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, 2000

                       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, 2000
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, 1999, and the  Corporation's  Quarterly Report on Form 10-Q for the
quarter  ended  March  31,  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:  August 11, 2000             By: /s/ Samuel L. Neese
                                      ------------------------------------------
                                      Name:  Samuel L. Neese
                                      Title: Administrative Trustee
                                             (as principal executive officer and
                                              on behalf of the Registrant)



Date:  August 11, 2000             By: /s/ James T. Riffe
                                      ------------------------------------------
                                      Name:  James T. Riffe
                                      Title: Administrative Trustee
                                             (as principal financial officer)