UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934



For Quarter Ended                                   Commission File No. 33-76064
June 30, 1999




                         GUARANTY FINANCIAL CORPORATION




         Virginia                                                54-1786496
(State or other Jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)



                1658 State Farm Blvd., Charlottesville, VA 22911
                     (Address of Principal Executive Office)


                                 (804) 970-1100
              (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 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.  Yes _X_ No ___ (not  subject to filing  requirements  for the
past 90 day days).

         As of August 3,  1999,  1,501,727  shares  of the  Registrant's  Common
Stock, par value $1.25 per share, were outstanding.



<PAGE>


                         GUARANTY FINANCIAL CORPORATION

                         QUARTERLY REPORT ON FORM 10-QSB

                                      INDEX
<TABLE>
<CAPTION>
<S>                                                                                           <C>
Part I.  Financial Information                                                                Page No.

Item 1   Financial Statements

         Consolidated Balance Sheets
         as of June 30, 1999 (unaudited) and December 31, 1998                                   3

         Consolidated Statements of Operations for the
         Three and Six Months Ended June 30, 1999 and 1998 (unaudited)                           4

         Consolidated Statements of Comprehensive Income
         For the Six Months Ended June 30, 1999 and 1998 (unaudited)                             5

         Consolidated Statements of Cash Flows for the
         Six Months Ended June 30, 1999 and 1998 (unaudited)                                     6

         Notes to Consolidated Financial Statements (unaudited)                                  8

Item 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                                     9

Part II.  Other Information

Item 1   Legal Proceedings                                                                       13

Item 2   Changes in Securities                                                                   13

Item 3   Defaults upon Senior Securities                                                         13

Item 4   Submission of Matters to a Vote of Security Holders                                     13

Item 5   Other Information                                                                       13

Item 6   Exhibits and Reports on Form 8-K                                                        13

         Signatures                                                                              14

</TABLE>



                                       2
<PAGE>

Part I.  Financial Information

Item 1   Financial Statements


                         GUARANTY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                           JUNE 30,               DECEMBER 31,
                                                                             1999                     1998
                                                                    -----------------------  -----------------------
                                                                          (Unaudited)
<S>                                                                        <C>                       <C>
ASSETS
Cash and cash equivalents                                                  $       13,943            $      10,527
Investment securities
   Held-to-maturity                                                                 1,669                    2,344
   Available for sale                                                              29,910                   26,638
   Trading                                                                          2,949                    1,000
Investment in FHLB stock, at cost                                                   1,500                    1,300
Investment in FRB stock, at cost                                                      271                      271
Loans receivable, net                                                             185,835                  162,369
Accrued interest receivable                                                         1,733                    1,651
Real estate owned                                                                   1,021                      488
Office properties and equipment, net                                                8,376                    7,050
Mortgage servicing rights                                                           2,902                    1,978
Other assets                                                                        1,805                    1,404
                                                                    -----------------------  -----------------------
         Total assets                                                      $      251,914            $     217,020
                                                                    =======================  =======================

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
   NOW/MMDA accounts                                                       $       57,991            $      45,752
   Savings accounts                                                                11,002                    9,863
   Certificates of deposit                                                        124,990                  117,190
                                                                    -----------------------  -----------------------
                                                                                  193,983                  172,805
Bonds payable                                                                       1,209                    1,786
Advances from Federal Home Loan Bank                                               30,000                   21,000
Securities sold under agreement to repurchase                                       2,937                    1,009
Other borrowings                                                                    4,188                        -
Accrued interest payable                                                              125                      125
Income taxes payable                                                                   34                      243
Payments by borrowers for taxes and insurance                                         638                      128
Other liabilities                                                                     707                      470
                                                                    -----------------------  -----------------------
         Total liabilities                                                        233,821                  197,566
                                                                    -----------------------  -----------------------

Convertible preferred securities                                                    6,900                    6,900

STOCKHOLDERS' EQUITY
Preferred stock, par value $1 per share, 500,000
   shares authorized, none issued                                                       -                        -
Common stock, par value $1.25 per share,
   4,000,000 shares authorized, 1,501,383
   issued and outstanding                                                           1,877                    1,877
Additional paid-in capital                                                          5,725                    5,725
Net unrealized gain (loss) on securities
   available for sale                                                              (1,617)                      89
Retained earnings                                                                   5,208                    4,863
                                                                    -----------------------  -----------------------
         Total stockholders' equity                                                11,193                   12,554
                                                                    -----------------------  -----------------------
Total liabilities and stockholders' equity                                 $      251,914            $     217,020
                                                                    =======================  =======================
</TABLE>



