##### Table of Contents





United States
 Securities and Exchange
    Commission
 Washington, D.C.
    20549
  Form 10-Q
  QUARTERLY REPORT UNDER
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the
    quarterly period ended September 30, 2009
  Commission file number
    1-13805
  Harris Preferred Capital
    Corporation
    Maryland(State or other jurisdiction
    of incorporation or organization)

# 36-4183096(I.R.S. Employer
    Identification No.)111 West Monroe Street, Chicago, Illinois(Address of principal executive offices)

60603(Zip Code)   Registrants telephone number, including area code:
 (312) 461-2121
  Securities registered pursuant to Section 12(b) of the
    Act:
  Name of each exchange onTitle of each class

which registered73/8%
    Noncumulative Exchangeable Preferred Stock,
    Series A, par value $1.00 per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act: None
   þ o
   Regulation S-T(232.405
 o o
   12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o    Rule 12b-2
 o þ




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##### 





HARRIS
    PREFERRED CAPITAL CORPORATION
  TABLE OF
    CONTENTS
   
 Part

FINANCIAL INFORMATIONItem 1.

Financial Statements:Consolidated Balance Sheets


2Consolidated Statements of Income and
    Comprehensive Income


3Consolidated Statements of Changes in
    Stockholders Equity


4Consolidated Statements of Cash Flows


5Notes to Consolidated Financial Statements


6Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


10Item 3.

Quantitative and Qualitative Disclosures about
    Market Risk


25Item 4T.

Controls and Procedures


26PART II

OTHER INFORMATIONItem 6.

Exhibits


28Signatures


29EX-31.1EX-31.2EX-32.1




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATIONCONSOLIDATED BALANCE SHEETS
  September 30


December 31


September 302009


2008


2008(unaudited)


(audited)


(unaudited)(in thousands, except share data)AssetsCash on deposit with Harris N.A.

$
1,036


$
816


$
289Securities purchased from Harris N.A. under agreement to resell


20,676



5,863



16,810Total cash and cash equivalents

$
21,712


$
6,679


$
17,099Notes receivable from Harris N.A.


3,763



4,284



4,481Securities
    available-for-sale,
    at fair valueResidential mortgage-backed


539,377



488,282



446,962U.S. Treasury Bills


25,000







19,996Other assets


1,963



1,885



1,791Total assets

$
591,815


$
501,130


$
490,329Liabilities and Stockholders EquityAccrued expenses

$
1,328


$
112


$
55Deferred state tax liabilities


1,373



774



Total liabilities

$
2,701


$
886


$
55Commitments and contingenciesStockholders Equity73/8%
    Noncumulative Exchangeable Preferred Stock, Series A
    ($1 par value); liquidation value of $250,000;
    20,000,000 shares authorized, 10,000,000 shares issued
    and outstanding

$
250,000


$
250,000


$
250,000Common stock ($1 par value); 5,000 shares authorized;
    1,180 issued and outstanding at September 30, 2009, and
    1,000 shares authorized, issued and outstanding at
    December 31, 2008 and September 30, 2008.


1



1



1Additional paid-in capital


320,733



240,733



240,733Earnings in excess (less than) of distributions


950



(322
)


1,233Accumulated other comprehensive income (loss)  net
    unrealized gains (losses) on
    available-for-sale
    securities


17,430



9,832



(1,693
)Total stockholders equity

$
589,114


$
500,244


$
490,274Total liabilities and stockholders equity

$
591,815


$
501,130


$
490,329   The accompanying notes are an integral part of these
    financial statements.
 2




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME
    AND COMPREHENSIVE INCOME
    (Unaudited)
  Quarter Ended September 30,


Nine Months Ended September 30,2009


2008


2009


2008(in thousands, except share data)Interest income:Securities purchased from Harris N.A. under agreement to resell

$
7


$
101


$
24


$
909Notes receivable from Harris N.A.


60



73



187



233Securities
    available-for-sale:Residential Mortgage-backed


5,793



5,097



16,787



14,885U.S. Treasury Bills






3



2



19Total interest income

$
5,860


$
5,274


$
17,000


$
16,046Operating expenses:Loan servicing fees paid to Harris N.A.

$
3


$
4


$
9


$
11Advisory fees paid to Harris N.A.


