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                                 EXHIBIT 10.7

Exhibit 10.7    Employment Agreement between Valley Financial Corp. and Valley
                Savings Bank and Doyle V. Rule



                             EMPLOYMENT AGREEMENT
                             --------------------

     This Agreement is made effective as of September 18, 1997, by and between
Valley Savings Bank ("Bank"), Burlington, Iowa, Valley Financial Corp.
("Company") and Doyle V. Ruble, Jr., ("Executive").

     WHEREAS, the Bank and Company wish to be assured of the services of
Executive for the period provided in this Agreement; and

     WHEREAS, the Executive is willing to serve in the employ of the Bank as
determined by the Board of Directors of Bank for said period.

     NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:

1.      POSITION AND RESPONSIBILITIES

        During the period of his employment hereunder, the Executive agrees to
        serve as President of Bank and, if the Executive agrees to serve, if
        elected, as an officer and director of Company or any subsidiary or
        affiliate of the Bank or Company.

2.      TERMS AND DUTIES

        (a)     The term of this Agreement shall be deemed to have commenced
                as of June 12, 1997 and shall continue through the close of
                business on June 30, 1998; provided however, that if any
                person or entity shall acquire beneficial ownership (within
                the meaning of section 13 of the Securities Exchange Act of
                1934, as amended) of fifty-one percent (51%) or more of the
                outstanding common stock of either the Company or the Bank (an
                "Acquisition of Control") after June 12, 1997 and on or before
                June 30, 1998, the term of this Agreement shall continue
                through the close of business on the first anniversary of such
                Acquisition of Control.  Following the expiration date of the
                term of this Agreement, the Executive's employment shall
                continue through the six (6) month anniversary of the date on
                which the Bank or the Company gives notice of its intention to
                terminate Executive's employment for reasons other than
                "Termination for Cause," but such continued employment shall
                not be deemed an extension of the term of this Agreement.

        (b)     The Executive shall devote substantially all of his business
                time, attention, skill and efforts to the faithful performance
                of his duties for the position elected regarding the operation
                and management of Bank.  The Executive may serve, or continue
                to serve, on the Boards of Directors of, and hold any other
                offices or positions in, companies or organizations, which in
                the judgement of the Bank's Board of Directors, will not
                present any conflict of interest with the Bank or Company, or
                materially affect the performance of Executive's duties
                pursuant to this Agreement.

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3.      COMPENSATION AND REIMBURSEMENT

        (a)     The compensation specified under this Agreement shall be the
                salary and benefits approved as compensation by the Board of
                Directors of Bank which shall be approved no less than once a
                calendar year; provided, however, in no event shall the salary
                approved be less than the salary in effect on the date of this
                Agreement, $87,400 per annum.

        (b)     In addition to the compensation provided by paragraph (a)
                above, the Bank shall pay or reimburse the Executive for all
                travel and other obligations incurred by Executive which are
                reasonable and necessary for the Executive to complete his
                required duties.

4.      PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION

        (a)     Upon the occurrence of an Event of Termination (as herein
                defined), the follo wing provisions  shall apply.

        (b)     As used in this Agreement an "Event of Termination" shall mean
                and include any one or more of the following; (1) death or
                disability of the Executive or (2) termination of the
                Executive's employment, other than "Termination for Cause," by
                Bank or Company.

        (c)     Upon the occurrence of an Event of Termination during the term
                of this Agreement and prior to an Acquisition of Control, the
                Bank shall pay the Executive, or in the event of his
                subsequent death, his beneficiaries or his estate as the case
                may be, as severance pay or liquidated damages, or both, an
                amount equal to one year's base salary, payable in twelve (12)
                equal installments on the first business day of each month
                commencing with the first day of the month following the
                effective date of the Event of Termination and for eleven (11)
                months thereafter.  In the event of the death of the Executive
                during the period from the Event of Termination until the
                first anniversary thereof, the remaining payments shall be
                paid to the Executive's beneficiaries or his estate, as the
                case may be.

