.5. The Chairman of the meeting shall,  if
the facts  warrant,  determine and declare to the meeting that a nomination  was
not made in accordance  with the  procedures  prescribed  by the Bylaws,  and if
should so  determine,  he shall so  declare  to the  meeting  and the  defective
nomination shall be disregarded.

         Section 2.6.    Meetings  of  Directors.   Meetings  of  the  Board  of
Directors shall be held at places within or without the Commonwealth of Virginia
and at times fixed by resolution of the Board of Directors,  or upon call of the
Chairman of the Board of Directors or the President.  The Secretary,  or officer
performing  his duties,  shall give at least  twenty-four  (24) hours' notice by
telegraph,  letter,  telephone or in person,  of all meetings of the  Directors;
provided,  that notice need not be given of regular  meetings  held at times and
places  fixed by  resolution  of the  Board.  Regular  meetings  of the Board of
Directors shall be held at least once in every calendar  month.  Meetings may be
held at any time without notice if all of the Directors are present, or if those
not  present  waive  notice  either  before or after the  meeting.  Neither  the
business to be  transacted  nor the purpose of any annual or special  meeting of
the Board of  Directors  need be  specified in the notice or waiver of notice of
such meeting.

         Section 2.7.    Quorum.  A  majority  of the  members  of the  Board of
Directors shall constitute a quorum.

         Section 2.8.    Compensation.  The  Board of  Directors  shall  fix the
compensation of the Directors.

         Section 2.9.    Committees.   The  Board  of   Directors   may   create
committees  and appoint  members of committees in accordance  with Virginia law.
There shall be an  Executive  Committee  and such  committee  may  exercise  the
authority of the Board of Directors to the fullest extent permitted by law.


                                   ARTICLE III
                                    Officers

         Section 3.1.    Election. The Officers of the Corporation shall consist
of the Chairman of the Board of Directors,  the President, one or more Executive
Vice Presidents, one or more



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senior Vice Presidents,  one or more additional Vice Presidents,  a Secretary, a
Treasurer, one or more Assistant Secretaries,  and such other officers as may be
elected as  provided  in Section  3.3 of this  Article.  All  Officers  shall be
elected by the Board of Directors,  and shall hold office until their successors
are elected and qualify.  Vacancies may be filled at any meeting of the Board of
Directors.  Subject to any  applicable  provision of Virginia law, more than one
office  may be  combined  in the  same  person  as the  Board of  Directors  may
determine.

         Section 3.2.    Removal of Officers. Any Officer of the Corporation may
be summarily  removed with or without cause, at any time, by a resolution passed
by  affirmative  vote of a majority of all of the  Directors;  provided that any
such removal shall not affect an Officer's right to any compensation to which he
is entitled under any employment contract between him and the Corporation.

         Section 3.3.    Other Officers. Other Officers may from time to time be
appointed by the Board of  Directors,  and such  Officers  shall hold office for
such term as may be designated by the said Board of Directors.

         Section 3.4.    Chairman of the Board.  The Chairman of the Board shall
preside at all meetings of the Directors  and all meetings of the  shareholders.
He shall appoint all standing committees and temporary committees. He shall be a
member ex officio of all standing committees and shall have all other powers and
duties as may be prescribed by the Board of Directors or by the Bylaws.

         Section 3.5.    President.  The President  shall be the Chief Executive
Officer of the Corporation.  In the absence or disability of the Chairman of the
Board,  the  President  shall  preside at all meetings of the  Directors  and at
meetings of the shareholders and in the absence or disability of the Chairman of
the Board the duties and  responsibilities  of his office shall devolve upon the
President.  The  President  shall  have such  other  powers and duties as may be
prescribed by the Chairman of the Board of Directors,  the Board of Directors or
by the Bylaws.

         Section 3.6.    Vice Presidents. Executive Vice Presidents, Senior Vice
Presidents  and Vice  Presidents  shall perform such duties as may be prescribed
for them from time to time by the Chairman of the Board of Directors,  the Board
of Directors or the Bylaws.

         Section 3.7.    Secretary.  The  Secretary  shall  have the  duties and
responsibilities prescribed by law for the secretary of a Virginia corporation.



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         Section 3.8.    Surety Bonds. All Officers and employees who shall have
charge or possession of money,  securities or property of the Corporation  must,
before  entering upon their duties,  be covered by a bond with a surety  company
approved by the Board of Directors and state and federal authorities.  The costs
of such bond shall be borne by the Corporation.


