UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000.

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ____________

                        COMMISSION FILE NUMBER: 000-24235

                            GUARANTY BANCSHARES, INC.
             (Exact name of registrant as specified in its charter)

                      TEXAS                        75-16516431
         (State or other jurisdiction of         (I.R.S. Employer
          incorporation or organization)        Identification No.)

                                 100 W. ARKANSAS
                            MT. PLEASANT, TEXAS 75455
          (Address of principal executive offices, including zip code)

                                  903-572-9881
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 the past 90 days. [X]Yes [ ] No

As of May 15, 2000, there were 3,128,416 shares of the registrant's Common
Stock, par value $1.00 per share, outstanding.
<PAGE>
                            GUARANTY BANCSHARES, INC.
                               INDEX TO FORM 10-Q

--------------------------------------------------------------------------------

PART I - FINANCIAL INFORMATION

                                                                            PAGE
                                                                            ----
     Item 1.  Financial Statements
              Consolidated Balance Sheets...................................  2
              Consolidated Statements of Earnings...........................  3
              Condensed Consolidated Statements of Changes in
                Shareholders' Equity .......................................  3
              Condensed Consolidated Statements of Cash Flows...............  4
              Consolidated Statements of Comprehensive Income...............  5
              Notes to Interim Consolidated Financial Statements............  6
    Item 2.   Management's Discussion and Analysis of Financial Condition
                and Results of Operations ..................................  8
    Item 3.   Quantitative and Qualitative Disclosures about Market Risk.... 18

PART II - OTHER INFORMATION

    Item 1.  Legal Proceedings.............................................. 18
    Item 2.  Changes in Securities and Use of Proceeds...................... 18
    Item 3.  Defaults upon Senior Securities ............................... 18
    Item 4.  Submission of Matters to a Vote of Security Holders............ 18
    Item 5.  Other Information.............................................. 18
    Item 6.  Exhibits and Reports on Form 8-K............................... 18
    Signatures.............................................................. 19

                                       1
<PAGE>
                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                            GUARANTY BANCSHARES, INC.
                           CONSOLIDATED BALANCE SHEETS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                MARCH 31,        DECEMBER 31,
                                                                                                  2000               1999
                                                                                             ---------------    ---------------
                                                                                               (UNAUDITED)
<S>                                                                                          <C>                <C>
                                  ASSETS

Cash and due from banks ...................................................................  $        12,468    $        13,102
Interest bearing deposits in other banks ..................................................               80                 50
                                                                                             ---------------    ---------------
      Total cash and cash equivalents .....................................................           12,548             13,152
Federal funds sold ........................................................................            9,155              1,140
Securities available-for-sale .............................................................           81,292             79,761
Loans, net of allowance for loan losses of $2,549 and $2,491 ..............................          256,559            252,718
Premises and equipment, net ...............................................................           13,041             11,662
Accrued interest receivable ...............................................................            2,840              2,735
Other assets ..............................................................................            9,976              9,270
                                                                                             ---------------    ---------------
      Total assets ........................................................................  $       385,411    $       370,438
                                                                                             ===============    ===============
                                             LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
   Deposits:
    Noninterest-bearing ...................................................................  $        59,130    $        56,404
    Interest-bearing ......................................................................          279,635            272,233
                                                                                             ---------------    ---------------
      Total deposits ......................................................................          338,765            328,637
                                                                                             ---------------    ---------------
FHLB advances .............................................................................            8,627             10,699
Long-term debt ............................................................................            7,000               --
Other liabilities .........................................................................            2,292              2,606
                                                                                             ---------------    ---------------
      Total liabilities ...................................................................          356,684            341,942
                                                                                             ---------------    ---------------
Shareholders' equity:
    Preferred stock, $5.00 par value, 15,000,000 shares authorized,
         none issued ......................................................................             --                 --
    Common stock, $1.00 par value, 50,000,000 shares authorized,
         3,250,016 issued .................................................................            3,250              3,250
   Additional capital .....................................................................           12,659             12,659
   Retained earnings ......................................................................           14,080             13,535
   Treasury stock, 17,600 shares at cost ..................................................             (174)              (174)
   Accumulated other comprehensive income .................................................           (1,088)              (774)
                                                                                             ---------------    ---------------
   Total shareholders' equity .............................................................           28,727             28,496
                                                                                             ---------------    ---------------
   Total liabilities and shareholders' equity .............................................  $       385,411    $       370,438
                                                                                             ===============    ===============
</TABLE>

      See accompanying Notes to Interim Consolidated Financial Statements.

