UNITED STATES
                        SECURITIES AND EXCHANGE COMMISION
                             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. 333-48825-01
March 31, 1998




                            GUARANTY CAPITAL TRUST I




         Delaware                                    54-6422391
(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 ___ No _X_ (not  subject to filing  requirements  for the
past 90 days).

         As of May 18, 1998, the Registrant had 8,537 shares of its Common Stock
outstanding.

         *This Form 10-QSB also covers 276,000 shares of the Registrant's  $1.75
Convertible Preferred Securities, which were registered under the Securities Act
of 1933, as amended,  pursuant to a registration statement declared effective on
April 29, 1998.


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                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements.   (See Note Below)

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

         Guaranty  Capital Trust I (the "Trust") is a statutory  business  trust
formed under the Delaware  Business  Trust Act, as amended,  pursuant to a trust
agreement,  as amended  by an amended  and  restated  declaration  of trust (the
"Declaration"),  and the  filing of a  certificate  of trust  with the  Delaware
Secretary  of State on November 21,  1997.  The Trust  exists for the  exclusive
purposes  of (i)  issuing  and  selling  trust  securities  consisting  of $1.75
Convertible  Preferred  Securities  (the  "Preferred   Securities")  and  common
securities (the "Common Securities," and together with the Preferred Securities,
the "Trust Securities"),  representing  undivided beneficial ownership interests
in the assets of the Trust,  (ii)  investing  the proceeds from such issuance in
Junior Subordinated Debt Securities (the "Junior  Subordinated Debt Securities")
of Guaranty Financial  Corporation,  a Virginia corporation (the "Corporation"),
and (iii)  engaging  in only those  other  activities  necessary,  advisable  or
incidental thereto.  The Trust's sole assets are $7,113,425  principal amount of
Junior Subordinated Debt Securities,  and payments under the Junior Subordinated
Debt  Securities  are the sole revenues of the Trust.  Ownership of the Trust is
evidenced by $6,900,000  aggregate  liquidation amount of Preferred  Securities,
which are held by 38 security  holders,  and by $213,425  aggregate  liquidation
amount of Common Securities, all of which are held by the Corporation, as of May
5, 1998. The Trust makes  distributions on the Trust Securities to the extent it
receives  distributions  from the  Corporation on the Junior  Subordinated  Debt
Securities.  Distributions  on  the  Trust  Securities  are  guaranteed  by  the
Corporation,  but only to the extent that the Trust has  available  funds to pay
such  distributions.  Each Preferred  Security is  convertible  into a number of
shares of the Corporation's  common stock,  $1.25 par value, which trades on The
Nasdaq  National  Market under the symbol "GSLC," at the option of the holder at
any time prior to repayment of the  Preferred  Security  either at redemption or
maturity, and subject to the Corporation's right to terminate the convertibility
of the Preferred Securities.

         On May 5,  1998,  the Trust  invested  the  proceeds  from the sale and
issuance of the Trust Securities in the Junior Subordinated Debt Securities. The
Trust's ability to pay distributions to the holders of the Preferred  Securities
is dependent on its receipt of  distributions  on the Junior  Subordinated  Debt
Securities  from the  Corporation.  Therefore,  upon the receipt by the Trust of
payments from the Corporation,  the Trust will pass through such payments to the
holders of the Preferred Securities.

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         NOTE:  Because the Trust is a special purpose  financing entity with no
separate  business  operations,  the only  assets of the  Trust  are the  Junior
Subordinated  Debt  Securities,  and the Trust does not believe  that  financial
statements for the Trust are meaningful.  Accordingly,  financial statements and
related  financial  information have not been included in this Form 10-QSB.  For
further information  concerning the Corporation,  including financial statements
and other financial  information,  see the  Corporation's  Annual Report on Form
10-KSB for the year ended  December 31, 1997,  and the  Corporation's  Quarterly
Report on Form 10-QSB for the quarter  ended March 31,  1998,  as filed with the
Securities  and Exchange  Commission,  copies of which may be obtained  from the
Corporate   Secretary  of  the   Corporation  at  1658  State  Farm   Boulevard,
Charlottesville, Virginia 22911.


<PAGE>


                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings.

                  None.

Item 2.  Changes in Securities and Use of Proceeds.

                  (a)      Not applicable.

                  (b)      Not applicable.

                  (c)      None.

