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. 0-25905
March 31, 2000




                         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 April  18,  2000,  1,961,727  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>
Part I.  Financial Information                                                             Page No.
------------------------------                                                             --------
<S>                                                                                           <C>
Item 1   Financial Statements

         Consolidated Balance Sheets
         as of March 31,2000 (unaudited) and December 31, 1999                                 3

         Consolidated Statements of Operations for the
         Three Months Ended March 31, 2000 and 1999 (unaudited)                                4

         Consolidated Statements of Comprehensive Income
         For the Three Months Ended March 31, 2000 and 1999 (unaudited)                        5

         Consolidated Statements of Cash Flows for the
         Three Months Ended March 31, 2000 and 1999 (unaudited)                                6

         Notes to Consolidated Financial Statements                                            7

Item 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                                   8

Part II. Other Information
--------------------------

Item 1   Legal Proceedings                                                                    11

Item 2   Changes in Securities                                                                11

Item 3   Defaults upon Senior Securities                                                      11

Item 4   Submission of Matters to a Vote of Security Holders                                  11

Item 5   Other Information                                                                    11

Item 6   Exhibits and Reports on Form 8-K                                                     11

         Signatures                                                                           12

</TABLE>




                                       2
<PAGE>
                         PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                          GUARANTY FINANCIAL CORPORATION
                            CONSOLIDATED BALANCE SHEETS
                                  (In Thousands)
<TABLE>
<CAPTION>
                                                      March 31,        December 31,
                                                        2000               1999
                                                    -------------      -------------
<S>                                                 <C>                <C>
ASSETS                                               (Unaudited)
Cash and cash equivalents                           $     12,887       $     12,634
Investment securities
   Held-to-maturity                                        1,296              1,336
   Available for sale                                     22,361             22,197
Investment in FHLB stock at, cost                          1,550              1,500
Loans receivable, net                                    220,281            205,399
Accrued interest receivable                                2,019              1,743
Real estate owned                                            803                843
Office properties and equipment, net                       9,288              9,331
Mortgage servicing rights                                    654                568
Other assets                                               1,998              3,788
                                                    -------------      -------------
          Total assets                              $    273,137       $    259,339
                                                    =============      =============

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
   NOW/MMDA accounts                                $     59,483       $     58,083
   Savings accounts                                       11,458             11,203
   Certificates of deposit                               149,813            130,308
                                                    -------------      -------------
                                                         220,754            199,594
Bonds payable                                                918                903
Advances from Federal Home Loan Bank                      25,000             20,000
Securities sold under agreement to repurchase              4,488             16,650
Accrued interest payable                                     415                258
Payments by borrowers for taxes and insurance                542                494
Other liabilities                                            475              1,099
                                                    -------------      -------------
          Total liabilities                              252,592            238,998
                                                    -------------      -------------

COMMITMENTS & CONTINGENCIES
Convertible preferred securities                           6,012              6,075

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, 1,961,727
   issued and outstanding                                  2,452              2,452
Additional paid-in capital                                 8,953              8,943
Accumulated comprehensive income (loss)                   (1,478)            (1,608)
Retained earnings                                          4,606              4,479
                                                    -------------      -------------
          Total stockholders' equity                      14,533             14,266
                                                    -------------      -------------
Total liabilities and stockholders' equity          $    273,137       $    259,339
                                                    =============      =============
</TABLE>




                                       3
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                     March 31,
                                                         ----------------------------------
                                                              2000               1999
                                                         ---------------    ---------------
                                                                    (unaudited)
<S>                                                      <C>                <C>
Interest income
   Loans                                                 $        4,768     $        3,328
   Investment securities                                            559                578
                                                         ---------------    ---------------
Total interest income                                             5,327              3,906
                                                         ---------------    ---------------

Interest expense
   Deposits                                                       2,362              2,015
   Borrowings                                                       657                511
                                                         ---------------    ---------------
Total interest expense                                            3,019              2,526
                                                         ---------------    ---------------

Net interest income                                               2,308              1,380

Provision for loan losses                                           130                 60
                                                         ---------------    ---------------

Net interest income after provision
      for loan losses                                             2,178              1,320

Other income
   Loan and deposit fees and servicing income                       164                213
   Gain (loss) on sale of loans and securities                      (71)               494
   Other                                                            121                 87
                                                         ---------------    ---------------
Total other income                                                  214                794
                                                         ---------------    ---------------