                                       2
<PAGE>
                            GUARANTY BANCSHARES, INC.
                       CONSOLIDATED STATEMENTS OF EARNINGS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                         THREE MONTHS ENDED
                                                                                                              MARCH 31,
                                                                                                 -----------------------------------
                                                                                                      2000                1999
                                                                                                 ---------------     ---------------
<S>                                                                                              <C>                 <C>
Interest income:
   Loans ....................................................................................    $         5,317     $         3,881
   Securities ...............................................................................              1,314                 772
   Federal funds sold and other temporary investments .......................................                 44                 110
                                                                                                 ---------------     ---------------
      Total interest income .................................................................              6,675               4,763
Interest expense:
    Deposits ................................................................................              3,434               2,221
    Other borrowed funds ....................................................................                139
                                                                                                 ---------------     ---------------
      Total interest expense ................................................................              3,573               2,273
                                                                                                 ---------------     ---------------
      Net interest income ...................................................................              3,102               2,490
Provision for loan losses ...................................................................                130                 105
                                                                                                 ---------------     ---------------
      Net interest income after provision for loan losses ...................................              2,972               2,385
Noninterest income:
   Service charges ..........................................................................                542                 405
   Other operating income ...................................................................                369                 252
   Realized (loss) gain on available-for-sale securities ....................................                (34)                  5
                                                                                                 ---------------     ---------------
      Total noninterest income ..............................................................                877                 662
                                                                                                 ---------------     ---------------
Noninterest expense:
   Employee compensation and benefits .......................................................              1,770               1,268
   Net bank premises expense ................................................................                417                 309
   Other operating expenses .................................................................                932                 650
                                                                                                 ---------------     ---------------
      Total noninterest expenses ............................................................              3,119               2,227
                                                                                                 ---------------     ---------------
      Earnings before income taxes ..........................................................                730                 820
Provision for income taxes ..................................................................                185                 165
                                                                                                 ---------------     ---------------
      Net earnings ..........................................................................    $           545     $           655
                                                                                                 ===============     ===============
      Basic earnings per common share .......................................................    $          0.17     $          0.23
                                                                                                 ===============     ===============
      Diluted earnings per common share .....................................................    $          0.17     $          0.23
                                                                                                 ===============     ===============
</TABLE>
     See accompanying Notes to Interim Consolidated Financial Statements.

                            GUARANTY BANCSHARES, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
                             IN SHAREHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                         THREE MONTHS ENDED
                                                                                                              MARCH 31,
                                                                                                 ----------------------------------
                                                                                                       2000               1999
                                                                                                 ---------------    ---------------
<S>                                                                                              <C>                <C>
Balance at beginning of period ...............................................................   $        28,496    $        23,796
Net income ...................................................................................               545                655
Change in unrealized gain/loss on
    securities available for sale, net of tax ................................................              (314)              (166)
                                                                                                 ---------------    ---------------
Balance at end of period .....................................................................   $        28,727    $        24,285
                                                                                                 ===============    ===============
</TABLE>
    See accompanying Notes to Interim Consolidated Financial Statements.

                                       3
<PAGE>
                         GUARANTY BANCSHARES, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (DOLLARS IN THOUSANDS)
                                (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                           THREE MONTHS
                                                                                                          ENDED MARCH 31,
                                                                                                 ----------------------------------
                                                                                                      2000               1999
                                                                                                 ---------------    ---------------
<S>                                                                                                          <C>                <C>
Net cash provided by operating activities ....................................................               171                745

Cash flows from investing activities:
     Securities available for sale:
          Purchases ..........................................................................            (9,727)            (2,627)
          Sales ..............................................................................             5,314              1,006
          Maturities, calls, and principal repayments ........................................             2,387              3,439
     Securities held to maturity:
          Purchases ..........................................................................              --                 (708)
          Maturities, calls, and principal repayments ........................................              --                  593
          Net increase in loans ..............................................................            (4,283)           (11,219)
          Purchases of premises and equipment ................................................            (1,563)              (588)
          Proceeds from sale of premises, equipment and other real estate ....................                56                 31
          Net increase in federal funds sold .................................................            (8,015)            (3,615)
                                                                                                 ---------------    ---------------
               Net cash used by investing activities .........................................           (15,831)           (13,688)
                                                                                                 ---------------    ---------------
Cash flows from financing activities:
      Change in deposits .....................................................................            10,128             11,385
      Net change in short-term FHLB advances .................................................            (2,000)              --
      Repayment of long-term FHLB advances ...................................................               (72)               (69)
      Proceeds from issuance of long-term debt ...............................................             7,000               --
                                                                                                 ---------------    ---------------
            Net cash provided from financing activities ......................................            15,056             11,316
                                                                                                 ---------------    ---------------
            Net increase in cash and cash equivalents ........................................              (604)            (1,627)
Cash and cash equivalents at beginning of period .............................................            13,152             11,721
                                                                                                 ---------------    ---------------
Cash and cash equivalents at end of period ...................................................   $        12,548    $        10,094
                                                                                                 ===============    ===============

Supplemental disclosures:
     Cash paid for income taxes ..............................................................   $           170    $           115
     Cash paid for interest ..................................................................             3,504              2,255

Significant non-cash transactions:
     Transfers from loans to real estate owned ...............................................               132                 67
</TABLE>
      See accompanying Notes to Interim Consolidated Financial Statements.

                                       4
<PAGE>
                           GUARANTY BANCSHARES, INC.
                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                        THREE MONTHS
                                                                                                       ENDED MARCH 31,
                                                                                              ----------------------------------
                                                                                                    2000              1999
                                                                                              ---------------    ---------------
<S>                                                                                                       <C>                <C>
Net income ................................................................................               545                655
Other comprehensive income:
    Unrealized gain/(loss) on available for sale securities
        arising during the period .........................................................              (509)              (247)
    Reclassification adjustment for amounts realized on
        securities sales included in net income ...........................................                34                 (5)
                                                                                              ---------------    ---------------
            Net unrealized gain/(loss) ....................................................              (475)              (252)
            Tax effect ....................................................................               161                 86
                                                                                              ---------------    ---------------
                 Total other comprehensive income .........................................              (314)              (166)
                                                                                              ---------------    ---------------
Comprehensive income.......................................................................   $           231    $           489
                                                                                              ===============    ===============
</TABLE>

                                       5
<PAGE>
                            GUARANTY BANCSHARES, INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

NOTE 1.      BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of Guaranty
Bancshares, Inc. (the "Company") and its wholly-owned subsidiaries Guaranty (TX)
Capital Trust I and Guaranty Financial Corp., Inc., which wholly owns Guaranty
Bank, and one non-bank subsidiary, Guaranty Company. Guaranty Bank has three
wholly-owned non-bank subsidiaries, Guaranty Leasing Company, Guaranty Mortgage
Company and GB Com, Inc. All significant intercompany balances and transactions
have been eliminated in consolidation.