                                   ARTICLE IV
                                  Capital Stock

         Section 4.1.    Issues of Certificate of Stock. Certificates of capital
stock  shall be in such  form as may be  prescribed  by law and by the  Board of
Directors.  All  certificates  shall  be  signed  by  the  President  and by the
Secretary or an Assistant Secretary,  or by any other two Officers authorized by
resolution of the Board of Directors.

         Section 4.2.    Transfer of Stock.  The stock of the corporation  shall
be  transferable or assignable on the books of the Corporation by the holders in
person or by attorney on surrender of the certificate or  certificates  for such
shares duly endorsed, and, if sought to be transferred by attorney,  accompanied
by a written  power of attorney to have such stock  transferred  on the books of
the Corporation.

         Section 4.3.    Restrictions  on  Transfer of Stock.  Any  restrictions
that may be imposed by law, by the  Articles of  Incorporation  or Bylaws of the
Corporation,  or by an agreement among shareholders of the Corporation, or by an
agreement among shareholders of the Corporation, shall be noted conspicuously on
the  front  or back of all  certificates  representing  shares  of  stock of the
Corporation.

         Section 4.4.    Lost, Destroyed or Mutilated  Certificates.  The holder
of stock of the  Corporation  shall  immediately  notify the  Corporation of any
loss,   destruction,   or  mutilation  of  the  certificate  therefor,  and  the
Corporation  may in its discretion  cause one or more new  certificates  for the
same  aggregate  number of shares  to be  issued  to such  Stockholder  upon the
surrender of the mutilated certificate,  or upon satisfactory proof of such loss
or destruction  accompanied by the deposit of a bond in such form and amount and
with such surety as the Corporation may require.

         Section 4.5.    Holder of Record.  The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder thereof
in fact and shall not be bound to recognize  any  equitable or other claim to or
interest in such shares of stock on the part of any other person, whether or not
it shall have express or other  notice  thereof,  except as otherwise  expressly
provided by law.



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         Section 4.6.    Record  Date.  The  Board  of  Directors  shall  fix in
advance the record date in order to make a determination of shareholders for any
purpose, including the determination of shareholders entitled to notice of or to
vote at any  shareholders'  meeting or  entitled  to payment of any  dividend or
distribution  to  shareholders.  Such record date shall not be more than seventy
(70)  days  prior to the date on which  the  particular  action  requiring  such
determination of shareholders is to be taken.

         Section 4.7.    Control  Share   Acquisitions.   Article  14.1  of  the
Virginia Stock Corporation Act shall not apply to the Corporation.

                                    ARTICLE V
                            Miscellaneous Provisions

         Section 5.1.    Seal. The seal of the Corporation  shall be circular in
shape with the name of the Corporation around the circumference thereof, and the
word "SEAL" in the center thereof.

         Section 5.2.    Examination  of the  Books and  Records.  The books and
records of account of the  Corporation,  the minutes of the  proceedings  of the
shareholders,  the Board and Committees  appointed by the Board of Directors and
the  records  of  the  shareholders  showing  the  names  and  addresses  of all
shareholders  and the  number  of  shares  held by  each,  shall be  subject  to
inspection  during  the  normal  business  hours  by  any  person  who is a duly
qualified  Director  of the  Corporation  at the time he makes such  inspection.
shareholders shall have such rights to inspect records of the Corporation as are
prescribed by applicable law.

         Section 5.3.    Checks,  Notes and Drafts.  Checks,  notes, drafts, and
other  orders for the  payment of money  shall be signed by such  persons as the
Board of Directors from time to time may authorize.

         Section 5.4.    Amendments  to  By-Laws.  These  Bylaws may be altered,
amended or repealed in accordance with the Articles of Incorporation.

         Section 5.5.    Voting of Stock  Held.  Unless  otherwise  provided  by
resolution  of the Board of  Directors,  the Chairman of the Board of Directors,
the President or any Executive  Vice  President may from time to time appoint an
attorney or attorneys as agent or agents of the  Corporation to cast in the name
of the  Corporation the votes which the Corporation may be entitled to cast as a
shareholder  or  otherwise  in any  other  corporation,  any of  whose  stock or
securities  may be held by the  Corporation,  at  meetings of the holders of the
stock or other securities of such other corporation, or to consent in writing to
any action by any



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such other corporation;  and such Officers may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent, and may
execute  or cause to be  executed  on  behalf of the  Corporation  and under its
corporate seal, or otherwise, such written proxies, consents,  waivers, or other
instruments  as may be  necessary  or  proper  in the  premises;  or any of such
Officers  may  himself  attend  any  meeting  of the  holders  of stock or other
securities of any such other  corporation  and there vote or exercise any or all
other powers of the Corporation as the holder of such stock or other  securities
of such other corporation.




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