EXHIBIT 10.1 Consultant Agreement with B. L. Rakes

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                              Consulting Agreement


         This Consulting Agreement ("Agreement") is entered into this 1st day of
July 1999  ("Effective  Date") by and between  Southwest  Virginia Savings Bank,
FSB,  a  federal  savings  bank  (the  "Company")  with its  place  of  business
headquartered at Roanoke, Virginia and B. L. Rakes ("Consultant").

         WHEREAS, the Company recognize the specialized  knowledge and expertise
of the  Consultant  related  to the  business  affairs of the  industry  and the
Company,  and that upon  retirement of the Consultant as the President and Chief
Executive  Officer,  the Company wishes to enter into a consulting  relationship
with Consultant; and

         WHEREAS,  Consultant has  previously  served the Company and its parent
corporation,  SWVA Bancshares,  Inc. ("Parent") as President and Chief Executive
Office;

         WHEREAS,  Consultant  and the  Company  desire  to  enter  into  such a
consulting relationship upon the terms and conditions hereinafter contained;

         NOW,  THEREFORE,  in consideration of the covenants and terms contained
in this  Agreement  as set forth herein and of the mutual  benefits  accruing to
Company and to Consultant  from the  consulting  relationship  to be established
between the parties by the terms of this Agreement, Company and Consultant agree
as follows:

1.       Consulting Relationship

         Company hereby retains  Consultant,  and Consultant hereby agrees to be
retained by Company, as an independent  contractor,  and not as an employee. The
Consultant  hereby  acknowledges  that he has  resigned  as an  employee  of the
Company and the Parent on or before the Effective Date.

2.       Consulting Service

         Consultant agrees that during the term of this Agreement:

         A.       Consultant  will devote his best efforts to his position as an
                  independent  contractor  and  will  perform  such  duties  and
                  execute the policies of Company as  determined by its board of
                  directors and its President as the Company and  Consultant may
                  mutually  agree  upon  from time to time;  provided  that said
                  duties performed by Consultant shall not be inconsistent  with
                  the nature and character of the duties

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                  performed  by  Consultant  for the Company when serving as the
                  President  and  Chief  Executive  Officer.  As an  independent
                  contractor,  Consultant shall not be an officer or employee of
                  the Company and shall not be subject to the direct  control or
                  supervision  of the Company or its  President  with respect to
                  the time spent, research undertaken, or procedures followed in
                  the  performance of consulting  services  rendered  hereunder.
                  During the Term of the Agreement, Consultant agrees to consult
                  with the Company on matters  related to the  business  affairs
                  and operations of the Company,  including  matters that relate
                  to compliance with applicable banking laws and regulations and
                  merger and  acquisition  planning.  It is estimated  that such
                  activities will encompass  approximately 8 to 10 business days
                  per month.

         B.       Consultant  shall  exercise  a  reasonable  degree  of  skill,
                  prudence and care in  performing  the services  referred to in
                  Paragraph A above;

         C.       Except as may be limited by Section 6 hereinafter,  Consultant
                  may be an employee,  officer or director of other companies or
                  entities  and  may  provide  consulting   services  for  other
                  companies or  organizations;  provided that such activities do
                  not  conflict   with  the  services  and  activity   that  the
                  Consultant is actually  rendering to the Company or any of its
                  subsidiaries  or the services or activities of the Company and
                  its subsidiaries;

         D.       Consultant  shall be available  to render  services to Company
                  under this Agreement as requested by the Board of Directors or
                  the  President of the Company  commencing on the first date of
                  the initial  Term of this  Agreement as contained in Section 5
                  herein.  Consultant  shall  not be  obligated  to  render  any
                  services  under this  Agreement  during such period when he is
                  unable to do so due to illness,  disability or injury, subject
                  to the terms of Section 5(b) hereof;

         E.       Consultant  shall be  available  for  service  hereunder  upon
                  receipt of no less than (5) five  days'  written  notice  from
                  Company; and

         F.       Consultant shall not enter into agreements or make commitments
                  on behalf of the  Company  without  prior  written  consent or
                  approval of the Company or its President.

3.       Compensation

         A.       Company agrees to pay  Consultant  for his services  performed
                  under this Agreement and for his commitments and agreements as
                  contained  herein,  including Section 6 herein, at the rate of
                  $40,000 per year  payable no less than  monthly at the rate of
                  $3,333  per  month  throughout  the  Term  of  the  Agreement.
                  Consultant  shall not be entitled to participate in or receive
                  benefits under any Company

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                  programs maintained for its employees,  except as specifically
                  agreed to by the  parties.  During the Term of the  Agreement,
                  the Company will also reimburse the Consultant for the monthly
                  premium  expense  related to Consultant  maintaining  Medicare
                  Supplement Insurance (medi-gap).

         B. Other Compensation.  In the event that Consultant serves as a member
of the Board of Directors of the Company, its parent or any of its subsidiaries,
Consultant  shall  be paid the fee  normally  paid  for  such  service  to other
non-employee  directors  and any fees as Chairman of the Board of the Company or
the Parent without regard to any other compensation paid under this Agreement.

4.       Other Conditions

                  Consultant  shall  have no  authority  over  any  employee  or
         officer  of  Company,  except  as  may  be  necessary  in  the  routine
         performance of his duties  hereunder,  nor shall Company be required in
         any  manner  to  implement  any  plans or  suggestions  Consultant  may
         provide.

5.       Term and Termination

                  The term of this  Agreement  shall begin on the Effective Date
         and shall continue for a period of one year thereafter ("Term"), unless
         extended or  terminated  in accordance  with the  provisions  set forth
         below.