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the statements reflect all
adjustments necessary for a fair presentation of the financial position, results
of operations and cash flows of the Company on a consolidated basis, and all
such adjustments are of a normal recurring nature. These financial statements
and the notes thereto should be read in conjunction with the Company's Annual
Report on Form 10-K filed with the Securities and Exchange Commission on March
10, 2000. The Company has consistently followed the accounting policies
described in the Annual Report in preparing this Form 10-Q. Operating results
for the first quarter ended March 31, 2000, are not necessarily indicative of
the results that may be expected for the year ending December 31, 2000.

      To prepare financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions based on
available information. These estimates and assumptions affect amounts reported
in the financial statements and disclosures provided; future results could
differ. The collectibility of loans, fair value of financial instruments and
status of contingencies are particularly subject to change.

NOTE 2.      EARNINGS PER SHARE

         The following table illustrates the computation of earnings per share
("EPS") (dollars in thousands, except share data):
<TABLE>
<CAPTION>
                                                                                                        THREE MONTHS
                                                                                                       ENDED MARCH 31,
                                                                                              ---------------------------------
                                                                                                   2000              1999
                                                                                              ---------------   ---------------
                                                                                                        (UNAUDITED)
<S>                                                                                           <C>               <C>
Net earnings available to common shareholders .............................................   $           545   $           655
Weighted average common shares used in basic EPS ..........................................         3,232,416         2,898,280
Potential dilutive common shares ..........................................................              --                --
                                                                                              ---------------   ---------------
Weighted average common and potential dilutive
      common shares used in dilutive EPS ..................................................         3,232,416         2,898,280
                                                                                              ===============   ===============
Basic earnings per common share ...........................................................   $          0.17   $          0.23
                                                                                              ===============   ===============
Diluted earnings per common share .........................................................   $          0.17   $          0.23
                                                                                              ===============   ===============
</TABLE>
                                       6
<PAGE>
NOTE  3.      GUARANTEED PREFERRED BENEFICIAL INTERESTS IN JUNIOR SUBORDINATED
              DEBENTURES


      On March 23, 2000, the Company, in a private placement, issued $7,000,000
(7,000 shares with a liquidation amount of $1,000 per security) of 10.875% Fixed
Rate Capital Trust Pass-through Securities ("TruPS") through a newly formed,
wholly-owned subsidiary, Guaranty (TX) Capital Trust I (the "Trust"). The Trust
invested the total proceeds from the sale of the TruPS in 10.875% Junior
Subordinated Deferrable Interest Debentures (the "Debentures") issued by the
Company. The net proceeds from the sale of the Debentures will be used to buy
back shares of the Company's stock, provide a $1.5 million additional capital
contribution to Guaranty Bank and provide for additional working capital to
support growth.

      With certain exceptions, the amount of the principal and any accrued and
unpaid interest on the Debentures are subordinated in right of payment to the
prior payment in full of all senior indebtedness of the Company. The terms of
the Debentures are such that they qualify as Tier I capital under the Federal
Reserve Board's regulatory capital guidelines applicable to bank holding
companies. Interest on the Debentures is payable semi-annually on March 8 and
September 8 of each year, commencing September 8, 2000. The interest is
deferrable on a cumulative basis for up to five consecutive years following a
suspension of dividend payments on all other capital stock. No principal
payments are due until maturity on March 8, 2030.

      On any March 8 or September 8 on or after March 8, 2010 and prior to
maturity, the Debentures are redeemable for cash at the option of the Company,
on at least 30 but not more than 60 days notice, in whole or in part, at the
redemption prices set forth in the table below, plus accrued interest to the
date of redemption.


                                             IF REDEEMED
IF REDEEMED DURING      PERCENTAGE OF          DURING          PERCENTAGE OF
12 MONTHS BEGINNING       PRINCIPAL      12 MONTHS BEGINNING     PRINCIPAL
     MARCH 8,              AMOUNT             MARCH 31,           AMOUNT
--------------------  ------------------  ------------------  ----------------

       2010               105.438%              2016             102.175%
       2011               104.894%              2017             101.631%
       2012               104.350%              2018             101.088%
       2013               103.806%              2019             100.544%
       2014               103.263%         2020 and after        100.000%
       2015               102.719%

      Upon the occurrence of certain special events, the Company will have the
right to call the securities at par at any time with the permission of the
Federal Reserve.

      These special events include, among other things:

          1. A change in the laws or regulations in the United States or any
             taxing authority to the effect that the Trust becomes subject to
             federal income tax and the interest paid by the Company is no
             longer tax deductible.

          2. A change in the law by any government agency that would make the
             Trust an investment company under the Investment Company Act of
             1940.

          3. A change in the law by any government agency that would cause the
             Company to not be able to treat the liquidation amount of the debt
             security as Tier I Capital.

                                       7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      This Management's Discussion and Analysis includes forward-looking
statements. When used in this document, the words or phrases such as, "will
likely result," "are expected to," "will continue," "is anticipated,"
"estimated," "projected," or similar expressions are intended to identify
"forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties including changes in economic conditions in the Company's market
area, changes in policies by regulatory agencies, fluctuations in interest
rates, demand for loans in the Company's market area and competition, that could
cause actual results to differ materially from historical earnings and those
presently anticipated or projected. Factors listed above could affect the
Company's financial performance and could cause the Company's results for future
periods to differ materially from any statements expressed with respect to
future periods.

