SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB/A

                               AMENDMENT NO. 1 TO
                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended June 30, 1996

                         Commission file number 0-18265

                         GUARANTY FINANCIAL CORPORATION
                 (Name of Small Business Issuer in its Charter)

                 Virginia                             54-1786496
       (State or Other Jurisdiction                (I.R.S. Employer
            of Incorporation)                     Identification No.)

           1700 Seminole Trail,                          22901
        Charlottesville, Virginia                     (Zip Code)
 (Address of Principal Executive Offices)

                                 (804) 974-1100
                (Issuer's Telephone Number, Including Area Code)

              Securities registered under Section 12(g) of the Act:

                          Common Stock, $1.25 par value
                                (Title of Class)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for past 90 days.
                                                        Yes __X__    No _____

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [___]

         The issuer's gross income for its most recent fiscal year was 
$8,723,750.

         The aggregate  market value of the voting stock held by  non-affiliates
computed by reference to the average of the closing bid and asked prices of such
stock as of June 30, 1996 was aproximately $4,382,985.  (The exclusion from such
amount of the market value of the shares owned by any person shall not be deemed
an  admission  by  the  registrant  that  such  person  is an  affiliate  of the
registrant.)

         The number of shares  outstanding of Common Stock  as of June 30, 1996
was 919,168.

<PAGE>
                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Person: Compliance
with Section 16(a) of the Exchange Act

Directors

         The  following  information  sets  forth  the  names,  ages,  principal
occupations  and business  experience  for all  directors of Guaranty  Financial
Corporation ("Guaranty"). The date shown for first election as a director in the
information below represents the year in which the nominee or incumbent director
was first  elected to the Board of  Directors of Guaranty or  previously  to the
Board of Directors of Guaranty  Savings and Loan (the "Bank").  Unless otherwise
indicated,  the business  experience  and principal  occupations  shown for each
nominee or incumbent director has extended five or more years.

         Thomas P. Baker,  50, has been a director  since 1990.  Mr. Baker has 
served as the President and Chief Executive Officer of Guaranty since January 1,
1990.

         Charles R. Borchardt, 64, has been a director since 1981. Dr. Borchardt
is an oral surgeon practicing in Charlottesville, Virginia, and was President of
Drs. Borchardt & Williams, Inc. from 1963 to 1993.

         Henry J. Browne,  64, has been a director  since 1976. Mr. Browne is an
architect  in private  practice  with  studios in  Keswick,  Virginia,  and Boca
Grande,  Florida.  He was  President  of Browne,  Eichmon,  Dalgliesh,  Gilpin &
Paxton, an architecture firm in  Charlottesville,  Virginia,  from March 1958 to
April 1996.  Mr.  Browne is a past director of  Farmington  Country  Club,  past
president of the Virginia  Chapter of the American  Institute of Architects  and
past president of Downtown Charlottesville, Inc.

         Douglas E. Caton,  53, has been a director  since 1985 and has been  
Chairman of the Board since 1990.  Mr. Caton has been a  commercial  real estate
developer and President of Management  Services Corp., a real estate  management
company, since 1972.  Mr. Caton is a member of the  Virginia  State Bar and is a
Major General in the United States Army Reserve.

         Robert P. Englander, 77, has been a director since 1976.  Mr. Englander
is  President  of  the   Englander   Agency,   a  life   insurance   company  in
Charlottesville, Virginia.

         Harry N. Lewis,  69, has been a director since 1976. Mr. Lewis has been
President  of Lewis  Insurance  Agency,  Inc.,  an  insurance  sales  company in
Charlottesville,  Virginia,  since July 1952. He has served as the Vice Chairman
of  Guaranty's  Board of  Directors  since 1990.  Mr. Lewis is an alumnus of the
Colgate Darden Graduate School of Business Administration and is a member of the
Board of  Directors  of the  United  Way.  He is also a member  of the  Board of
Directors of Keller & George and is the past  president of the Central  Virginia
Chapter of the C.P.C.U.

