SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2001

                       Commission file number 333-37917-01


                            HIGHLANDS CAPITAL TRUST I
             (Exact Name of Registrant as Specified in its Charter)


                Delaware                                    51-6516421
      (State or Other Jurisdiction                       (I.R.S. Employer
   of Incorporation or Organization)                   Identification No.)

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

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


         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  _____

         The number of outstanding shares of Common Stock as of March 31, 2001
was 9,000.


       o    This Form 10-Q also covers  300,000 of the  Registrant's  $2.3125
            Capital Securities, and the Guarantee with respect thereto.



<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

Item 1.       Financial Statements.   (See Note Below)

Item 2.       Management's Discussion and Analysis of Financial Condition and
              Results of Operations.

         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 that 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.

Item 3.       Quantitative and Qualitative Disclosures About Market Risk.
             (See Note Below)


NOTE: 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-Q. 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, 2000 and the Corporation's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2000, June 30, 2000 and September 30, 2000, 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.



<PAGE>


                                     PART II
                                OTHER INFORMATION

Item 1.           Legal Proceedings.

                  None.

Item 2.           Changes in Securities and Use of Proceeds.

                  None.

Item 3.           Defaults Upon Senior Securities.

                  None.

Item 4.           Submission of Matters to a Vote of Security Holders.

                  None.

Item 5.           Other Information.

                  None.

Item 6.           Exhibits and Reports on Form 8-K.

                  (a)      Exhibits.

                           None.

                  (b)      Reports on Form 8-K.

                           None.


<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

                                            HIGHLANDS CAPITAL TRUST I



Date:  May 11, 2001                         By:  /s/ Samuel L. Neese
                                               ---------------------------------
                                               Name:    Samuel L. Neese
                                               Title:   Administrative Trustee
                                                        (as principal executive
                                                         officer and on behalf
                                                         of the Registrant)



Date:  May 11, 2001                         By:  /s/ James T. Riffe
                                               ---------------------------------
                                               Name:    James T. Riffe
                                               Title:   Administrative Trustee
                                                        (as principal financial
                                                         officer)