      The Company does not undertake, and specifically disclaims any obligation,
to publicly revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.

GENERAL OVERVIEW

      Guaranty Bancshares, Inc. (the "Company") is a registered bank holding
company that derives substantially all of its revenues and income from the
operation of its subsidiary, Guaranty Bank (the "Bank"). The Bank is a full
service bank that provides a broad line of financial products and services to
small and medium-sized businesses and consumers through ten banking locations in
the Texas communities of Mount Pleasant (two offices), Bogata, Commerce, Deport,
Paris, Pittsburg, Sulphur Springs, Talco and Texarkana.

FINANCIAL OVERVIEW

      Net earnings available to common shareholders for the three months ended
March 31, 2000 were $545,000 or $0.17 per share compared with $655,000 or $0.23
per share for the three months ended March 31, 1999, a decrease of $110,000 or
16.8%. The decrease in net earnings was due primarily to an increase in
noninterest expense of $892,000 or 40.1%, and an increase in the provision for
loan losses of $25,000 or 23.8%, offset by an increase in net interest income of
$612,000 or 24.6% and an increase in noninterest income of $215,000 or 32.5%.

      The three-month period ended March 31, 2000 showed steady growth. Gross
loans increased to $259.1 million at March 31, 2000, from $255.2 million at
December 31, 1999, an increase of $3.9 million or 1.5%. Total assets were $385.4
million at March 31, 2000, compared with $370.4 million at December 31, 1999.
The increase of $15.0 million in total assets resulted primarily from the
investment of funds provided from an increase in deposits of $10.1 million and
the issuance of the Debentures of $7.0 million - See Note 3 to the Interim
Consolidated Financial Statements. Total deposits were $338.8 million at March
31, 2000 compared to $328.7 million at December 31, 1999, an increase of $10.1
million or 3.1%. There were no Debentures outstanding at December 31, 1999.

      Total shareholders' equity was $28.7 million at March 31, 2000, compared
with $28.5 million at December 31, 1999, an increase of $231,000 or 0.81%. This
increase was due to earnings for the period of $545,000 less a decrease in
accumulated comprehensive income of $314,000.

                                       8
<PAGE>
RESULTS OF OPERATIONS

INTEREST INCOME

      Interest income for the three months ended March 31, 2000 was $6.7
million, an increase of $1.9 million or 40.1% compared with the three months
ended March 31, 1999. The increase in interest income was due primarily to
higher interest income on loans. Average loans were $257.9 million for the three
months ended March 31, 2000, compared with $190.7 million for the three months
ended March 31, 1999, an increase of $67.2 million or 35.2%. Average securities
were $79.1 million for the three months ended March 31, 2000, compared with
$51.2 million for the three months ended March 31, 1999, an increase of $27.9
million or 54.3%.

INTEREST EXPENSE

      Interest expense on deposits and other interest-bearing liabilities was
$3.6 million for the three months ended March 31, 2000, compared with $2.3
million for the three months ended March 31, 1999, an increase of $1.3 million
or 57.2%. The increase in interest expense was due primarily to a 42.0% increase
in average interest-bearing liabilities to $292.1 million for the three months
ended March 31, 2000, from $205.6 million for the three months ended March 31,
1999. The increase is also due to a rise in average interest rates from 4.48%
for the three months ended March 31, 1999 to 4.92% for the first three months
ended March 31, 2000.

NET INTEREST INCOME

      Net interest income was $3.1 million for the three months ended March 31,
2000 compared with $2.5 million for the three months ended March 31, 1999, an
increase of $612,000 or 24.6%. The increase in net interest income resulted
primarily from growth in average interest-earning assets to $340.2 million for
the three months ended March 31, 2000, from $250.9 million for the three months
ended March 31, 1999, an increase of $89.3 million or 35.6%.

      The Company's net interest income is affected by changes in the amount and
mix of interest-earning assets and interest-bearing liabilities, referred to as
a "volume change." It is also affected by changes in yields earned on
interest-earning assets and rates paid on interest-bearing deposits and other
borrowed funds, referred to as a "rate change." The following tables set forth,
for each category of interest-earning assets and interest-bearing liabilities,
the average amounts outstanding, the interest earned or paid on such amounts,
and the average rate earned or paid for the three months ended March 31, 2000
and 1999, respectively. The tables also set forth the average rate earned on
total interest-earning assets, the average rate paid on total interest-bearing
liabilities, and the net interest margin on average total interest-earning
assets for the same periods.

                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                                               THREE MONTHS ENDED MARCH 31,
                                                        -------------------------------------------------------------------------
                                                                        2000                                  1999
                                                        ------------------------------------    ---------------------------------
                                                         AVERAGE      INTEREST     AVERAGE       AVERAGE    INTEREST     AVERAGE
                                                       OUTSTANDING     EARNED/      YIELD/     OUTSTANDING   EARNED/      YIELD/
                                                         BALANCE        PAID         RATE        BALANCE      PAID         RATE
                                                        ---------     ---------    ---------    ---------   ---------   ---------
                                                                                   (DOLLARS IN THOUSANDS)
                                                                                         (UNAUDITED)
<S>                                                     <C>           <C>           <C>         <C>         <C>              <C>
Assets
Interest-earning assets:
   Loans:
      Commercial and industrial .....................   $  67,823     $   1,393         8.26%   $  58,230   $   1,163        8.10%
      Agriculture ...................................       8,723           208         9.59         --          --          --
      Real estate-mortgage and
        construction ................................     153,937         3,084         8.06      111,495       2,206        8.02
      Installment and other .........................      27,447           629         9.22       20,989         501        9.68
      Fees on loans .................................                         3                                    11
      Securities ....................................      79,066         1,314         6.69       51,227         772        6.11
      Federal funds sold ............................       3,177            44         5.61        6,936          83        4.85
      Interest-bearing deposits in
        other financial institutions ................        --            --           --          1,980          27        5.53
                                                        ---------     ---------                 ---------   ---------
      Total interest-earning assets .................     340,173         6,675         7.89%     250,857       4,763        7.70%

