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Exhibit
      99.1





Highlands
      Bankshares, Inc. (OTCBB: HBSI) announces its results of operations for the
      year
      ended December 31, 2006.





Highlands
      Bankshares’ 2006 operations produced annual net income of $4,515,000, or $3.14
      per share of common stock. This compares to income of $3,802,000 for the year
      ended December 31, 2005, an increase of 18.75%, and, for the third consecutive
      year, represents record net income for the company. Assets at December 31,
      2006
      were $357,136,000, an increase of 5.85% over assets of $337,573,000 at the
      end
      of 2005. Total shareholders’ equity at December 31, 2006 was
      $37,076,000.





Income
      for the year produced a return on average assets (ROAA) of 1.32% and a return
      on
      average equity (ROAE) of 12.67% compared to an ROAA of 1.21% and an ROAE of
      11.53% achieved during 2005.





Income
      for the fourth quarter of 2006 income was $1,154,000 compared to income of
      $1,092,000 for the same quarter a year ago. Income for the quarter produced
      an
      ROAA of 1.29% and an ROAE of 12.41%. This compares to an ROAA of 1.31% and
      an
      ROAE of 12.72% during the final quarter of 2005.





During
      2006, Highlands paid dividends to its shareholders totaling 94 cents per share,
      an increase of 14.63% compared to dividends paid to shareholders in 2005. On
      January 9, 2007, the Company announced a dividend of 25 cents per share payable
      on February 15, 2007 to shareholders of record February 1, 2007.





Commenting
      on the 2006 results, Butch Porter, President and Chief Executive Officer said,
      “I am very happy to announce our third straight year of record annual income.
      After seeing a decline in income from 2002 to 2003, Highlands has continued
      to
      increased income in the years since. I am especially pleased with our continued
      elevated levels of return on assets and return on equity.”





Porter
      continued, “During 2006 the Company experienced solid asset growth, especially
      in loans, with balances of loans outstanding increasing $22.8 million from
      December 31 of 2005 to December 31 of 2006. This increase, coupled with our
      efforts at better asset and liability management contributed to a 13.76%
      increase in net interest income. In addition, Highlands experienced satisfying
      growth in non-interest income.”





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Porter
      also took the opportunity to thank the employees and customers of Highlands
      Bankshares by saying, “The employees of Highlands and its subsidiaries deserve
      congratulations for a job well done during 2006. We would also like to thank
      our
      customers for their business and we look forward to continuing to serve their
      banking needs.”





Highlands
      Bankshares Inc. is a financial holding company operating 11 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.





As
      of
      January 26, 2007, Smith Elliott Kearns & Company, LLC, Highlands’ Registered
      Independent Certified Public Accounts, had not issued an opinion letter relating
      to its audit of Highlands’ 2006 results of operations or balance sheet as of
      December 31, 2006. Therefore, the results of operations for 2006 and asset,
      liability and capital totals for December 31, 2006 contained in the text above
      should not be construed as audited results. Certain  statements
      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.