                           (a) Termination for Cause.  The Company may terminate
                  this Agreement at any time for "Just Cause."  Termination  for
                  "Just  Cause" shall be defined as  termination  because of the
                  Consultant's personal dishonesty,  willful misconduct,  breach
                  of  fiduciary  duty  involving  personal  profit,  or  willful
                  violation  of any  law,  rule  or  regulation  related  to the
                  business or operations of the Company or its subsidiaries.

                           (b) Death or Disability. In the event of Consultant's
                  death or permanent  disability  as determined by the President
                  of the Company,  this Agreement shall terminate and all rights
                  to receive  payments under the remaining term of the Agreement
                  shall cease.

6.       Non-Competition and Confidential Business

                  Consultant,  during  the  term  of the  Agreement,  will  not,
         without the express written consent of Company,  directly or indirectly
         communicate  or  divulge  to,  or use for his  own  benefit  or for the
         benefit of any other person, firm, association, or corporation,  any of
         the Company's,  or its  subsidiaries'  or  affiliates',  trade secrets,
         proprietary data or other confidential  information  communicated to or
         otherwise learned or acquired by Consultant

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         from  the  Company  during  the  Term of this  Agreement,  except  that
         Consultant  may disclose such matters to the extent that  disclosure is
         required (a) in the course of the consulting  relationship with Company
         or  (b)  by  a  court  or  other   governmental   agency  of  competent
         jurisdiction.

                  During the term of this Agreement, Consultant will not contact
         (with a view toward selling any product or service competitive with any
         product  or  service  sold or  proposed  to be sold by  Company  or any
         subsidiary or affiliate of Company) any person,  firm,  association  or
         corporation  (a) to  which  Parent  or  Company  or any  subsidiary  or
         affiliate of Parent sold any product or service,  (b) which  Consultant
         solicited,  contacted  or  otherwise  dealt with on behalf of Parent or
         Company  or any  subsidiary  or  affiliate  of  Parent,  or  (c)  which
         Consultant was otherwise  aware was a client of Parent,  Company or its
         parent or  subsidiary  or  affiliate  of Parent.  During  such  period,
         Consultant  will not  directly  or  indirectly  make any such  contact,
         either  for his own  benefit or for the  benefit  of any other  person,
         firm, association, or corporation.

                  During the term of this  Agreement,  Consultant will not serve
         as an employee, officer, consultant,  director or in any other advisory
         capacity,  whether  compensated  or  uncompensated,  for any  financial
         services organization, corporation or entity (including but not limited
         to an insured depository  institution within the meaning of the Federal
         Deposit  Insurance Act, a federal or state  chartered  credit union, an
         insurance  company,  a mortgage  brokerage or mortgage banking firm, an
         investment  advisory or investment  brokerage  firm, or other financial
         services entity with offices in Virginia.

7.       Independent Contractor

                  The parties hereto agree and acknowledge that the relationship
         between  Company  and  Consultant  shall  be  that  of  an  independent
         contractor  and  not  that  of  employer-employee,   master-servant  or
         principal-agent.  Nothing  in this  Agreement,  or its  implementation,
         shall be construed to be to the contrary.

8.       The Complete Agreement

                  This  Agreement,  and any  attachments  or  exhibits  appended
         hereto,  shall  represent the complete  Agreement  between  Company and
         Consultant  concerning  the subject  matter hereof and  supersedes  all
         prior  agreements  or  understandings,  written or oral.  No  attempted
         modification or waiver of any of the provisions hereof shall be binding
         on either  party  unless made in writing and signed by both  Consultant
         and Company.

9.       Notices

                  Any notice  required or permitted to be given  hereunder shall
         be in writing and shall be effective  three  business  days after it is
         properly sent by registered or certified mail, if

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         to the Company to the  President at the  administrative  offices of the
         Company,  or if to  Consultant  to the  address  set forth  beneath his
         signature to this  Agreement,  or to such other address as either party
         may from time to time designate by notice.

10.      Assignability

                  This Agreement may not be assigned by either party without the
         prior  written  consent of the other  party,  except that no consent is
         necessary  for the Company to assign this  Agreement  to a  corporation
         succeeding to  substantially  all the assets or business of the Company
         whether  by  merger,  consolidation,  acquisition  or  otherwise.  This
         Agreement  shall be binding upon  Consultant,  his heirs and  permitted
         assigns and the Company, its successors and permitted assigns.

11.      Severability

                  Each of the  sections  contained  in this  Agreement  shall be
         enforceable independently of every other section in this Agreement, and
         the invalidity or nonenforceability of any section shall not invalidate
         or render  nonenforceable  any other section  contained  herein. If any
         section or provision in a section is found invalid or unenforceable, it
         is the intent of the  parties  that a court of  competent  jurisdiction
         shall  reform  the  section  or   provisions  to  produce  its  nearest
         enforceable economic equivalent.

12.      Arbitration

                  Unless otherwise  mutually agreed to by the Consultant and the
         Company in writing, any controversy or claim arising out of or relating
         to this  Agreement  or the breach  thereof  shall be settled by binding
         arbitration in accordance with the Commercial  Arbitration Rules of the
         American Arbitration  Association,  with such arbitration hearing to be
         held at the offices of the American Arbitration  Association ("AAA") at
         the AAA office nearest to the home office of the Company,  and judgment
         upon the award  rendered  by the  arbitrator(s)  may be  entered in any
         court having jurisdiction thereof. Either the Consultant or the Company
         may file a request for such arbitration with the AAA.

13.      Applicable Law

                  It is the  intention of the parties  hereto that all questions
         and interpretations with respect to the construction and performance of
         this  Agreement and the rights and  liabilities  of the parties  hereto
         shall be determined in accordance with the laws of the  Commonwealth of
         Virginia,  with  respect  to an  matter  or thing  arising  out of this
         Agreement or pursuant thereto.

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