 Less allowance for loan losses .....................      (2,479)                                 (1,525)
                                                        ---------                               ---------

     Total interest-earning
           assets, net of allowance .................     337,694                                 249,332
Non-earning assets:
     Cash and due from banks ........................      12,967                                   8,682
     Premises and equipment .........................      12,298                                   7,226
     Interest receivable and
           other assets .............................      13,714                                   9,321
     Other real estate owned ........................         150                                     135
                                                        ---------                               ---------

            Total assets ............................   $ 376,823                               $ 274,696
                                                        =========                               =========

LIABILITIES AND SHAREHOLDERS'
Interest-bearing liabilities:
      NOW, savings, and money
          market accounts ...........................   $  93,399     $     929         4.00%   $  65,569   $     512        3.17%
      Time deposits .................................     188,150         2,505         5.36      136,085       1,709        5.09
                                                        ---------     ---------                  ---------   ---------
         Total interest-bearing
             deposits ...............................     281,549         3,434         4.91      201,654       2,221        4.47
      FHLB advances .................................       9,877           120         4.89        3,995          52        5.28
      Long-term debt ................................         692            19        10.87         --          --          --
                                                        ---------     ---------                  ---------   ---------
         Total interest-bearing
             liabilities ............................     292,118     $   3,573         4.92%      205,649   $   2,273       4.48%
                                                                      ---------                              ---------

Noninterest-bearing liabilities:
      Demand deposits ...............................      54,162                                   42,249
      Accrued interest, taxes and
          other liabilities .........................       2,190                                    2,556
                                                        ---------                                ---------
          Total liabilities .........................     348,470                                  250,454
Shareholders' equity ................................      28,353                                   24,242
                                                        ---------                                ---------

         Total liabilities and
              shareholders' equity ..................   $ 376,823                                $ 274,696
                                                        =========                                =========
Net interest income .................................                 $   3,102                             $   2,490
                                                                      =========                             =========

Net interest spread .................................                                   2.97%                                3.22%
                                                                                   =========                            =========

Net interest margin .................................                                   3.67%                                4.03%
                                                                                   =========                            =========
</TABLE>

                                       10
<PAGE>
     The following table presents the dollar amount of changes in interest
income and interest expense for the major components of interest-earning assets
and interest-bearing liabilities and distinguishes between the increase
(decrease) related to outstanding balances and the volatility of interest rates.
For purposes of this table, changes attributable to both rate and volume that
can be segregated have been allocated.

<TABLE>
<CAPTION>
                                                                                 THREE MONTHS ENDED MARCH 31,
                                                                    -----------------------------------------------------
                                                                          2000 VS. THREE MONTHS ENDED MARCH 31, 1999
                                                                    -----------------------------------------------------
                                                                            INCREASE (DECREASE)
                                                                                  DUE TO
                                                                         VOLUME             RATE               TOTAL
                                                                    ---------------    ---------------    ---------------
                                                                                    (DOLLARS IN THOUSANDS)
                                                                                          (UNAUDITED)
<S>                                                                 <C>                <C>                <C>
Interest-earning assets:
   Loans ........................................................   $         1,399    $            37    $         1,436
   Securities ...................................................               428                114                542
   Federal funds sold ...........................................               (45)                 6                (39)
   Interest-bearing deposits in other
      financial institutions ....................................               (27)              --                  (27)
                                                                    ---------------    ---------------    ---------------
Total increase (decrease) in interest
   income .......................................................             1,755                157              1,912
                                                                    ---------------    ---------------    ---------------


Interest-bearing liabilities:
   NOW, savings, and money market
      accounts ..................................................               221                196                417
   Time deposits ................................................               660                136                796
   FHLB advances ................................................                78                (10)                68
   Long-term debt ...............................................                19               --                   19
                                                                    ---------------    ---------------    ---------------
       Total increase (decrease) in interest
             expense ............................................               978                322              1,300
                                                                    ---------------    ---------------    ---------------


   Increase (decrease) in net interest income ...................   $           777    $          (165)   $           612
                                                                    ===============    ===============    ===============
</TABLE>
                                       11
<PAGE>
PROVISION FOR LOAN LOSSES

      Provisions for loan losses are charged to income to bring the total
allowance for loan losses to a level deemed appropriate by management of the
Company based on such factors as the industry diversification of the Company's
commercial loan portfolio, the effect of changes in the local real estate market
on collateral values, the results of recent regulatory examinations, the effects
on the loan portfolio of current economic indicators and their probable impact
on borrowers, the amount of charge-offs for the period, the amount of
nonperforming loans and related collateral security, the evaluation of the
Company's loan portfolio by Independent Bank Services, L.C. and the annual
examination of the Company's financial statements by its independent auditors.
The provision for loan losses for the three months ended March 31, 2000, was
$130,000 compared with $105,000 for the three months ended March 31, 1999, an
increase of $25,000 or 23.8%. Management believes increasing the allowance for
loan losses is prudent as total loans, particularly commercial, construction,
and consumer loans, increase.

