Highlands Bankshares : Call Report - December 31, 2021

FR Y-9SP

OMB Number 7100-0128

Approval expires January 31, 2025

Page 1 of 9

Board of Governors of the Federal Reserve System

Parent Company Only Financial Statements for Small Holding Companies - FR Y-9SP

Report at the close of business as of the last calendar day of June and December

This Report is required by law: Section 5(c) of the Bank Holding Company Act (12 U.S.C. § 1844) and Section 225.5(b) of Regulation Y [12 C.F.R § 225.5(b)] and Section 10 of the Home Owner's Loan Act(12 U.S.C § 1467a(b)).

This report form is to be filed by the parent company of small holding companies. For purposes of this report, small holding companies are holding companies that have total consolidated assets of less than $3 billion, except holding companies that

meet certain criteria to file the Consolidated Financial Statement for Holding Companies (FR Y-9C). When such holding companies are tiered holding companies, separate reports

are also to be filed by each of the subsidiary holding companies. The Federal Reserve may not conduct or sponsor, and an organization (or a person) is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

NOTE: The Parent Company Only Financial Statements for Small Holding Companies must be signed and attested by the Chief Financial Officer (CFO) of the reporting holding company (or by the individual performing this equivalent function).

I, the undersigned CFO (or equivalent) of the named

holding company, attest that the Parent Company Only Financial Statements for Small Holding Companies for this report

date have been prepared in conformance with the instructions issued by the Federal Reserve System and are true and correct to the best of my knowledge and belief.

Sarah H Nottingham, Financial Officer

Printed Name of Chief Financial Officer (or Equivalent) (BHSP C490)

Signature of Chief Financial Officer (or Equivalent) (BHSPH321)

Date of Signature (MM/DD/YYYY) (BHSX J196)

Date of Report:

December 31, 2021

Month / Day / Year (BHSP 9999)

Highlands Bankshares, Inc.

Legal Title of Holding Company (RSSD 9017)

P.O. Box 929

(Mailing Address of the Holding Company) Street / P.O. Box (RSSD 9110)

Petersburg, WV 26847

City (RSSD 9130)

State (RSSD 9200) Zip Code (RSSD 9220)

Holding companies must maintain in their files a manually signed and attested printout of the data submitted.

For Federal Reserve Bank Use Only

RSSD ID _____________________________

C.I. _______________

S.F. __________

Person to whom questions about this report should be directed:

Sarah H Nottingham, Financial Officer

Name / Title (BHSX 8901)

[phone]

Area Code / Phone Number (BHSX 8902)

[phone]

Area Code / FAX Number (BHSX 9116)

[e-mail]

E-mail Address of Contact (BHSX 4086)

Is confidential treatment requested for any	0=No	BHSP
portion of this report submission?	1=Yes	C447	NO
In accordance with the General Instructions for this report	(check only one),

1. a letter justifying this request is being provided along with the
   report (BHSP KY38)______________________________________________
2. a letter justifying this request has been provided separately (BHSP KY38)___

Public reporting burden for this information collection is estimated to vary from 1.5 to 8 hours per response, with an average of 5.4 hours per response, including time to gather and maintain data in the required form and to review instructions and complete the information collection. Comments regarding this burden estimate or any other aspect of this information collection, including suggestions for reducing the burden, may be sent to Secretary, Board of Governors of the Federal Reserve System,20th and C streets, NW, Washington, DC 20551, and to the Office of Management and Budget, Paperwork Reduction Project (7100-0128), Washington, DC 20503.

FR Y-9SP

Page 2 of 9

Chief Executive Officer Contact Information

This information is being requested so the Board can distribute notifications about policy initiatives and other matters directly to the Chief Executive Officers of reporting institutions. Please provide contact information for the Chief Executive Officer of the reporting institution. Enter "none" for the Chief Executive Officer's email address if not available. Chief Executive Officer contact information is for the confidential use of the Board and will not be released to the public.

Chief Executive Officer

Jack H. Walters

Name (BHSP FT42)

[phone]

Area Code / Phone Number / Extension (BHSP FT43)

[e-mail]

Email Address (BHSP FT44)

Highlands Bankshares, Inc.	FR Y-9SP
P.O. Box 929	Page 3 of 9
Petersburg, WV 26847

For Federal Reserve Bank Use Only

RSSD Number _______________

C.I. _____

S.F. _____

The Income Statement is to be reported on a calendar year-to-date basis in thousands of dollars.

