On August 1, 2019, Edward M. Rosinus resigned as a director of Highlands Bankshares, Inc. (the “Company”) and Highlands Union Bank (the “Bank”). Edward M. Rosinus was appointed as a director pursuant to the Securities Purchase Agreement (the “Agreement”) dated as of April 14, 2014 by and among the Company and TNH Financials Fund, L.P. (the “Investor”). Edward M. Rosinus’s resignation is not due to a disagreement with the Company’s Board of Directors or management or on any matter relating to the Company’s operations, policies or procedures. Pursuant to the Agreement, the Investor designated Michael F. Rosinus as the replacement director of the Company and the Bank and, on August 1, 2019, the Company’s and the Bank’s Board of Directors appointed Michael F. Rosinus as a director of the Company and the Bank. Also pursuant to the Agreement, Michael F. Rosinus will enter into the Company’s standard Director Indemnification Agreement, which has been previously filed. The Company expects that Michael F. Rosinus will be appointed to the Risk Committee and the Nominating & Corporate Governance Committee. Michael F. Rosinus will not receive compensation for his service as a director pursuant to the Agreement. Michael F. Rosinus is not a party to any transaction that would be required to be disclosed under Section 404(a) of Regulation S-K.