40



53



136



155General and administrative


91



77



286



237Total operating expenses

$
134


$
134


$
431


$
403Income before income taxes

$
5,726


$
5,140


$
16,569



15,643Applicable state income taxes


418







1,210



Net Income

$
5,308


$
5,140


$
15,359


$
15,643Preferred stock dividends


4,609



4,610



13,827



13,827Net income available to common stockholder

$
699


$
530


$
1,532


$
1,816Basic and diluted earnings per common share

$
593


$
530


$
1,346


$
1,816Average number of common shares outstanding


1,180



1,000



1,138



1,000Net income

$
5,308


$
5,140


$
15,359


$
15,643Other comprehensive income (loss):Available-for-sale
    securities:Unrealized holding gains (losses) arising during the period, net
    of deferred state taxes

$
6,692


$
1,926


$
7,599


$
(686
)Less reclassification adjustment for realized (gains) losses
    included in net income














Comprehensive income

$
12,000


$
7,066


$
22,958


$
14,957   The accompanying notes are an integral part of these
    financial statements.
 3




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN
    STOCKHOLDERS EQUITY
    (Unaudited)
  Nine Months EndedSeptember 302009


2008(in thousands)Balance at January 1

$
500,244


$
489,794Net income


15,359



15,643Other comprehensive income (loss)


7,599



(686
)Capital contribution and issuance of common stock


80,000



Dividends common stock ($229.77 and $650.00 per share)


(261
)


(650
)Dividends preferred stock ($0.4609 per share)


(13,827
)


(13,827
)Balance at September 30

$
589,114


$
490,274   The accompanying notes are an integral part of these
    financial statements.
 4




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
  Nine Months Ended September 30,2009


2008(in thousands)Operating Activities:Net income

$
15,359


$
15,643Adjustments to reconcile net income to net cash provided by
    operating activities:Net increase in other assets


(78
)


(262
)Net increase (decrease) in accrued expenses


1,216



(74
)Net cash provided by operating activities

$
16,497


$
15,307Investing Activities:Repayments of notes receivable from Harris N.A.

$
521


$
854Purchases of securities
    available-for-sale


(286,618
)


(211,608
)Proceeds from maturities/redemptions of securities
    available-for-sale


218,721



213,158Net cash (used in) provided by investing activities

$
(67,376
)

$
2,404Financing Activities:Cash dividends paid on preferred stock

$
(13,827
)

$
(13,827
)Cash dividends paid on common stock


(261
)


(3,650
)Capital contribution and issuance of common stock


80,000



Net cash provided by (used in) provided by financing activities

$
65,912


$
(17,477
)Net increase in cash on deposit with Harris N.A.

$
15,033


$
234Cash and cash equivalents with Harris N.A. at beginning of period


6,679



16,865Cash and cash equivalents with Harris N.A. at end of period

$
21,712


$
17,099   The accompanying notes are an integral part of these
    financial statements.
 5




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation    Form 10-K.
    2.
    Commitments
    and Contingencies    3.
    Securities  320-10-65-1 FAS 115-2 FAS 124-2 other-than-temporary available-for-sale held-to-maturity,
 6




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  available-for-sale
  September 30, 2009Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(in thousands)Available-for-Sale
    SecuritiesResidential mortgage-backed

$
520,574


$
18,803


$



$
539,377U.S. Treasury


25,000











25,000$
545,574


$
18,803


$



$
564,377   December 31, 2008Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(in thousands)Available-for-Sale
    SecuritiesResidential mortgage-backed

$
477,678


$
10,720


$
116


$
488,282   September 30, 2008Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value(in thousands)Available-for-Sale
    SecuritiesResidential mortgage-backed

$
448,654


$
1,489


$
3,181


$
446,962U.S. Treasury


19,997







1



19,996$
468,651


$
1,489


$
3,182


$
466,958   available-for-sale. Available-for-sale available-for-sale
   7




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  other-than-temporarily
  September 30, 2009Length of Continuous Unrealized Loss PositionLess than 12 months


12 months or longer


TotalUnrealized





Unrealized





UnrealizedFair Value


Loss


Fair Value


Losses


Fair Value


Losses(in thousands)Residential mortgage-backed

$



$



$



$



$



$
U.S. Treasury






















Total

$



$



$



$



$



$
   December 31, 2008Length of Continuous Unrealized Loss PositionLess than 12 months