Schedule SI - Income Statement

		Dollar Amounts in Thousands	BHSP	Amount
1.	Income from bank subsidiary(ies):
	a. Dividends_____________________________________________________________________________________________	0508	2,314
	b. Other income_________________________________________________________________________________________	2111	354
2.	Income from nonbank subsidiary(ies): [1]
	a. Dividends	0523	N/A
	b. Other income__________________________________________________________________________________________	0530	N/A
3.	Income from subsidiary holding company(ies): [2]
	a. Dividends	0206	N/A
	b. Other income	1283	N/A
4.	Other income	0447	5
5.	TOTAL OPERATING INCOME (Sum of items 1, 2, 3, and 4)______________________________________________________	4000	2,673
6.	Interest expense	4073	0
7.	Other expenses [3]	4093	541
8.	TOTAL OPERATING EXPENSE (Sum of items 6 and 7)	4130	541
9.a Income (loss) before change in net unrealized holding gains (losses) on equity securities not
	held for trading, applicable income taxes, and discontinued operations (item.5 minus 8)	HT69	2,132
	b.Change in net unrealized holding gains (losses) on equity securities not held for trading.[4]___________________________	HT70	N/A
	c. Income (loss) before applicable income taxes, discontinued operations and undistributed income
	(sum of items 9.a and 9b).________________________________________________________________________________	4250	2,132
10. Applicable income taxes (benefits) (estimated) (See instructions)_________________________________________________	4302	-53
11. Discontinued operations, net of applicable income taxes_________________________________________________________	FT28	0
12. Income (loss) before undistributed income of subsidiary(ies) (sum of items 9(c) and 11 minus 10)	0496	2,185
13. Equity in undistributed income (loss) of subsidiary(ies): (See instructions)
	a. Bank subsidiary(ies)	3156	2,751
	b. Nonbank subsidiary(ies)[1]	2112	N/A
	c. Subsidiary holding company(ies)[2]	3513	N/A
14. Net income (loss) (Sum of items 12 and 13)__________________________________________________________________	4340	4,936
MEMORANDA
1.	Cash dividends (or non-taxable distributions) declared by the holding company to its shareholders	3158	2,233
2.	Does the reporting holding company have a Subchapter S election in effect for federal	BHSP	YES / NO
	income tax purposes for the current tax year? (Enter "1" for YES ; "0" for NO)	A530	NO
3.	Interest expense paid to special-purpose subsidiaries that issued trust preferred	BHSP	Amount
	securities (included in item 7 above)__________________________________________________________________________	C254	0
Memorandum item 4 is to be completed by holding companies that have elected to account
for financial instruments or servicing assets and liabilities at fair value under a fair value option.
4.	Net change in fair values of financial instruments accounted for under a fair value option_____________________________	J980	N/A
Memorandum item 5 is to be completed by top tier holding companies with the December 31
report date only.
5. Does your holding company have 100 or more full-time equivalent employees on a consolidated	BHSP	YES / BLANK
	basis ? (Enter "1" for YES ; leave blank for NO)___________________________________________________	MZ36

1. Leave blank if the reporting holding company does not own a nonbank subsidiary.
2. Leave blank if the reporting holding company does not own a subsidiary holding company.
3. Holding companies that have adopted ASU 2016-13 should report provisions for credit losses on all financial assets and off-balance sheet credit exposures that fall within the scope of the standard.
4. Item 9.b is to be completed by all holding companies. See the instructions for this item and the FR Y-9C Glossary entry for "Securities Activities" for further detail on accounting for investments in equity securities.

1.a.

1.b.

2.a.

2.b.

3.a.

3.b.

4

5

6

7

8

9.a

9.b

9.c

10

11

12

13.a.

13.b.

13.c.

14

M.1.

M.2.

M.3.

M.4.

M.5.

Highlands Bankshares, Inc.	FR Y-9SP
P.O. Box 929	Page 4 of 9
Petersburg, WV 26847