                                       3
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                        Three Months Ended                Six Months Ended
                                                             June 30,                         June 30,
                                                   ------------------------------   ------------------------------
                                                       1999             1998            1999             1998
                                                   -------------    -------------   -------------    -------------
                                                            (unaudited)                      (unaudited)
<S>                                                <C>              <C>             <C>              <C>
Interest income
   Loans                                               $  3,928          $ 2,511         $ 7,256         $  4,666
   Investment securities                                    751              445           1,329              798
                                                   -------------    -------------   -------------    -------------
Total interest income                                     4,679            2,956           8,585            5,464
                                                   -------------    -------------   -------------    -------------

Interest expense
   Deposits                                               2,064            1,466           4,079            2,896
   Borrowings                                               585              287           1,096              361
                                                   -------------    -------------   -------------    -------------
Total interest expense                                    2,649            1,753           5,175            3,257
                                                   -------------    -------------   -------------    -------------

Net interest income                                       2,030            1,203           3,410            2,207

Provision for loan losses                                   105               44             165               87
                                                   -------------    -------------   -------------    -------------

Net interest income after provision
   for loan losses                                        1,925            1,159           3,245            2,120

Other income
   Loan fees and servicing income                           199               97             287              194
   Gain (loss) on sale of loans and securities             (263)             129             231              524
   Service fees on checking                                 127               98             252              163
   Other                                                     95               51             182               99
                                                   -------------    -------------   -------------    -------------
Total other income                                          158              375             952              980
                                                   -------------    -------------   -------------    -------------

Other expenses
   Personnel                                                895              591           1,831            1,071
   Occupancy                                                234              236             449              485
   Data processing                                          143              114             308              227
   Deposit insurance premiums                                 6               11               9               11
   Other                                                    423              293             805              616
                                                   -------------    -------------   -------------    -------------
Total other expenses                                      1,701            1,245           3,402            2,410
                                                   -------------    -------------   -------------    -------------

Income before income taxes                                  382              289             795              690
                                                   -------------    -------------   -------------    -------------

Provision for income taxes                                  130              105             270              261
                                                   -------------    -------------   -------------    -------------

Net income                                              $   252           $  184          $  525           $  429
                                                   =============    =============   =============    =============

Basic and diluted earnings per
   common share                                         $  0.17          $  0.12         $  0.35          $  0.30
                                                   =============    =============   =============    =============
</TABLE>



                                       4
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In Thousands)

<TABLE>
<CAPTION>

                                                                     Three Months Ended           Six Months Ended
                                                                          June 30,                    June 30,
                                                                  --------------------------  -------------------------
                                                                     1999          1998          1999          1998
                                                                  ------------  ------------  ------------  -----------
                                                                          (unaudited)                 (unaudited)
<S>                                                               <C>           <C>           <C>           <C>
Net Income                                                        $       252   $       184   $       525   $      429
                                                                  ------------  ------------  ------------  -----------

Other comprehensive income, net of tax effect:
   Unrealized gains (loss) on securities available for sale       $    (1,420)  $       133   $    (2,473)  $      (67)
   Less: reclassification adjustment for gains included
       in net income                                                        -             -           113           62
                                                                  ------------  ------------  ------------  -----------

Other comprehensive income (loss), before tax                          (1,420)          133        (2,586)        (129)

Income tax (expense) benefit related to items of other
   comprehensive income                                                   482            45           880           49
                                                                  ------------  ------------  ------------  -----------

Other comprehensive income net of tax                                    (938)           88        (1,706)         (80)
                                                                  ------------  ------------  ------------  -----------

Comprehensive Income (loss)                                         $    (686)  $       272     $  (1,181)  $      349
                                                                  ============  ============  ============  ===========
</TABLE>





