SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                       Commission file number 333-37917-01

                            HIGHLANDS CAPITAL TRUST I
                 (Name of Small Business Issuer in its Charter)

                Delaware                                    Pending
      (State or Other Jurisdiction                      (I.R.S. Employer
           of Incorporation)                          Identification No.)

          340 West Main Street
           Abingdon, Virginia                                24210
(Address of Principal Executive Offices)                   (Zip Code)

                                 (540) 628-9181
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:

                                                  Name of Each Exchange
         Title of Each Class                       on Which Registered
         -------------------                       -------------------

                 None                                      n/a

         Securities registered under Section 12(g) of the Exchange Act:

                           $2.3125 Capital Securities
                (Liquidation Amount $25.00 per Capital Security)
                     and the Guarantee with respect thereto
                                (Title of Class)

         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 such  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  ____

         Indicate by check mark  if disclosure of delinquent  filers pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to  the  best  of  the  registrant's  knowledge,  in  the  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]


<PAGE>


         The aggregate  market value of the voting stock held by  non-affiliates
computed by reference to the average of the closing bid and asked prices of such
stock as of December 31, 1999: N/A

         The number of  outstanding  shares of Common  Stock as of December  31,
1999 was 9,000.


<PAGE>



         Highlands  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  October  3, 1997.  The Trust  exists  for the  exclusive
purposes  of (i)  issuing and selling  trust  securities  consisting  of $2.3125
Capital Securities (the "Capital Securities") and common securities (the "Common
Securities," and together with the Capital 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  Highlands
Bankshares, Inc., a Virginia corporation (the "Corporation"), and (iii) engaging
in only those other activities  necessary,  advisable or incidental thereto. The
Trust's sole assets are  $7,725,000  representing  the  principal  amount of the
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 $225,000 aggregate liquidation amount of Common Securities,  all of
which  are held by the  Corporation,  and by  $7,500,000  aggregate  liquidation
amount  of  Capital  Securities.  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.

         On January 21, 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 Capital 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 Capital Securities.

         Because  the  Trust  is a  special  purpose  financing  entity  with no
separate  business  operations  and the only  assets of the Trust are the Junior
Subordinated  Debt  Securities,  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-K.  For
further information  concerning the Corporation,  including financial statements
and other financial  information,  see the  Corporation's  Annual Report on Form
10-K for the year ended  December 31,  1999,  as filed with the  Securities  and
Exchange  Commission,  copies  of  which  may be  obtained  from  the  Corporate
Secretary of the Corporation at 340 West Main Street, Abingdon, Virginia 24210.

         The following documents are exhibits to this report:

         4.1      Certificate of Trust of the Trust,  included as Exhibit 4.1 to
                  the Corporation's and Trust's  Registration  Statement on Form
                  S-2,  Registration Nos.  333-37917 and 333-37917-01 (the "Form
                  S-2"), and incorporated herein by reference.

         4.2      Form of  Amended  and  Restated  Declaration  of  Trust of the
                  Trust,   included  as  Exhibit  4.2  to  the  Form  S-2,   and
                  incorporated herein by reference.

         4.3      Form of Junior Subordinated  Indenture between the Corporation
                  and Wilmington Trust Company, as Trustee,  included as Exhibit
                  4.3 to the Form S-2, and incorporated herein by reference.

         4.4      Form of Capital  Security, included in Exhibit 4.2 to the Form
                  S-2, and incorporated herein by reference.

<PAGE>

         4.5      Form of Junior Subordinated Debt Security, included in Exhibit
                  4.3 to the Form S-2, and incorporated herein by reference.

         4.6      Form  of  Guarantee   Agreement  with  respect  to  the  Trust
                  Securities issued by the Trust, included as Exhibit 4.6 to the
                  Form S-2, and incorporated herein by reference.

         4.7      Form of Escrow  Agreement among McKinnon & Company,  Inc., the
                  Trust, the Corporation and Wilmington Trust Company,  included
                  in Exhibit  4.7 to the Form S-2,  and  incorporated  herein by
                  reference.

         4.8      Trust Agreement  between the Corporation and Wilmington  Trust
                  Company,  included  as  Exhibit  4.8  to  the  Form  S-2,  and
                  incorporated herein by reference.




<PAGE>


                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                               HIGHLANDS CAPITAL TRUST I



Dated:  March 30, 2000                         By:  /s/ Samuel L. Neese
                                                  --------------------------
                                                      Samuel L. Neese
                                                      Administrative Trustee



Dated:  March 30, 2000                         By:  /s/ James T. Riffe
                                                  --------------------------
                                                      James T. Riffe
                                                      Administrative Trustee




<PAGE>


                                  EXHIBIT INDEX

       Number                       Document
       ------                       --------

         4.1      Certificate of Trust of the Trust,  included as Exhibit 4.1 to
                  the Corporation's and Trust's  Registration  Statement on Form
                  S-2,  Registration Nos.  333-37917 and 333-37917-01 (the "Form
                  S-2"), and incorporated herein by reference.

         4.2      Form of  Amended  and  Restated  Declaration  of  Trust of the
                  Trust,   included  as  Exhibit  4.2  to  the  Form  S-2,   and
                  incorporated herein by reference.

         4.3      Form of Junior Subordinated  Indenture between the Corporation
                  and Wilmington Trust Company, as Trustee,  included as Exhibit
                  4.3 to the Form S-2, and incorporated herein by reference.

         4.4      Form of Capital Security,  included in Exhibit 4.2 to the Form
                  S-2, and incorporated herein by reference.

         4.5      Form of Junior Subordinated Debt Security, included in Exhibit
                  4.3 to the Form S-2, and incorporated herein by reference.

         4.6      Form  of  Guarantee   Agreement  with  respect  to  the  Trust
                  Securities issued by the Trust, included as Exhibit 4.6 to the
                  Form S-2, and incorporated herein by reference.

         4.7      Form of Escrow  Agreement among McKinnon & Company,  Inc., the
                  Trust, the Corporation and Wilmington Trust Company,  included
                  in Exhibit  4.7 to the Form S-2,  and  incorporated  herein by
                  reference.

         4.8      Trust Agreement  between the Corporation and Wilmington  Trust
                  Company,  included  as  Exhibit  4.8  to  the  Form  S-2,  and
                  incorporated herein by reference.