                  (d)      On April 29, 1998,   the   Commission   declared  the
effectiveness of the  Corporation's  and the Trust's  Registration  Statement on
Form  S-1  (the   "Registration   Statement"),   file  numbers   333-48825   and
333-48825-01.  The Registration  Statement was the first registration  statement
filed  under  the  Securities  Act  of  1933,  as  amended,  by the  Trust.  The
Registration Statement covered (i) 240,000 Preferred Securities, (ii) the Junior
Subordinated Debt Securities to be purchased by the Trust with the proceeds from
the sale of the Preferred  Securities,  (iii) the  Guarantee of the  Corporation
with respect to the  Preferred  Securities,  (iv) such  indeterminate  number of
shares of the  Corporation's  common stock, par value $1.25 per share, as may be
issuable  upon  conversion  of the  Preferred  Securities,  and (v) up to 36,000
additional  Preferred  Securities,  issuable if the Trust exercises its right to
increase the aggregate  liquidation  amount of the offering.  

         The offering of the  Preferred  Securities  commenced on April 2, 1998,
and the sale of 276,000  Preferred  Securities closed on May 5, 1998. The amount
of Preferred  Securities  registered was 276,000, and the aggregate price of the
offering amount  registered was $6,900,000.  The amount of Preferred  Securities
sold was  276,000,  and the  aggregate  offering  price of the  amount  sold was
$6,900,000. The underwriter of the offering was McKinnon & Company, Inc.

         Reasonable  estimates  for the  amount  of  expenses  incurred  for the
Corporation's  account in connection  with the issuance and  distribution of the
Preferred  Securities  described above are $276,000 in underwriting  commissions
and $90,000 in offering expenses,  neither of which represent direct or indirect
payments  to  directors,  officers,  general  partners of the  Corporation,  the
administrative trustees of the Trust or their associates,  to persons owning ten
percent  or more of any class of equity  securities  of the  Corporation  or the
Trust, or to affiliates of the Corporation or the Trust. All expenses related to
the  offering,  including  the  underwriter's  compensation,  were  paid  by the
Corporation.  Accordingly,  the  total  offering  proceeds  to  the  Trust  were
$6,900,000.

         The total proceeds from the Preferred  Securities  offered as described
above are being invested in the Junior  Subordinated Debt Securities.  No direct
or indirect payments have been made to directors,  officers, general partners of
the Corporation,  the administrative  trustees of the 


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Trust or their associates, to persons owning ten percent or more of any class of
equity  securities  of the  Corporation  or the Trust,  or to  affiliates of the
Corporation or the Trust.

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)      Exhibits:

                  4.1      Certificate  of Trust  (incorporated  by reference to
                           Exhibit  4.1 of  the  Registration  Statement  of the
                           Trust on Form S-1 (Nos. 333-48825 and 333-48825-01)).

                  4.2      Trust   Agreement    between    Guaranty    Financial
                           Corporation and Wilmington Trust Company,  as Trustee
                           (incorporated  by  reference  to  Exhibit  4.2 of the
                           Registration Statement of the Trust on Form S-1 (Nos.
                           333-48825 and 333-48825-01)).

                  4.3      Form of Amended  and  Restated  Declaration  of Trust
                           (incorporated  by  reference  to  Exhibit  4.3 of the
                           Registration Statement of the Trust on Form S-1 (Nos.
                           333-48825 and 333-48825-01)).

                  4.4      Form  of  Junior   Subordinated   Indenture   between
                           Guaranty  Financial  Corporation and Wilmington Trust
                           Company,  as Trustee  (incorporated  by  reference to
                           Exhibit  4.4 of  the  Registration  Statement  of the
                           Trust on Form S-1 (Nos. 333-48825 and 333-48825-01)).

                  4.5      Form of Convertible  Preferred  Security (included in
                           Exhibit 4.3 above).

                  4.6      Form of Junior  Subordinated Debt Security  (included
                           in Exhibit 4.4 above).

                  4.7      Form of  Guarantee  Agreement  with  respect to Trust
                           Securities  issued  by  the  Trust  (incorporated  by
                           reference   to  Exhibit   4.7  of  the   Registration
                           Statement  of the Trust on Form S-1  (Nos.  333-48825
                           and 333-48825-01)).

<PAGE>


                  (b)      Reports on Form 8-K.

                           None.



<PAGE>


                                   SIGNATURES

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

                                  GUARANTY CAPITAL TRUST I
                                  (Registrant)



Date:    May 20, 1998             By:      /s/ Vincent B. McNelley
                                           ------------------------------------
                                  Name:    Vincent B. McNelley
                                  Title:   Administrative Trustee
                                           (as principal financial officer and
                                            on behalf of the Registrant)