12 months or longer

TotalUnrealized



Unrealized



UnrealizedFair Value

Loss

Fair Value

Losses

Fair Value

Losses(in thousands)Residential mortgage-backed

$
35,618


$
112


$
16,937


$
4


$
52,555


$
116   September 30, 2008Length of Continuous Unrealized Loss PositionLess than 12 months


12 months or longer


TotalUnrealized





Unrealized





UnrealizedFair Value


Loss


Fair Value


Losses


Fair Value


Losses(in thousands)Residential mortgage-backed

$
147,090


$
863


$
151,042


$
2,318


$
298,132


$
3,181U.S. Treasury


19,996



1











19,996



1Total

$
167,086


$
864


$
151,042


$
2,318


$
318,128


$
3,182   available-for-sale
  September 30, 2009Amortized


FairCost


ValueMaturities:Within 1 year

$
32,081


$
32,1881 to 5 years


43,424



44,4415 to 10 years


126,451



133,139Over 10 years


343,618



354,609Total

$
545,574


$
564,377   4.
    Fair
    Value Measurements  820-10 FAS 157-4 825-10 FAS 107-1 28-1,
 8




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  320-10 FSP FAS 115-2 FAS 124-2 Other-Than-Temporary available-for-sale held-to-maturity,
      Fair Value


Fair Value Measurements UsingSeptember 30, 2009


Level 1


Level 2


Level 3(in thousands)Available-for-sale
    securities:Residential mortgage-backed

$
539,377


$



$
539,377


$
U.S. Treasury


25,000



25,000







$
564,377


$
25,000


$
539,377


$
   Fair Value


Fair Value Measurements UsingDecember 31, 2008


Level 1


Level 2


Level 3(in thousands)Available-for-sale
    securities:Residential mortgage-backed

$
488,282


$



$
488,282


$
   Fair Value


Fair Value Measurements UsingSeptember 30, 2008


Level 1


Level 2


Level 3(in thousands)Available-for-sale
    securities:Residential mortgage-backed

$
446,962


$



$
446,962


$
U.S. Treasury


19,996



19,996







$
466,958


$
19,996


$
446,962


$
   5.
    Fair
    Value of Financial Instruments  item-by-item
 9




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
        available-for-sale
    September 30, 2009Carrying


FairValue


Value(in thousands)AssetsCash on deposit with Harris N.A.

$
1,036


$
1,036Securities purchased from Harris N.A. under agreement to resell


20,676



20,676Notes receivable from Harris N.A.


3,763



5,829Securities
    available-for-sale


564,377



564,377Accrued interest receivable


1,963



1,963Total on-balance-sheet financial assets

$
591,815


$
593,881   Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Information
  Form 10-Q Form 10-Q, Form 10-K Form S-11 No. 333-40257),
 10




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  Results
    of Operations
  Third
    Quarter 2009 Compared with Third Quarter 2008
    available-for-sale
      available-for-sale. Available-for-sale available-for-sale
  other-than-temporary
  Nine
    Months Ended September 30, 2009 compared with
    September 30, 2008
   11




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  available-for-sale available-for-sale
        Liquidity
    Risk Management
   12




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
         available-for-sale available-for-sale. available-for-sale available-for-sale,
  Market
    Risk Management
    Accounting
    Pronouncements
       13




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
      2009-05, (ASU 2009-05) 2009-05 2009-05
  Tax
    Matters
    Subsequent
    Events
    Financial
    Statements of Harris N.A.
   14




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CONDITION
  September 30


December 31


September 302009


2008


2008(unaudited)


(audited)


(unaudited)(in thousands except share data)ASSETSCash and demand balances due from banks

$
873,618


$
1,072,255


$
5,653,314Money market assets:Interest-bearing deposits at banks ($4.6 billion,
    $24.7 billion, and $0 held at Federal Reserve Bank at
    September 30, 2009, December 31, 2008, and
    September 30, 2008, respectively)


5,406,077



26,031,291



833,011Federal funds sold and securities purchased under agreement to
    resell


73,780



182,063



1,403,085Total cash and cash equivalents

$
6,353,475


$
27,285,609


$
7,889,410Securities
    available-for-sale
    at fair value (amortized cost of $6.7 billion,
    $9.2 billion and $8.2 billion at September 30,
    2009, December 31, 2008 and September 30, 2008,
    respectively)