                                       5
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six Months Ended June 30, 1999 and 1998
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                                   1999         1998
                                                                               -------------------------
                                                                                     (unaudited)
<S>                                                                            <C>           <C>
Operating Activities
      Net Income                                                               $      525    $      429
      Adjustments to reconcile net income to net cash provided
          (absorbed) by operating activities:
          Provision for loan losses                                                   165            87
          Depreciation and amortization                                               328           223
          Amortization of deferred loan fees                                          134            88
          Net amortization of premiums and accretion of discounts                     165            35
          Loss (gain) on sale of loans                                               (350)         (514)
          Originations of loans held for sale                                     (25,687)      (25,986)
          Proceeds from sale of loans                                              26,038        26,662
          Loss (gain) on sale of securities available for sale                       (152)         (113)
          (Gain) loss on trading securities                                           273           126
          Purchase of trading securities                                          (58,471)      (42,381)
          Sales of trading securities                                              56,312        41,296
          Other, net                                                                    -          (226)
          Changes in:
              Accrued interest receivable                                             (82)         (550)
              Other assets                                                           (847)         (505)
              Accrued interest payable                                                  1            75
              Prepayments by borrowers for taxes and insurance                        510           (26)
              Other liabilities                                                        32           815
                                                                               -----------   -----------

Net cash provided (absorbed) by operating activities                               (1,106)         (465)
                                                                               -----------   -----------

Investing activities
      Net (increase) decrease in loans                                            (24,297)      (22,637)
      Mortgage-backed securities principal repayments                                 672           500
      Proceeds from sale of securities available for sale                           4,289        25,552
      Purchase of securities available for sale                                    (9,236)      (30,364)
      Redemption (purchase) of FHLB stock                                            (200)            -
      Purchase of servicing rights                                                   (515)            -
      Purchases of office properties and equipment                                 (1,623)         (661)
                                                                               -----------   -----------

Net cash provided (absorbed) by investing activities                              (30,910)      (27,610)
                                                                               -----------   -----------




                                       6
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

Financing activities
      Net increase (decrease) in deposits                                          21,177        15,121
      Proceeds from FHLB advances                                                   9,000        10,000
      Repayment of FHLB advances                                                        -             -
      Increase (decrease) in securities sold under agreement to repurchase          1,928          (999)
      Proceeds from other borrowings                                                4,188             -
      Proceeds from the issuance of common stock, net                                   -             -
      Proceeds from the issuance convertible preferred securities, net                  -         6,400
      Dividends paid on common stock                                                 (180)          (45)
      Principal payments on bonds payable, including unapplied payments              (681)         (134)
                                                                               -----------   -----------

Net cash provided (absorbed) by financing activities                               35,432        30,343
                                                                               -----------   -----------

Increase (decrease) in cash and cash equivalents                                    3,416         2,268

Cash and cash equivalents, beginning of period                                     10,527         5,917
                                                                               -----------   -----------

Cash and cash equivalents, end of period                                         $  3,943     $   8,185
                                                                               ===========   ===========
</TABLE>





                                       7
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Six Months ended June 30, 1999 and 1998



Note 1        Principles of Consolidation

The  accompanying  consolidated  financial  statements  include the  accounts of
Guaranty  Financial   Corporation  (the   "Corporation")  and  its  wholly-owned
subsidiaries,  Guaranty Capital Trust I and Guaranty Bank (the "Bank"),  and the
Bank's wholly-owned subsidiaries, GMSC, Inc., which was organized as a financing
subsidiary,  and  Guaranty  Investments  Corp.,  which  was  organized  to  sell
insurance  annuities and other  non-deposit  investment  products.  All material
intercompany accounts and transactions have been eliminated in consolidation.

Note 2        Basis of Presentation

In the opinion of management,  the accompanying  unaudited interim  consolidated
financial  statements  contain  all  adjustments   (consisting  only  of  normal
recurring  accruals)  necessary to present  fairly the financial  position as of
June 30,  1999 and the  results of  operations  and cash  flows for the  interim
periods ending June 30, 1999 and 1998.  All 1999 interim  amounts are subject to
year-end  audit,  and the results of operations  for the interim  periods is not
necessarily indicative of the results of operations to be expected for the year.





                                       8
<PAGE>

ITEM 2               MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Expansion of Existing Branch Network

The  opening  of a full  service  branch  in  Henrico  County,  Virginia  in the
Wellesley development is expected to occur by mid September 1999. This office is
our  first  entry  into the west  Richmond  market  and will be large  enough to
accommodate a regional loan group along with the retail operation.