        (d)     In the event that the Bank or Company terminates the
                Executive's employment, other than "Termination for Cause," on
                any date following the term of this Agreement, the Bank or
                Company shall provide Executive with at least six (6) month's
                notice of such termination.  In the event that the Bank or
                Company fails to provide such notice, the Bank shall pay the
                Executive, or in the event of his subsequent death, his
                beneficiaries or his estate as the case may be, as severance
                pay or liquidated damages, or both, an amount equal to his
                monthly base salary, multiplied by the number of months during
                the six (6) month period prior to the Executive's termination
                for which the Executive did not receive notice of such
                termination ("Non-notice Months").  Such amount shall be
                payable in equal installments on the first business day of
                each month commencing with the first day of the month
                following the effective date of the Executive's termination
                and shall continue to be paid for the number of Non-notice
                Months.  In the event of the death of the Executive during the
                period from the Event of Termination until the payment period
                described above has terminated, the remaining payments shall
                be paid to the Executive's beneficiaries or his estate, as the
                case may be.

        (e)     If, as a result of the Executive's incapacity due to physical
                or mental illness, he shall have been absent from the
                performance of his duties for Bank for six (6) consecutive
                months, the Bank may terminate Executive's employment for
                "disability".

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        (f)     Upon the occurrence of an Event of Termination, the Bank will
                cause, to the extent it is able, continuation of life,
                medical, dental and disability benefits coverage as maintained
                for Executive prior to his termination. Such coverage shall
                cease upon the expiration of payments due under the Agreement.

5.      TERMINATION FOR CAUSE

        The term "Termination for Cause" pursuant to this Agreement shall mean
        termination of the Executive as a result of: (1) intentional failure
        to perform stated duties, (2) personal dishonesty which results in
        loss to the Bank or one of its affiliates, (3) willful violation of
        any law, rule, regulation (other than traffic violations or similar
        offenses), (4) breach of fiduciary duty involving personal profit, (5)
        final cease-and-desist order or (6) material breach of this Agreement.

6.      OTHER

        (a)     Any payments made to the Executive pursuant to this Agreement,
                or otherwise, are subject to and conditioned upon compliance
                with 12 U.S.C. §1828(k) regarding golden parachutes and
                indemnification payments and any regulations promulgated
                thereunder.

        (b)     The headings or sections and paragraphs herein are included
                solely for convenience or reference and shall not control the
                meaning or interpretation of any of the provisions of this
                Agreement.

        (c)     This Agreement shall be governed by the laws of the State of
                Iowa, unless otherwise specified herein.

        (d)     The Bank and the Company shall require any successor or
                assignee, whether direct or indirect, by purchase, merger,
                consolidation or otherwise, of all or substantially all the
                business or assets of the Bank or the Company, expressly and
                unconditionally to assume and agree to perform the Bank's
                obligations under this Agreement, in the same manner and to
                the same extent that the Bank would be required to perform if
                no such succession or assignment had taken place.

        (e)     This instrument contains the entire agreement of the parties
                relating to the subject matter hereof, and supersedes in its
                entirety any and all prior agreement, understandings or
                representations relating to the subject matter hereof,
                including, but not limited to, the Employment Agreement
                effective as of June 12, 1997.  No modifications of this
                Agreement shall be valid unless made in writing and signed by
                the parties hereto.

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     IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement
to be executed by a duly authorized officer or member of the Board of
Directors and Executive has signed this Agreement, as of the date first above
written.


Attest:                                      Valley Savings Bank

  /s/ Donald E. Holder                       By /s/ Larry L. Wenzl
---------------------------                     ------------------------


Attest:                                      Valley Financial Corp.

  /s/ Donald E. Holder                       By  /s/ Larry L. Wenzl
---------------------------                     ------------------------

Attest:

  /s/ Donald E. Holder                       /s/ Doyle V. Ruble, Jr.
---------------------------                  ---------------------------
                                             Executive


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