         John R. Metz, 58, has been a director since 1980.  Mr. Metz has been a 
pharmacist at Martha  Jefferson  Hospital in  Charlottesville,  Virginia,  since
October  1967.  Mr. Metz is a member of the Board of  Directors  of the Virginia
Pharmaceutical Association Research and Education Foundation.

         James R. Sipe, Jr., 40, was appointed to the Board of Directors on June
27,  1996.  Mr.  Sipe  is an  associate  broker  with  Prudential  Funkhouser  &
Associates, a real estate sales company in Harrisonburg, Virginia.

         Oscar W. Smith,  Jr., 66, has been a director  since 1976.  Mr. Smith 
is President of K-B Management Co.,  Charlottesville,  Virginia.  Mr. Smith is a
director of  Smith/Eastman,  Inc.  and is the past  president  of the  Albemarle
County  Rotary  Club.  He is a  master  mason  and  the  past  president  of the
University of Virginia Touchdown Club.

Executive Officers

         The following information as to the business experience during the past
five years is supplied with respect to executive officers of Guaranty. Except as
otherwise indicated, the persons named have served as officers of Guaranty since
it became  the  holding  company  of the Bank,  and all  offices  and  positions
described  below  are  also  with  the  Bank.   There  are  no  arrangements  or
understandings  between the persons named and any other person pursuant to which
such officers were selected.

         Kathleen M. Focht,  36, was appointed  Chief  Financial  Officer of 
Guaranty in April 1995.  Ms. Focht has been  Secretary and Treasurer of Guaranty
since October 1989.  Ms. Focht served as Assistant Vice President and Controller
of Guaranty  from 1988 until 1991,  when she was promoted to Vice  President and
retained her position as Controller.

         Rita J. Lynch,  41, was appointed  Guaranty's Vice  President of Retail
Operations  in May 1995.  From October 1989 until May 1995,  Ms. Lynch served as
Guaranty's Manager of Retail Services.

         Donna W.  Richards,  33, was  appointed  Guaranty's  Vice  President of
Mortgage Lending in April 1995. Ms. Richards has been employed by Guaranty since
April 1993 and has served in the past as Manager of Loan  Originations  and Loan
Officer.  From December 1991 to April 1993,  she was a Senior Loan Processor for
Virginia Federal.

         Rex L. Smith,  38, was  appointed  Guaranty's  Senior Vice  President -
Commercial Lending, in September 1996. From March 1993 until August 1996, he was
Vice President/Senior  Business Manager of Crestar Financial  Corporation.  From
September  1991 to March 1993,  he was Division  Manager/Acquisition  Analyst of
Virginia Capital Group.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires Guaranty's  directors and executive  officers,  and any persons who own
more than 10% of Guaranty Common Stock, to file with the Securities and Exchange
Commission  ("SEC")  reports of  ownership  and changes in  ownership  of common
stock. Officers and directors are required by SEC regulation to furnish Guaranty
with copies of all Section 16(a) forms that they file. Based solely on review of
the copies of such reports furnished to Guaranty or written  representation that
no other reports were required, Guaranty believes that, during fiscal year 1996,
all filing  requirements  applicable to its officers and directors were complied
with except that Douglas A. Caton, Director, inadvertently filed one late report
on Form 4 in April 1996  covering the purchase of 900 shares of Guaranty  Common
Stock in March 1996 and Henry J. Browne, Director,  inadvertently filed one late
report on Form 4 in May 1996  covering  the  purchase  of 500 shares of Guaranty
Common Stock in March 1996.