6,851,813



9,283,283



8,192,457Trading account assets and derivative instruments


745,975



1,367,833



1,240,223Loans, net of unearned income


23,030,674



26,396,381



27,771,882Allowance for loan losses


(693,124
)


(574,224
)


(514,991
)Net loans

$
22,337,550


$
25,822,157


$
27,256,891Loans held for sale


47,275



29,544



23,051Premises and equipment


526,488



533,516



533,973Bank-owned insurance


1,329,400



1,304,315



1,292,934Goodwill and other intangible assets


760,836



779,444



803,079Other assets


908,386



900,354



732,427Total assets

$
39,861,198


$
67,306,055


$
47,964,445LIABILITIESDeposits in domestic offices  noninterest-bearing

$
6,670,922


$
28,059,575


$
12,492,356 interest-bearing (includes $554.8 million, $77.7 million, and $68.7 million measured at fair value at September 30, 2009, December 31, 2008 and September 30, 2008, respectively)


18,794,752



24,374,034



22,865,888Deposits in foreign offices     
    interest-bearing


1,335,451



920,235



1,332,890Total deposits

$
26,801,125


$
53,353,844


$
36,691,134Federal funds purchased


246,363



78,525



135,700Securities sold under agreement to repurchase


2,194,755



3,501,758



906,836Short-term borrowings


585,341



359,476



336,802Short-term senior notes






75,000



75,000Accrued interest, taxes and other expenses


188,452



247,825



213,213Accrued pension and post-retirement


106,971



171,933



54,928Other liabilities


581,463



631,487



342,931Long-term notes  senior/unsecured


2,396,500



2,096,500



2,096,500Long-term notes  senior/secured


2,375,000



2,375,000



2,375,000Long-term notes  subordinated


292,750



292,750



292,750Total liabilities

$
35,768,720


$
63,184,098


$
43,520,794STOCKHOLDERS EQUITYCommon stock ($10 par value); authorized
    40,000,000 shares; issued and outstanding
    17,149,512 shares at September 30, 2009,
    December 31, 2008, and September 30, 2008

$
171,495


$
171,495


$
171,495Surplus


2,174,661



2,172,029



2,171,386Retained earnings


1,640,337



1,734,472



1,890,968Accumulated other comprehensive loss


(144,015
)


(206,039
)


(40,198
)Stockholders equity before noncontrolling
    interest  preferred stock of subsidiary

$
3,842,478


$
3,871,957


$
4,193,651Noncontrolling interest  preferred stock of subsidiary


250,000



250,000



250,000Total stockholders equity

$
4,092,478


$
4,121,957


$
4,443,651Total liabilities and stockholders equity

$
39,861,198


$
67,306,055


$
47,964,445   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 15




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME(Unaudited)
  Quarter Ended September 30,


Nine Months Ended September 30,2009


2008


2009


2008(in thousands)Interest IncomeLoans

$
282,715


$
361,763


$
882,658


$
1,110,630Money market assets:Deposits at banks


4,332



4,373



14,411



13,977Federal funds sold and securities purchased under agreements to
    resell


22



3,722



167



14,968Trading account assets


1,786



5,338



6,882



12,406Securities
    available-for-sale:U.S. Treasury and federal agency


22,168



56,053



82,489



194,466State and municipal


13,435



13,576



40,840



38,609Other


2,204



2,972



11,921



14,078Total interest income

$
326,662


$
447,797


$
1,039,368


$
1,399,134Interest ExpenseDeposits

$
61,733


$
128,360


$
256,522


$
458,096Short-term borrowings


2,057



18,098



6,367



56,356Short-term senior notes


407



2,569



1,726



14,857Long-term notes  senior/unsecured


24,386



15,662



65,240



52,361Long-term notes  senior/secured


13,448



14,782



34,025



51,506Long-term notes  subordinated


728



2,387



3,459



8,524Total interest expense

$
102,759


$
181,858


$
367,339


$
641,700Net Interest Income

$
223,903


$
265,939


$
672,029


$
757,434Provision for loan losses


181,652



130,198



421,888



282,721Net Interest Income after Provision for Loan Losses

$
42,251


$
135,741


$
250,141


$
474,713Noninterest IncomeTrust and investment management fees

$
19,247


$
22,216


$
57,886


$
67,612Net money market and bond trading income (loss), including
    derivative activity