Other expenses
   Personnel                                                      1,043                968
   Occupancy                                                        221                180
   Data processing                                                  219                165
   Deposit insurance premiums                                        59                  3
   Other                                                            480                385
                                                         ---------------    ---------------
Total other expenses                                              2,022              1,701
                                                         ---------------    ---------------

Income before income taxes                                          370                413
                                                         ---------------    ---------------

Provision for income taxes                                          126                140
                                                         ---------------    ---------------

Net income                                               $          244     $          273
                                                         ===============    ===============

Basic and diluted earnings per
  common share                                           $         0.12     $         0.18
                                                         ===============    ===============
</TABLE>




                                       4
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                          March 31,
                                                                 ----------------------------
                                                                     2000            1999
                                                                 ------------    ------------
                                                                               (unaudited)
<S>                                                              <C>             <C>
Net Income                                                       $       244     $       273
                                                                 ------------    ------------

Other comprehensive income:
   Unrealized gains (loss) on securities available for sale             $197         ($1,164)
   Less: reclassification adjustment for gains (losses)
          included in net income                                           -               -
                                                                 ------------    ------------

Other comprehensive income (loss), before tax                            197          (1,164)

Income tax (expense) benefit related to items of other
    comprehensive income                                                 (67)            396
                                                                 ------------    ------------

Other comprehensive income (loss), net of tax                            130            (768)
                                                                 ------------    ------------

Comprehensive Income (loss)                                      $       374     $      (495)
                                                                 ============    ============
</TABLE>





                                       5
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                    March 31,
                                                                                              2000            1999
                                                                                          -------------   -------------
                                                                                                   (unaudited)
<S>                                                                                        <C>             <C>
Operating Activities
      Net Income                                                                           $       244     $       273
      Adjustments to reconcile net income to net cash provided
           (absorbed) by operating activities:
           Provision for loan losses                                                               130              60
           Depreciation and amortization                                                           179             140
           Deferred loan fees                                                                      (18)            (31)
           Net amortization of premiums and accretion of discounts                                 (25)            418
           Loss (gain) on sale of loans                                                             71            (180)
           Originations of loans held for sale                                                  (3,921)        (18,217)
           Proceeds from sale of loans                                                           3,850          18,397
           Loss (gain) on sale of securities available for sale                                      -             (89)
           (Gain) loss on trading securities                                                         -              22
           Purchase of trading securities                                                            -         (10,057)
           Sales of trading securities                                                               -           7,345
           Changes in:
                Accrued interest receivable                                                       (276)            (88)
                Other assets                                                                     1,761            (294)
                Accrued interest payable                                                           157             124
                Prepayments by borrowers for taxes and insurance                                    48           1,095
                Other liabilities                                                                 (627)            469
                                                                                          -------------   -------------

Net cash provided (absorbed) by operating activities                                             1,573            (613)
                                                                                          -------------   -------------

Investing activities
      Net increase in loans                                                                    (14,950)        (13,756)
      Mortgage-backed securities principal repayments                                               46             372
      Proceeds from sale of securities available for sale                                            -           5,073
      Purchase of securities available for sale                                                      -          (6,000)
      Proceeds from sale of FHLB stock                                                             500               -
      Purchase of FHLB stock                                                                      (550)              -
      Purchase of servicing rights                                                                 (47)              -
      Purchase of office properties and equipment                                                 (136)         (1,056)
                                                                                          -------------   -------------

Net cash absorbed by investing activities                                                      (15,137)        (15,367)
                                                                                          -------------   -------------

Financing activities
      Net increase in deposits                                                                  21,159          15,359
      Proceeds from FHLB advances                                                               11,000               -
      Repayment of FHLB advances                                                                (6,000)              -
      Increase (decrease) in securities sold under agreement to repurchase                     (12,162)          1,932
      Repurchase of convertible preferred securities                                               (63)              -
      Dividends paid on common stock                                                              (117)              -
      Principal payments on bonds payable, including unapplied payments                              -             (25)
                                                                                          -------------   -------------

Net cash provided by financing activities                                                       13,817          17,266
                                                                                          -------------   -------------

Increase in cash and cash equivalents                                                              253           1,286

Cash and cash equivalents, beginning of period                                                  12,634          10,527
                                                                                          -------------   -------------

Cash and cash equivalents, end of period                                                   $    12,887     $    11,813
                                                                                          =============   =============
</TABLE>



                                       6
<PAGE>

                         GUARANTY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    For the Three Months Ended March 31, 2000



Note 1 Principles of Consolidation

The 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. and Guaranty  Investment Corp., which was organized to
sell insurance annuities and other non-deposit investment products. All material
intercompany   accounts   and   transactions   have  been   eliminated   in  the
consolidation.