Item 10. Executive Compensation

Summary of Cash and Certain Other Compensation

         The  following  table shows,  for the fiscal years ended June 30, 1994,
1995 and 1996, the cash compensation paid by Guaranty,  as well as certain other
compensation  paid or accrued for those years, to the named Executive Officer in
all capacities in which he served:
<TABLE>
<CAPTION>

                                          Summary Compensation Table

                                                              Annual Compensation(1)
     Name and Principal Position            Year             Salary             Bonus      All Other Compensation(2)
     ---------------------------            ----             ------             -----      -------------------------
                                                                                                     
<S>                                         <C>                <C>                <C>             <C>   
Thomas P. Baker                             1996               $113,700          -0-              $1,137
President and                               1995                113,700          -0-               1,137
Chief Executive Officer                     1994                113,700          -0-               1,421

</TABLE>

(1)      All  benefits  that  might be  considered  of a personal  nature  did 
         not exceed the lesser of $50,000 or 10% of total  annual salary and 
         bonus for the officer named in the table.
(2)      Amounts reflect Guaranty's matching contribution under its Section 
         401(k) retirement plan.


Stock Option Grants

         Guaranty's  named  Executive  Officer was not granted  stock options or
stock appreciation rights during the fiscal year ended June 30, 1996.

Option Exercises and Holdings

         Set forth in the table below is information concerning each exercise of
stock options during the fiscal year ended June 30, 1996 by the named  Executive
Officer and the year end value of unexercised options.

              Aggregated Options/SAR Exercises in Last Fiscal Year
                          and FY-End Options/SAR Value

<TABLE>
<CAPTION>

                                                             Number of Securities            Value of Unexercised
                                                            Underlying Unexercised               In-The-Money 
                                                                 Options/SARs                    Options/SARs
                                                                at FY-END(#) (1)               at FY-End ($) (2)
                                                                ----------------               -----------------

                      Shares Acquired        Value
       Name           On Exercise (#)    Realized ($)    Exercisable    Unexercisable   Exercisable    Unexercisable
       ----           ---------------    ------------    -----------    -------------   -----------    -------------

<S>                        <C>              <C>            <C>                <C>          <C>               <C>
  Thomas P. Baker          3,600            11,700         14,000            -0-           41,500           -0-
---------------
</TABLE>

(1)      Each of these options relates to Guaranty Common Stock.
(2)      These values are based on $7.50, the closing price of Guaranty Common 
         Stock on June 30, 1996.



Directors' Fees

         Directors,  excluding directors who are officers of Guaranty,  received
fees of $450 for each  meeting of the Board of  Directors  attended and $300 for
each  Compensation,  Planning and Audit Committee meeting attended during fiscal
1996. Mr. Caton,  who is an ex officio of all Committees and devotes  additional
time to Guaranty's affairs as Chairman of the Board of Directors, received a fee
of  $25,200  in the  fiscal  year  ended  June 30,  1996 in lieu of any fees for
attending Board of Directors and Committee meetings.

Employment Agreements

         Guaranty  and Thomas P. Baker are  parties to an  employment  agreement
that provides for Mr. Baker to serve as President and Chief  Executive  Officer
of Guaranty.  The agreement is for a three year-period  ending June 30, 1997 and
provides  for a base  salary  of  $105,000,  which the  Board of  Directors  may
increase.  If Mr. Baker's  employment is terminated for reasons other than cause
or if substantially  all of Guaranty's assets and liabilities are transferred to
another  financial  institution and either Mr. Baker does not become an employee
of the transferee or his employment by the transferee  terminates for any reason
within six months of the transfer,  he will be entitled to receive severance pay
equal to one-half of his annual base salary in effect at the time.

         If termination of employment due to a change in control had occurred in
fiscal  1996,  Mr. Baker would be entitled to  severance  payments  amounting to
approximately $56,850.



