Page
      3





Exhibit
      99.1





Highlands
      Bankshares, Inc. (OTCBB: HBSI) announces its results of operations for the
      first
      half of 2007.




Operations
      during the first six months of the year produced net income of $2,244,000 or
      $1.56 per share. This compares to income of $2,205,000 for the same period
      a
      year ago, an increase of 1.77%. Return on Average Assets (ROAA) for the six
      month period ended June 30, 2007 was 1.23% and Return on Average Equity (ROAE)
      was 11.96%. This compares to ROAA of 1.32% for the first six months of 2006
      and
      ROAE of 12.78% for the same period.




Assets
      have increased 5.53% since December 31, 2006 and at June 30, 2007 totaled
      $377,086,000. The balance of shareholders’ equity at June 30, 2007 was
      $38,569,000.




Income
      for the second quarter of 2007 was $1,123,000 compared to income of $1,201,000
      for the same quarter in 2006, a decline of 6.49%.  ROAA for the
      quarter was 1.21% and ROAE was 11.78%. Second quarter 2006 income was increased
      by a non-recurring gain of $155,000 related to an insurance
      settlement.




During
      the quarter, Highlands paid dividends to its shareholders of 25 cents per
      share.




Commenting
      on the results, Butch Porter, President and Chief Executive Officer stated,
“I’m
      pleased to announce that our year-to-date results are greater than those
      produced a year ago. Considering the impact of non-recurring income on the
      2006
      figures, it is a testament to the hard work of the employees within the
      Highlands organization that we have posted an increase in income.




Porter
      continued, “During the year we’ve seen our asset base increase as both loans and
      deposits, the core of operations for any community bank like ourselves, continue
      to grow. This has had the positive impact of allowing growth in net interest
      income to outpace increases in operational expenses.”




Highlands
      Bankshares, Inc. is a bank holding company operating eleven banking locations
      in
      West Virginia and Virginia through its two wholly owned subsidiary banks, The
      Grant County Bank and Capon Valley Bank, and insurance services through its
      wholly owned subsidiary HBI Life Insurance Company.




Certainstatements
      in this release may constitute “forward-looking statements” within the meaning
      of the Private Securities Litigation Reform Act of
      1995.  Forward-looking statements are statements that include
      projections, predictions, expectations or beliefs about future events or results
      or otherwise are not statements of historical fact.  Although the
      Company believes that its expectations with respect to certain forward-looking
      statements are based upon reasonable assumptions within the bounds of its
      existing knowledge of its business and operations, there can be no assurance
      that actual results, performance or achievements of the Company will not differ
      materially from any future results, performance or achievements expressed or
      implied by such forward-looking statements. The Company does not update any
      forward-looking statements that may be made from time to time by or on behalf
      of
      the Company.