Note 2 Basis of Presentation

In the opinion of management,  the accompanying  unaudited interim  consolidated
financial  statements  contains  all  adjustments  (consisting  only  of  normal
recurring  accruals)  necessary to present  fairly the financial  position as of
March 31,  2000 and the  results of  operations  and cash flows for the  interim
periods ending March 31, 2000 and 1999. All 2000 interim  amounts are subject to
a 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.

Note 3 Earnings Per Share

Basic earnings per share is based on net income divided by the weighted  average
number of common  shares  outstanding  during the period.  Diluted  earnings per
share shows the dilutive effect of additional common shares issuable under stock
option  plans.  The basic and diluted  earnings  per share for the three  months
ended March 31, 2000 and 1999 have been determined by dividing net income by the
weighted  average  number of shares of common  stock  outstanding  during  these
periods 1,961,727 and 1,501,727, respectively.

Note 4 Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting period. Actual results could differ from those estimates.

Note 5 Reclassifications

Certain  reclassifications  have  been  made in the  prior  period  consolidated
financial statements to conform to the March 31, 2000 presentation.







                                       7
<PAGE>


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


Changes in Financial Condition

Total assets  increased by $13.7 million or 5.3% from $259.3 million at December
31,  1999 to  $273.1  million  at March  31,  2000  primarily  as a result of an
increase in loan volume during the quarter.  Cash and cash equivalents increased
$253,000  or 2.0%,  to $12.9  million at March 31,  2000 from  $12.6  million at
December  31,  1999.  Other  assets  decreased  by $1.8 million or 47.2% to $2.0
million at March 31, 2000 from $3.8 million at December 31, 1999.  This decrease
is a direct result of a decrease in accounts  receivables  due to the receipt of
approximately  $2.0 million due from the sale of serviced  loans at December 31,
1999.

Investment  securities,  at March 31, 2000, increased $174,000,  or .7% to $25.2
million from $25.0  million at December 31, 1999.  This change was due primarily
to an increase in Federal  Home Loan Bank stock and an increase in market  value
of  available  for sale  securities  which was  partially  offset  by  principal
repayments   of   mortgage   backed   securities   which   are   classified   as
held-to-maturity.  At the dates indicated, the investment portfolio is comprised
of the following:

                                            March 31,          December 31,
                                               2000                1999
                                         -----------------   ----------------

Mortgage-backed securities
    classified as held-to-maturity                 $1,046             $1,086
US Treasury Notes classified
    as held-to-maturity                               250                250
Corporate bonds classified as
    available for sale                             17,241             17,097
Mortgage-backed securities
    classified as available for sale                4,800              4,780
Other investments                                   1,870              1,820
                                         -----------------   ----------------
                                                  $25,207            $25,033
                                         =================   ================

Net loans were $220.3  million at March 31, 2000, an increase of $14.8  million,
or 7.2%,  from net loans of $205.4  million at December  31,  1999.  The primary
focus of portfolio  lending  continues  to be  prime-based  construction  loans,
(including builder lines of credit),  commercial real estate, 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 growth in commercial  business loans,  prime based construction loans
and consumer loans.  This increase was partially  offset by a slight decrease in
commercial real estate loans.

Real estate  owned of $803,000  at March 31, 2000 and  $843,000 at December  31,
1999  consisted  primarily  of  developed  lots  located  within  a  residential
subdivision.  Net proceeds are  anticipated to approximate the carrying value at
March 31, 2000. No material losses are anticipated on the ultimate sale of these
properties.

Deposits were $220.8 million at March 31, 2000, an increase of $21.2 million, or
10.6%,  from total  deposits of $199.6 million at December 31, 1999. The deposit
growth was  primarily the result of an increase in  certificates  of deposits of
$19.5  million or 15.0% and an increase in NOW/MMDA  accounts of $1.4 million or
2.4%. This increase was a result of promotional rates offered by the Bank during
the quarter.



                                       8
<PAGE>

At March 31, 2000,  $25.0  million in advances  were borrowed from the FHLB on a
short-term  basis,  representing  an increase of $5.0 million from  December 31,
1999. These advances are comprised  entirely of daily rate credits which reprice
based on previous days Fed Fund rate.