A site has been obtained in the Forest Lakes  development in northern  Albemarle
County for a full service branch office.  Regulatory  approval has been granted,
and an early 2000 opening is anticipated.


Changes in Financial Condition

Deposit growth,  and proceeds from Federal Home Loan Bank (the "FHLB")  advances
and other borrowings enabled Guaranty to increase assets. Total assets increased
by $34.9 million,  or 16.1%,  from $217.0 million at December 31, 1998 to $251.9
million at June 30,  1999.  These  proceeds  were  primarily  invested in loans,
investment-grade   corporate  bonds  and  short-term  interest  earning  deposit
accounts.

Cash and cash equivalents  increased $3.4 million, or 32.4%, to $13.9 million at
June 30, 1999 from $10.5 million at December 31, 1998. This increase in cash was
primarily  due to the  combination  of increased  deposits,  proceeds  from FHLB
advances and other borrowings, and proceeds from loan sales

Investment  securities at June 30, 1999  increased  $4.5 million,  or 15.0%,  to
$34.5  million  from $30.0  million at December  31,  1998.  This  increase  was
primarily a result of the purchase of $3.3 million in investment-grade corporate
bonds and  increase of $1.9  million in  treasury  notes  classified  as trading
securities which were offset by principal  payments received on  mortgage-backed
securities  of  approximately  $700  thousand.  At  the  dates  indicated,   the
investment portfolio was comprised of the following:
<TABLE>
<CAPTION>
                                                               June 30,               December 31,
                                                                 1999                     1998
                                                        -----------------------   ----------------------
<S>                                                                 <C>                     <C>
         Mortgage-backed securities
            classified as held-to-maturity                          $    1,669              $     2,344
         Corporate bonds classified
            as available-for-sale                                       30,181                   26,909
         US Treasury Notes classified
            as trading                                                   2,949                    1,000
                                                        -----------------------   ----------------------
                                                                    $   34,799              $    30,253
                                                        =======================   ======================
</TABLE>

Net loans were $185.8 million at June 30, 1999, an increase of $23.5 million, or
14.5%,  from net loans of $162.4 million at December 31, 1998. During the second
quarter of 1999, the bank continued to underwrite  substantially  all fixed rate
residential  mortgage  loans for  immediate  sale in the secondary  market.  The
primary  focus of portfolio  lending  continues to be  prime-based  construction
loans (including  builder lines of credit),  commercial real estate and business
loans and  consumer  loans which are  typically  priced 175 to 250 basis  points
above  fixed-rate  residential  loans.  The increase in the loan  portfolio  was
primarily  related to new  commercial  and consumer  loan  business and a slight
increase in residential mortgage loans.



                                       9
<PAGE>

Real estate  owned of $488  thousand  at  December  31, 1998 was sold during the
second  quarter of 1999. No unreserved  losses were  recognized on this sale. At
June 30, 1999,  real estate owned was comprised of three secured lines of credit
to one  individual  who  has  filed  for  bankruptcy.  No  material  losses  are
anticipated on the ultimate sale of the properties.

Deposits were $194.0 million at June 30, 1999, an increase of $21.2 million,  or
10.9%,  from total deposits of $172.8 million at December 31, 1998. The majority
of this growth was due to an increase in certificates of deposit of $7.8 million
or 6.7%,  an increase in money  market  accounts of $7.2 million or 32.1% and an
increase in NOW accounts of $5.1 million or 21.7%.  Management plans to continue
its  marketing  efforts  aimed  at  corporate  customers  as well as  individual
checking,  savings and money  market  accounts  to attract  lower cost funds and
reduce reliance on certificates of deposit as a primary funding source. However,
no  assurances  can be given that these  strategies  will be  successful  or, if
successful,  will  reduce the bank's  reliance on  certificates  of deposit as a
primary funding source.

Office properties and equipment increased $326 thousand since December 31, 1998.
This increase was primarily due to capital expenditures  relating to upgrades in
computer technology to achieve Y2K compliance,  establish a wide area network to
connect all  branches and  hardware  related to new products and services  being
offered.  There were also expenditures relating to the purchase and improvements
of the branch sites at Wellesley in Henrico County, Virginia and Forest Lakes in
Albemarle County, Virginia.