NONINTEREST INCOME

      The Company's primary sources of recurring noninterest income are service
charges on deposit accounts and fee income. Noninterest income for the three
months ended March 31, 2000 increased to $877,000 from $662,000 for the three
months ended March 31, 1999, an increase of $215,000 or 32.5%. The increase in
noninterest income for the three months ended March 31, 2000, resulted primarily
from an increase in service charges on deposit accounts due to an increase in
the number of deposit accounts. Additionally, fee income increased from $117,000
for the three months ended March 31, 1999 to $192,000 for the three months ended
March 31, 2000. The increase was primarily due to fee income from the Cash Flow
Manager program initiated in September 1999 and additional legal fee income
generated from the Company's internal legal counsel. Other noninterest income
increased $34,000 during the same period due primarily to additional earnings
generated from the key man life insurance policies that have been in place since
July 1998.

      The following table presents, for the periods indicated, the major
categories of noninterest income (dollars in thousands):

                                                   THREE MONTHS ENDED
                                                        MARCH 31,
                                                ------------------------
                                                   2000          1999
                                                ----------    ----------
                                                       (UNAUDITED)

Service charges on deposit accounts .........   $      542    $      405
Fee income ..................................          192           117
Fiduciary income ............................           25            17
Other noninterest income ....................          152           118
Realized gain on securities .................          (34)            5
                                                ----------    ----------
      Total noninterest income ..............   $      877    $      662
                                                ==========    ==========

                                       12
<PAGE>
NONINTEREST EXPENSES

      Noninterest expenses totaled $3.1 million for the three months ended March
31, 2000 compared with $2.2 million for the three months ended March 31, 1999,
an increase of $892,000 or 40.1%. The following table presents, for the periods
indicated, the major categories of noninterest expenses (dollars in thousands):

                                                      THREE MONTHS ENDED
                                                           MARCH 31,
                                                    -----------------------
                                                       2000        1999
                                                    ----------   ----------
                                                          (UNAUDITED)

      Employee compensation and
        benefits ................................   $    1,770   $    1,268
                                                    ----------   ----------
      Non-staff expenses:
         Net bank premises expense ..............          417          309
         Office and computer supplies ...........          102           51
         Legal and professional fees ............           71          101
         Advertising ............................           69           42
         Postage ................................           39           34
         FDIC insurance .........................           16
         Other ..................................          635          415
                                                    ----------   ----------
            Total non-staff expenses ............        1,349          959
                                                    ----------   ----------
            Total noninterest
              expenses ..........................   $    3,119   $    2,227
                                                    ==========   ==========

      Employee compensation and benefits expense for the three months ended
March 31, 2000 was $1.8 million, an increase of $502,000 or 39.6% compared with
$1.3 million for the same period in 1999. The increase for the three-month
period ended March 31, 2000 was due primarily to normal salary increases and
additional staff placement in the Texarkana, Mt. Pleasant, and Paris locations
to handle customer growth and the recently opened Pittsburg, Sulphur Springs,
and Commerce locations. The number of full-time equivalent employees was 189.0
at March 31, 2000, compared with 135.5 at March 31, 1999, an increase of 39.5%.

      Non-staff expenses were $1.3 million for the three months ended March 31,
2000, compared with $959,000 for the same period in 1999, an increase of
$390,000 or 40.7%. Net bank premises expense increased $108,000 or 35.0% during
the same period to $417,000 due to construction and remodeling projects and the
addition of the new Operations Center in Mt. Pleasant, Texas.

      Other non-staff expenses increased $220,000 or 53.0% to $635,000 as of
March 31, 2000. The primary reason for this increase is the addition of new
locations which, among other expenses, resulted in an increase of $18,000 in
director fees, an increase of $36,000 in supplies expense, an increase of
$23,000 in ATM and debit card expenses, and an increase of $37,000 in
amortization of goodwill.

                                       13
<PAGE>
INCOME TAXES

         Income tax expense increased $20,000 to $185,000 for the three months
ended March 31, 2000 from $165,000 for the same period in 1999. The increase is
primarily a result of fewer tax deductions available from the Company's
leveraged leasing activities. The income stated on the consolidated statement of
earnings differs from the taxable income due to tax-exempt income, the amount of
non-deductible interest expense and the amount of other non-deductible expense.

FINANCIAL CONDITION

LOAN PORTFOLIO

         Gross loans were $259.1 million at March 31, 2000, an increase of $3.9
million or 1.5% from $255.2 million at December 31, 1999. Loan growth occurred
primarily in 1-4 family residential loans, non-residential and non-farmland
loans, and construction and land development loans. Loans comprised 74.1% of
total interest-earning assets at March 31, 2000 compared with 75.9% at December
31, 1999.

         The following table summarizes the loan portfolio of the Company by
type of loan as of March 31, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                                         (DOLLARS IN THOUSANDS)
                                                ----------------------------------------------------------------------
                                                          MARCH 31, 2000                      DECEMBER 31, 1999
                                                ---------------------------------    ---------------------------------
                                                    AMOUNT            PERCENT             AMOUNT           PERCENT
                                                ---------------   ---------------    ---------------   ---------------
                                                           (UNAUDITED)
<S>                                             <C>                         <C>      <C>                         <C>
Commercial and industrial ...................   $        57,890             22.34%   $        61,153             23.96%
Agriculture .................................             8,528              3.29              9,102              3.57
Real estate:
          Construction and land .............             9,188              3.55              7,926              3.11
          1-4 family residential ............            87,755             33.87             83,777             32.83
          Farmland ..........................             7,831              3.02              7,976              3.13
          Non-residential and non-farmland. .            56,387             21.76             52,303             20.49
          Multi-family residential ..........             4,525              1.75              6,239              2.44
Consumer ....................................            27,004             10.42             26,733             10.47
                                                ---------------   ---------------    ---------------   ---------------
                    Total loans .............   $       259,108            100.00%   $       255,209            100.00%
                                                ===============   ===============    ===============   ===============
</TABLE>