Item 11. Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Management

         The  following  table  sets  forth  information  as of  October 1, 1996
regarding the number of shares of Guaranty  Common Stock  beneficially  owned by
all directors and by all directors and executive officers as a group. Beneficial
ownership  includes  shares,  if any,  held in the  name  of the  spouse,  minor
children or other relatives of the nominee living in such person's home, as well
as shares,  if any,  held in the name of  another  person  under an  arrangement
whereby the director or  executive  officer can vest title in himself at once or
at some future time.
<TABLE>
<CAPTION>


                                         Common Stock            Percentage of
      Name                            Beneficially Owned            Class
      ----                            ------------------            -----
Directors

<S>                                       <C>                     <C>  
Thomas P. Baker (1)                        20,800                   2.26%
Charles R. Borchardt                       23,564                   2.56
Henry J. Browne                            31,662                   3.44
Douglas E. Caton                          252,840                  27.51
Robert R. Englander                         9,760                   1.06
Harry N. Lewis                              4,888                    .53
John R. Metz                               13,192                   1.44
James R. Sipe, Jr.                            100                    .01
Oscar W. Smith, Jr.                        19,234                   2.09

All present executive
  officers and directors
  as a group (12 Persons)                 377,020                  41.02%

--------------------
</TABLE>

         (1) Includes  beneficial  ownership of 14,000 shares  issuable upon the
exercise of stock options  exercisable  within 60 days of October 1, 1996.


Security Ownership of Certain Beneficial Owners

         Douglas E.  Caton,  4 Deer Park,  Earlysville,  Virginia  owns  252,840
shares or 27.51% of the Common Stock of Guaranty.  To the knowledge of Guaranty,
no other person owns 5% or more of the Common Stock of Guaranty.


Item 12. Certain Relationships and Related Transactions

         Some of the  directors  and officers of Guaranty are at present,  as in
the past,  customers of  Guaranty,  and Guaranty has had, and expects to have in
the future,  banking  transactions  in the ordinary  course of its business with
directors,   officers,   principal   shareholders  and  their   associates,   on
substantially the same terms,  including interest rates and collateral on loans,
as those  prevailing at the same time for comparable  transactions  with others.
These transactions do not involve more than the normal risk of collectibility or
present other unfavorable features. The largest aggregate outstanding balance of
loans to directors,  executive officers and their associates,  as a group in the
fiscal  year ended  June 30,  1996 was  approximately  $491,276.  Such  balances
totaled $266,621 at June 30, 1996, or 4.2% of Guaranty's  equity capital at that
date.

         There  are  no  legal  proceedings  to  which  any  director,  officer,
principal  shareholder  or  associates  is a party  that would be  material  and
adverse to the Bank.


<PAGE>

                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                   GUARANTY FINANCIAL CORPORATION



Date:  October 24, 1996            By:   /s/ Thomas P. Baker
                                        --------------------------------------
                                            Thomas P. Baker
                                            President, Chief Executive Officer
                                            and Director

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>

               Signature                                      Title                                Date


<S>                                        <C>                                                <C> 
/s/ Thomas P. Baker                          President, Chief Executive Officer and           October 24, 1996
-------------------------------------                       Director
            Thomas P. Baker                      (Principal Executive Officer)

/s/ Kathleen M. Focht                      Chief Financial Officer, Vice President,           October 24, 1996
-------------------------------------          and Secretary/Treasurer (Principal
           Kathleen M. Focht                   Financial and Accounting Officer)


/s/ Douglas E. Caton                               Chairman of the Board                      October 24, 1996
-------------------------------------
            Douglas E. Caton

/s/ Harry N. Lewis                               Vice Chairman of the Board                   October 24, 1996
-------------------------------------
             Harry N. Lewis

/s/ Charles Borchardt
-------------------------------------                       Director                          October 24, 1996
          Charles R. Borchardt

/s/ Henry J. Browne
-------------------------------------                       Director                          October 24, 1996
            Henry J. Browne

/s/ Robert P. Englander
-------------------------------------                       Director                          October 24, 1996
          Robert P. Englander

/s/ John R. Metz                                                                              October 24, 1996
-------------------------------------                       Director                          
              John R. Metz

/s/ James R. Sipe, Jr.                                                                        October 24, 1996
-------------------------------------                       Director                         
           James R. Sipe, Jr.

/s/ Oscar W. Smith, Jr.
-------------------------------------                       Director                          October 24, 1996
          Oscar W. Smith, Jr.


</TABLE>