At June  30,  1999,  $30.0  million  in  advances  were  borrowed  from the FHLB
short-term basis and $4.2 million in federal funds purchased. These advances are
comprised  entirely of daily rate credits  which  reprice  based on the previous
days Federal Funds rate.


Results of Operations

Net Income

Guaranty  reported  net income of $525  thousand  and $429  thousand for the six
months  ended June 30, 1999 and 1998,  respectively  and $252  thousand and $184
thousand for the three months  ended June 30, 1999 and 1998,  respectively.  The
increase in both  periods is due  primarily to  increased  net  interest  income
coupled with  increased  loan fees and  servicing  income  which were  partially
offset by additional costs relating to the overall growth of Guaranty.


Net Interest Income

Net  interest  income was $2.0 million for the quarter  ended June 30, 1999,  up
68.7% from the $1.2 million earned during the same period in 1998. For the first
six months of 1999, net interest income was $3.2 million,  a 53.1% increase over
the first six  months of 1998.  For the six  months  ended  June 30,  1999,  the
average  balance  and  average  yield on loans was  $175.0  million  and  8.29%,
respectively,  compared to $106.8 million and 8.56% for the same period in 1998.
Loan growth is primarily related to prime based residential  construction loans,
including  builder lines of credit,  and commercial  loans located in the bank's
primary market of central Virginia.

The average balance of interest bearing deposits increased to $211.1 million for
the first six months of 1999 from  $123.1  million  for the same period in 1998.
However,  the  corresponding  average rate paid on these  deposits  decreased 24
basis points to 4.90% from 5.14% during the same periods.


Provision for Loan Losses

Management  analyzes the potential  risk of loss on Guaranty's  loan  portfolio,
given  the  loan  balances  and the  value  of the  underlying  collateral.  The
allowance  for  loan  losses  is  reviewed  monthly  and is



                                       10
<PAGE>

based on the loan  classification  system,  which  classifies  problem  loans as
substandard,  doubtful,  or loss.  Additional  provisions  are added when deemed
necessary by management. Based on this evaluation, Guaranty recorded a provision
of $105  thousand for the three  months ended June 30, 1999,  and a provision of
$44 thousand for the same period in 1998.  For the six-month  periods ended June
30,  1999 and 1998,  Guaranty  recorded a  provision  of $165  thousand  and $87
thousand,  respectively. As of June 30, 1999 the total allowance for loan losses
was $1.1 million.


Non-Interest Income

Non-interest  income was $158  thousand for the second  quarter 1999 compared to
$375  thousand for the same period in 1998.  For the six months  ending June 30,
1999,  non-interest  income was $952  thousand,  down $28 thousand from the $1.0
million  reported  during the same period in 1998. This decrease was primarily a
result of a $293 thousand decrease in gains on the sale of loans and securities.
In addition, 1999 amounts were positively impacted by increased late charge fees
and application fees.


Non-Interest Expense

Operating  expenses during the second quarter of 1999 were $1.7 million,  a $456
thousand  increase over those incurred  during the same quarter of 1998. For the
six months ending June 30, 1999,  operating  expenses were $3.4 million compared
to $2.4 million  during the same period in 1998.  These  increases are primarily
attributable  to the increased size of the bank and expansion of the residential
and commercial lending divisions.


Income Tax Expense

Guaranty  recognized  income tax expense of $130  thousand  for the three months
ended June 30,  1999,  compared  to $105  thousand  for the same period in 1998.
Guaranty recognized income tax expense of $270 thousand for the six months ended
June 30, 1999, compared to $261 thousand for the same period in 1998. Changes in
tax expense  between  periods are  primarily a result of changes in the level of
taxable income.


Liquidity and Capital Resources

Liquidity is the ability to meet present and future financial obligations either
through the sale of existing  assets or through the  acquisition  of  additional
funds through  asset and liability  management.  Guaranty's  primary  sources of
funds are deposits,  borrowings and amortization,  prepayments and maturities of
outstanding loans and securities. While scheduled payments from the amortization
of loans and  securities are relatively  predictable  sources of funds,  deposit
flows and loan  prepayments  are greatly  influenced by general  interest rates,
economic  conditions  and  competition.  Excess  funds are invested in overnight
deposits to fund cash requirements experienced in the normal course of business.
Guaranty has been able to generate  sufficient cash through its deposits as well
as through its borrowings.