Schedule SC - Balance Sheet

		Dollar Amounts in Thousands		BHSP	Amount
Assets
1. Cash and due from depository institutions:
a. Balances with subsidiary or affiliated depository institutions____________________________________________________	5993	786
b. Balances with unrelated depository institutions______________________________________________________________	0010	0
2. Securities [1]					0390	0
3. Loans and lease financing receivables (exclusive of loans and lease financing receivables
due from bank(s) and nonbank subsidiaries):
a. Loans and leases, held for investment and held for sale		2122		0
b. LESS: Allowance for loan and lease losses[2]____________________________________________	3123		0
c. Loans and leases, held for investment and held for sale, net of the allowance for loan and lease losses
(Item 3.a minus 3.b)__________________________________________________________________________________	2723	0
4. Investment in bank subsidiary(ies): (See instructions)
a. Equity investment_______________________________________________________________________________________	3239	58,622
b. Goodwill_______________________________________________________________________________________________	3238	0
c. Loans and advances to and receivables due from bank subsidiary(ies)___________________________________________	3148	0
5. Investment in nonbank subsidiary(ies): (See instructions)[3]
a. Equity investment_______________________________________________________________________________________	0088	N/A
b. Goodwill_______________________________________________________________________________________________	0087	N/A
c. Loans and advances to and receivables due from nonbank subsidiary(ies)					0089	N/A
6. Investment in subsidiary holding company(ies) (These items are to be completed
only by companies that have subsidiary holding companies):[4]
a. Equity investment_______________________________________________________________________________________	0201	N/A
b. Goodwill_______________________________________________________________________________________________	0202	N/A
c. Loans and advances to and receivables due from subsidiary holding company(ies)__________________________________	3523	N/A
7. Other assets[5]					0027	17
8. Balances due from related nonbank companies (other than investments)[6]________________________________________	3620	N/A
9. TOTAL ASSETS (Sum of items 1 through 8)__________________________________________________________________	2170	59,425
Liabilities and Equity Capital
10. Short-term borrowings:
a. Commercial paper_____________________________________________________________________________________	2309	0
b. Other short-term borrowings____________________________________________________________________________	2724	0
11. Long-term borrowings (includes limited-life preferred stock and related surplus)_____________________________________	3151	0
12. Accrued interest payable (See instructions)___________________________________________________________________	3166	0
13. Other liabilities__________________________________________________________________________________________	3167	0
14. Balances due to subsidiaries and related institutions:
a. Subsidiary bank(s)_____________________________________________________________________________________	3605	0
b. Nonbank subsidiaries and related institutions[3]					3621	N/A
15. Not applicable
16. Equity capital:
a. Perpetual preferred stock (including related surplus)_________________________________________________________	3283	0
b. Common stock (including related surplus)___________________________________________________________________	3230	8,846
c. Retained earnings					3247	56,822
d. Accumulated other comprehensive income [7]______________________________________________________________	B530	-2,871
e. Other equity capital components[8]______________________________________________________________________	A130	-3,372
f. Total equity capital (sum of items 16.a through 16.e)					3210	59,425
17. TOTAL LIABILITIES AND EQUITY CAPITAL (Sum of items 10 through 14.b, and 16.f)__________________________________	3300	59,425

1. Holding companies that have adopted ASU 2016-13 should report held-to-maturity securities in item 2 net of any applicable allowance for credit losses.
2. Holding companies that have adopted ASU 2016-13 should report in item 3.b the allowance for credit losses on loans and leases.
3. Leave blank if the reporting holding company does not own a nonbank subsidiary.
4. Leave blank if the reporting holding company does not own a subsidiary holding company.
5. Holding companies that have adopted ASU 2016-13 should report in item 7 amounts net of any applicable allowance for credit losses.
6. This item should be completed only by lower-tier holding companies. Lower-tier holding companies should leave this item blank

if no related nonbank companies exist

1. Includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and minimum pension liability adjustments.
2. Includes treasury stock and unearned Employee Stock Ownership Plan shares.

1.a.

1.b.

2

3.a.

3.b.

3.c.

4.a.

4.b.

4.c.

5.a.

5.b.

5.c.

6.a.

6.b.

6.c.

7

8

9

10.a.

10.b.

11

12

13

14.a.

14.b.

16.a.

16.b.

16.c.

16.d.

16.e.

16.f.

17

Highlands Bankshares, Inc.	FR Y-9SP
P.O. Box 929	Page 5 of 9
Petersburg, WV 26847

Schedule SC - Continued

Memoranda (to be completed annually only by top-tier and single-tier holding companies for the December 31 report date)
	BHSP	YES / NO
1. Has the holding company engaged in a full-scope independent external audit
at any time during the calendar year (Enter "1" for YES ; "0" for NO)	C884	N/A

2. If response to Memorandum item 1 is yes, indicate below the name and address of the holding company's independent external auditing firm (see instructions), and the name and e-mail address of the auditing firm's engagement partner. [9]

a.		b.
	(1) Name of External Auditing Firm (TEXT C703)		(1) Name of Engagement Partner (TEXT C704)

M.1

M.2

(2)	City (TEXT C708)			(2) E-mail Address (TEXT C705)
(3)	State Abbreviation (TEXT C714)	(4) Zip Code (TEXT C715)
					Dollar Amounts in Thousands
						BHSP		Amount
Memoranda items 3.a and 3.b are to be completed by holding companies
that have elected to account for financial instruments or servicing assets
and liabilities at fair value under a fair value option.
3. Financial assets and liabilities measured at fair value:
a. Total assets__________________________________________________________________________________________	F819		N/A	M.3.a
b. Total liabilities_______________________________________________________________________________________		F820		N/A	M.3.b

9. The Federal Reserve regards information submitted in response to Memorandum item 2.b. as confidential.