ALLOWANCE FOR LOAN LOSSES

         In originating loans, the Company recognizes that it will experience
credit losses and the risk of loss will vary with, among other things, general
economic conditions, the type of loan being made, the creditworthiness of the
borrower over the term of the loan and, in the case of a collateralized loan,
the quality of the collateral for such loan. The Company maintains an allowance
for loan losses in an amount that it believes is adequate for estimated losses
in its loan portfolio. Management determines the adequacy of the allowance
through its evaluation of the loan portfolio. In addition to unallocated
allowances, specific allowances are provided for individual loans when ultimate
collection is considered questionable by management after reviewing the current
status of loans which are contractually past due and considering the net
realizable value of the collateral for the loan. Loans are charged-off against
the allowance for loan losses when appropriate. Although management believes it
uses the best information available to make determinations with respect to the
allowance for loan losses, future adjustments may be necessary

                                       14
<PAGE>
if economic conditions differ from the assumptions used in making the initial
determinations. At March 31, 2000, and December 31, 1999, the allowance for loan
losses totaled $2.5 million or 0.98% of gross loans. The allowance for loan
losses as a percentage of nonperforming loans was 140.29% at March 31, 2000.

      Set forth below is an analysis of the allowance for loan losses for the
periods indicated (dollars in thousands):

<TABLE>
<CAPTION>
                                                                                               THREE MONTHS            YEAR
                                                                                                  ENDED               ENDED
                                                                                                 MARCH 31,          DECEMBER 31,
                                                                                                   2000                1999
                                                                                              ---------------     ---------------
                                                                                                (UNAUDITED)
<S>                                                                                           <C>                 <C>
Average loans outstanding .................................................................   $       257,930     $       213,737
                                                                                              ===============     ===============
Gross loans outstanding at end of period ..................................................   $       259,108     $       255,209
                                                                                              ===============     ===============
Allowance for loan losses at beginning of period ..........................................             2,491               1,512
Provision for loan losses .................................................................               130                 310
Balance acquired with First American Acquisition ..........................................                                   846
Charge-offs:
          Commercial and industrial .......................................................               (82)                (64)
          Real estate .....................................................................               (21)                 (2)
          Consumer ........................................................................               (25)               (267)
Recoveries:
          Commercial and industrial .......................................................                22                  65
          Real estate .....................................................................                 8                  42
          Consumer ........................................................................                26                  49
                                                                                              ---------------     ---------------
Net loan (charge-offs) recoveries .........................................................               (72)               (177)
                                                                                              ---------------     ---------------

Allowance for loan losses at end of period ................................................   $         2,549     $         2,491
                                                                                              ===============     ===============

Ratio of allowance to end of period loans .................................................              0.98%               0.98%
Ratio of net charge-offs to average loans .................................................              0.03%               0.08%
Ratio of allowance to end of period nonperforming loans ...................................            140.29%             244.94%
</TABLE>

                                       15
<PAGE>


NONPERFORMING ASSETS

      Nonperforming assets were $2.0 million at March 31, 2000 compared with
$1.1 million at December 31, 1999. Four lines of credit totaling $1.3 million
were added to nonaccrual loans during the quarter ended March 31, 2000, while
three lines of credit were removed totaling $560,000. Management anticipates
minimal losses on the total of these new nonperforming assets.

      The ratio of nonperforming assets to total loans and other real estate was
0.76% and 0.43% at March 31, 2000, and December 31, 1999, respectively.

       The following table presents information regarding nonperforming assets
as of the dates indicated (dollars in thousands):

                                                 MARCH 31,        DECEMBER 31,
                                                   2000              1999
                                              ---------------   ---------------
                                                (UNAUDITED)

Nonaccrual loans ..........................   $         1,185   $           443
Accruing loans 90 or more days past due ...               632               574
                                              ---------------   ---------------
          Total nonperforming loans .......             1,817             1,017
Other real estate .........................               157                79
                                              ---------------   ---------------
          Total nonperforming assets ......   $         1,974   $         1,096
                                              ===============   ===============

SECURITIES

      Securities totaled $81.3 million at March 31, 2000, an increase of $1.5
million from $79.8 million at December 31, 1999. At March 31, 2000, securities
represented 21.1% of total assets compared with 21.5% of total assets at
December 31, 1999. The yield on average securities for the three months ended
March 31, 2000, was 6.69% compared with 6.11% for the same period in 1999. At
March 31, 2000, securities included $27.9 million in U.S. Government securities,
$29.9 million in mortgage-backed securities, $16.6 million in collateralized
mortgage obligations, $1.6 million in equity securities, and $5.3 million in
municipal securities. The average life of the securities portfolio at March 31,
2000, was approximately five years.

PREMISES AND EQUIPMENT

      Premises and equipment totaled $13.0 million at March 31, 2000 and $11.7
million at December 31, 1999. The net change reflects an increase of $1.3
million or 11.8%, in fixed assets. The increase is primarily due to the
capitalized construction cost incurred for the Mt. Pleasant Operations Center,
the new full-service bank location in Pittsburg, Texas, and major remodeling
projects in the Sulphur Springs, Commerce, and Mt. Pleasant, Texas locations.

OTHER ASSETS

      On July 1, 1998, the Company invested $3.1 million in single insurance
premium policies, which insure the lives of certain senior officers of the
Company. As of March 31, 2000, and December 31, 1999, the net surrender values
of these policies totaled $3.9 million. Goodwill recorded in connection with the
First American Acquisition in September 1999, the Deport Acquisition in 1992 and
the Bogata Acquisition in 1993 totaled $3.1 million at March 31, 2000, and at
December 31, 1999.