Guaranty  uses its sources of funds  primarily  to meet its  on-going  operating
expenses,  to pay deposit withdrawals and to fund loan commitments.  At June 30,
1999,  total  approved loan  commitments  outstanding  were  approximately  $2.1
million.  At the same  date,  commitments  under  unused  lines of  credit  were
approximately $38.5 million.  Certificates of deposit scheduled to mature in one
year or less at June 30, 1999 were $104.1  million.  Management  believes that a
significant portion of maturing deposits will remain with Guaranty.




                                       11
<PAGE>

At June 30,  1999,  regulatory  capital  was in excess of  amounts  required  by
Federal Reserve  Regulations to be considered  well  capitalized as shown in the
following table:

          Tier 1 risk based                                     8.06%
          Total risk based                                      9.83%
          Tier 1 to average adjusted total assets               6.91%

Year 2000 Project

The Year 2000 ("Y2K")  issue relates to whether  computer  systems will properly
recognize and process date  sensitive  information on and after January 1, 2000.
Systems that do not properly recognize such information could generate erroneous
data or fail.  Guaranty is heavily  dependent on computer systems in the conduct
of substantially all of its business activities.

Guaranty has a Y2K Committee,  a Y2K  Implementation  Plan and a Y2K Contingency
Plan.  The Y2K Plans,  as  recommended  by the  Federal  Financial  Institutions
Examination Council ("FFIEC"), are based on five phases: Awareness,  Assessment,
Renovation, Validation and Implementation.

In accordance with current FFIEC regulations,  Guaranty  successfully  completed
testing of all  software and hardware  used in the course of its  business.  The
tests were  completed  before the FFIEC's June 30, 1999  deadline,  and the test
results  were  reported  to  Guaranty's  Board of  Directors  on July 20,  1999.
Guaranty has also completed a comprehensive  contingency plan, and this plan and
all test results were reviewed by the Virginia  State  Corporation  Commission's
Y2K  examiner.   The  review  yielded  the  highest  rating  for  Y2K  readiness
(satisfactory).

Additionally,  notifications  of the test  results were sent out to customers in
June 1999, and Guaranty has trained all customer contact employees on responding
to customer  concerns  over Y2K issues.  Guaranty and the Y2K  Committee  remain
committed to the continued  research and review of any  potential  problems that
may arise between now and the year 2000.

Successful  and timely  completion  of the Y2K project is based on  management's
best estimates  derived from various  assumptions  of future  events,  which are
inherently  uncertain,  including the testing of results of the core  processing
system maintained by a third party service bureau, and readiness of all vendors,
suppliers and  customers.  No assurance can be given that the  transition to the
year 2000 can be completed successfully, in which case Guaranty could incur data
processing  delays,  mistakes or failures.  These  delays,  mistakes or failures
could have a significant adverse impact on Guaranty's financial statements.





                                       12
<PAGE>

Part II.  Other Information


Item 1        Legal Proceedings
                      Not Applicable

Item 2        Changes in Securities
                      Not Applicable

Item 3        Defaults Upon Senior Securities
                      Not Applicable

Item 4        Submission of Matters to a Vote of Security Holders

         On May 12, 1999,  Guaranty's Annual Meeting of Shareholders was held to
elect four directors to serve on its Board of Directors for terms of three years
each. The results of the votes are as follows:

                                                        For           Withheld
              For Term Expiring in 2002                 ---           --------
              -------------------------
                Thomas P. Baker                      1,263,190         27,964
                Jason I. Eckford, Jr.                1,280,754         10,400
                Harry N. Lewis                       1,280,754         10,400
                John B. Syer                         1,280,754         10,400


Item 5        Other Information
                      Not Applicable

Item 6        Exhibits and Reports on 8-K

              (a)  Exhibits

                   27    Financial Data Schedule
                         (filed electronically only)

              (b)  Reports on Form 8-K - None




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<PAGE>

                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934, the registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.



                                          GUARANTY FINANCIAL CORPORATION







Date: August 13, 1999                     By: /s/ Thomas P. Baker
                                             -----------------------------------
                                              Thomas P. Baker
                                              President, CEO and Director


                                          By: /s/ L. Ben Johnson
                                             -----------------------------------
                                              L. Ben Johnson
                                              Vice President & Controller





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