Results of Operations

Net Income

Guaranty  reported  net income of $ 244,000  and  $273,000  for the three  month
periods  ended March 31,  2000 and 1999,  respectively.  The  overall  source of
income has changed  dramatically  with the new operating plan of the Bank.  Core
earnings increased over 600% from a loss of $81,000 in the first quarter of 1999
to income of $441,000 for the same period of 2000.

Net Interest Income

Net interest  income  increased by $928,000,  or 67.2%,  to $2.3 million for the
three months ended March 31, 2000,  compared to $1.4 million for the same period
in 1999. Average earning assets increased to $249.3 million for the three months
ended March 31, 2000,  compared to an average  balance of $211.0 million for the
same period in 1999.  The average  rate  earned also  increased  to 8.8% for the
three  months  ended  March  31,  2000  from  7.8% for the same  period of 1999.
Interest rate spread and net interest  margin for the three month periods ending
March 31, 2000 and 1999 were 3.5% and 3.7% and 2.8% and 3.0%, respectively.

Provision for Loan Losses

Guaranty provides valuation  allowances for anticipated losses on loans and real
estate when its management determines that a significant decline in the value of
the collateral has occurred, and if the value of the collateral is less than the
amount of the unpaid  principal of the related  loan,  plus  estimated  costs of
acquisition and sale. In addition,  Guaranty also provides reserves based on the
dollar  amount and type of  collateral  securing its loans,  in order to protect
against  unanticipated  losses. A loss experience  percentage is established for
each loan type and is reviewed  annually.  Each quarter,  the loss percentage is
applied to the  portfolio,  by product type, to determine the minimum  amount of
reserves  required.  Guaranty  recorded a provision  of  $130,000  for the three
months ended March 31,  2000,  and a provision of $60,000 for the same period in
1999. As of March 31, 2000 the total allowance for loan losses was $1.4 million.
Although management believes that it uses the best information available to make
such  determinations,  future adjustments to reserves may be necessary,  and net
income could be significantly  affected,  if circumstances  differ substantially
from assumptions used in making the initial determinations.

Non-Interest Income

Non-interest income was $214,000 for the first quarter 2000 compared to $794,000
for the same period in 1999.  This  decrease was  primarily due to a decrease in
loan sales and related gains on the sales of these loans and securities.

Non-Interest Expense

Non-interest expense increased $321,000,  or 18.9% to $2.0 million for the three
months  ended  March 31, 2000  compared  to $1.7  million for the same period in
1999. This increase was primarily due to increases in overall operating expenses
and increased advertising expenses related to the increased size of the bank and
expansion of the residential and commercial  lending  divisions and the consumer
banking franchise.



                                       9
<PAGE>


Income Tax Expense

Guaranty  recognized  income tax expense of $126,000  for the three months ended
March 31, 2000, compared to $140,000 for the same period in 1999. This change in
tax  expense  between  periods is  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 March 31,
2000, the total approved loan commitments  outstanding amounted to $4.2 million.
At the same date,  commitments  under unused  lines of credit  amounted to $68.1
million.  Certificates  of  deposit  scheduled  to mature in one year or less at
March 31, 2000 totaled $142.4  million.  Management  believes that a significant
portion of maturing deposits will remain with Guaranty.

At March 31,  2000,  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                                           9.22%
Total risk based                                           10.12%
Tier 1 to average adjusted total assets                     7.94%

Forward Looking Statements

Certain  statements in this quarterly report on Form 10-QSB are  forward-looking
and  may be  identified  by the  use  of  words  such  as  "believe",  "expect",
"anticipate",   "should",   "planned",   "estimated",  and  "potential".   These
statements are based on Guaranty's  current  expectations.  A variety of factors
could cause Guaranty's  actual results to differ materially from the anticipated
results or other expectations expressed in such forward-looking  statements. The
risks  and   uncertainties   that  may  affect  the   operations,   performance,
development, and results of Guaranty's business include interest rate movements,
competition from both financial and non-financial  institutions,  the timing and
occurrence (or  nonoccurence)  of transactions and events that may be subject to
circumstances beyond Guaranty's control, and general economic conditions.



                                       10
<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
                        Not Applicable

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 of Form 8-K - None




                                       11
<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: May 15,2000                      By: /s/ Thomas P. Baker
                                           -------------------------------------
                                           Thomas P. Baker
                                           President and Chief Executive Officer


Date: May 15,2000                      By: /s/ L. Ben Johnson
                                           -------------------------------------
                                           L. Ben Johnson
                                           Vice President and Controller





                                       12