                                       16
<PAGE>
DEPOSITS

      At March 31, 2000, demand, money market and savings deposits accounted for
approximately 45.0% of total deposits, while certificates of deposit made up
55.0% of total deposits. Noninterest-bearing demand deposits totaled $59.1
million or 17.5% of total deposits at March 31, 2000, compared with $56.4
million or 17.2% of total deposits at December 31, 1999. The average cost of
deposits, including noninterest-bearing demand deposits, was 4.11% for the three
months ended March 31, 2000 compared with 3.69% for the same period in 1999.

LIQUIDITY

      The Company's Asset/Liability Management Policy is intended to maintain
adequate liquidity for the Company. Liquidity involves the Company's ability to
raise funds to support asset growth or reduce assets to meet deposit withdrawals
and other payment obligations, to maintain reserve requirements and otherwise to
operate the Company on an ongoing basis. The Company's liquidity needs are
primarily met by growth in core deposits. Although access to purchased funds
from correspondent banks is available and has been utilized on occasion to take
advantage of investment opportunities, the Company does not rely on these
external-funding sources. The cash and federal funds sold position, supplemented
by amortizing investments along with payments and maturities within the loan
portfolio, has historically created an adequate liquidity position.

      The Company's cash flows are composed of three classifications: cash flows
from operating activities, cash flows from investing activities, and cash flows
from financing activities. As summarized in the Condensed Consolidated
Statements of Cash Flow, the most significant transactions which affected the
Company's level of cash and cash equivalents, cash flows, and liquidity during
the first quarter of 2000 were the net increase in federal funds sold of $8.0
million, the net increase in loans of $4.3 million, securities purchases of $9.7
million, securities sales of $5.3 million, the net increase in deposits of $10.1
million, and proceeds from the issuance of long-term debt of $7.0 million.

CAPITAL RESOURCES

      Total shareholders' equity as of March 31, 2000, was $28.7 million, an
increase of $231,000 or 0.81% compared with shareholders' equity of $28.5
million at December 31, 1999. This increase was due to earnings for the period
of $545,000 less a decrease in accumulated comprehensive income of $314,000.

      Both the Board of Governors of the Federal Reserve System ("Federal
Reserve"), with respect to the Company, and the Federal Deposit Insurance
Corporation ("FDIC"), with respect to the Bank, have established certain minimum
risk-based capital standards that apply to bank holding companies and federally
insured banks, respectively. As of March 31, 2000, the Company's Tier 1
risk-based capital, total risk-based capital and leverage capital ratios were
12.38%, 13.34%, and 8.65%, respectively. As of March 31, 2000, the Bank's
risk-based capital ratios remain above the levels required for the Bank to be
designated as "well capitalized" by the FDIC with Tier 1 risk-based capital,
total risk-based capital and leverage capital ratios of 9.27%, 10.23%, and
6.52%, respectively.

YEAR 2000 PREPAREDNESS

      The Company successfully completed the Year 2000 changeover without any
problems in its core business processes. The Company has confirmed normal
business operations across all products and markets on a sustained basis.

      While management believes it is unlikely, problems associated with
non-compliant third parties could still occur. Management will continue to
monitor all business processes and relationships with third parties during 2000
to ensure that all processes continue to function properly.

                                       17
<PAGE>
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     There have been no material changes in the market risk information
disclosed in the Company's Form 10-K for the year ended December 31, 1999. See
Form 10-K, Item 7, "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Interest Rate Sensitivity and Liquidity."

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (a)  None

         (b)  None

         (c)  None

         (d)  None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibit - 11, Statement regarding computation of earnings per
             share. Exhibit - 27, Financial Data schedule.

         (b) Reports on Form 8-K

             Form 8-K was filed on January 25, 2000. Under Item 4, changes in
             Registrant's Certifying Accountant, the Company announced the
             dismissal of Arnold, Walker, Arnold & Co., P.C. as its independent
             auditors effective upon the completion of the audit of the
             Company's 1999 financial statements. Additionally, the Company
             announced the engagement of Fisk & Robinson, P.C. to serve as the
             Company's independent auditors for the 2000 financial statements.

             Form 8-K/A was filed on February 25, 2000. The Company amended the
             prior Form 8-K filed on January 25, 2000 to report February 23,
             2000 as the effective date of dismissal of Arnold, Walker, Arnold &
             Co., P.C. as the Company's independent auditors.

                                       18
<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       GUARANTY BANCSHARES, INC.
                                       (Registrant)

Date:  May 15, 2000                    By: /s/  ARTHUR B. SCHARLACH
                                       -------------------------------
                                       Arthur B. Scharlach, Jr.
                                       President
                                       (Principal Executive Officer)

Date:  May 15, 2000                    By: /s/  CLIFTON A. PAYNE
                                       -------------------------------
                                       Clifton A. Payne
                                       Senior Vice President and Chief
                                       Financial Officer
                                       (Principal Financial Officer)

                                       19
<PAGE>
                                INDEX TO EXHIBITS

EXHIBIT
NUMBER   DESCRIPTION                                    PAGE NUMBER
-------  -----------                                    -----------
10       Amended and Restated Declaration of Trust -
           Guaranty (TX) Trust I - Dated as of March
           23, 2000                                     23

11       Statement regarding computation                Reference is hereby made
           of earnings per share                        to Note 2 of Notes to
                                                        Interim Consolidated
                                                        Financial Statements on
                                                        page 6 hereof.


27       Financial Data Schedule                        21

                                       20