6,522



(556
)


15,731



(118
)Foreign exchange


2,912



2,350



8,312



4,750Service charges and fees


52,365



53,497



151,827



152,753Equity securities gains, net


2,301



5,908



6,238



44,280Net securities gains (losses), other than trading


677



(450
)


29,663



10,478Bank-owned insurance


11,139



13,412



33,665



40,067Letter of credit fees


4,998



4,100



15,359



11,846Loan sale gains, net


6,331



487



17,463



3,458Other


11,787



11,161



31,024



34,107Total noninterest income

$
118,279


$
112,125


$
367,168


$
369,233Noninterest ExpensesSalaries and other compensation

$
104,844


$
103,188


$
302,961


$
309,531Pension, profit sharing and other employee benefits


23,451



24,760



77,758



79,822Net occupancy


24,922



25,014



75,940



74,058Equipment


16,622



17,467



51,203



49,723Marketing


13,283



13,662



31,900



34,998Communication and delivery


7,520



8,277



22,416



23,723Professional fees


19,388



32,172



68,766



81,263Outside information processing, database and network fees


9,098



10,789



26,779



30,252FDIC Insurance


8,983



4,810



52,687



7,351Intercompany services, net


2,368



7,071



1,986



19,615Visa indemnification (reversal) charge


(3,000
)


7,000



(3,000
)


(10,000
)Other


19,768



36,126



60,799



74,966Amortization of intangibles


5,746



7,745



19,933



22,186Total noninterest expenses

$
252,993


$
298,081


$
790,128


$
797,488(Loss) income before income tax benefit

$
(92,463
)

$
(50,215
)

$
(172,819
)

$
46,458Applicable income tax benefit


(43,829
)


(29,407
)


(92,513
)


(16,744
)Net (loss) income before noncontrolling interest 
    dividends on preferred stock of subsidiary

$
(48,634
)

$
(20,808
)

$
(80,306
)

$
63,202Noncontrolling interest  dividends on preferred stock
    of subsidiary


4,609



4,609



13,828



13,828Net (Loss) Income Available for Common Stockholder

$
(53,243
)

$
(25,417
)

$
(94,134
)

$
49,374   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 16




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
  Quarter Ended


Nine Months EndedSeptember 30,


September 30,2009


2008


2009


2008(in thousands)Net (loss) income available for common stockholder

$
(53,243
)

$
(25,417
)

$
(94,134
)

$
49,374Other comprehensive income (loss):Cash flow hedges:Net unrealized (loss) gain on derivative instruments, net of tax
    benefit for the quarter of $17,651 in 2009 and $11,827 in 2008
    and net of tax expense (benefit) for the
    year-to-date
    period of $12,266 in 2009 and ($8,979) in 2008


(32,780
)


(21,963
)


22,781



(16,672
)Less reclassification adjustment for realized loss included in
    net (loss) income, net of tax benefit for the quarter of $853 in
    2009 and $1,070 in 2008 and net of tax benefit for the
    year-to-date
    period of $2,935 in 2009 and $3,949 in 2008


1,585



1,987



5,450



7,333Pension and postretirement medical benefit plans:Net gain and net prior service cost included in net (loss)
    income, net of tax expense for the quarter of $0 in 2009 and
    2008 and net of tax expense for the
    year-to-date
    period of $3,531 in 2009 and $511 in 2008










6,556



949Less reclassification adjustment for amortization included in
    net (loss) income, net of tax benefit for the quarter of $366 in
    2009 and $108 in 2008 and net of tax benefit for the
    year-to-date
    period of $1,100 in 2009 and $323 in 2008


681



200



2,042



599Available-for-sale
    securities:Unrealized holding gain arising during the period, net of tax
    expense for the quarter of $9,247 in 2009 and $1,670 in 2008 and
    net of tax expense for the
    year-to-date
    period of $16,194 in 2009 and $1,086 in 2008


32,266



3,088



45,187



2,031Less reclassification adjustment for realized gain included in
    net (loss) income, net of tax expense for the quarter of $258 in
    2009 and $7 in 2008 and net of tax expense for the
    year-to-date
    period of $10,765 in 2009 and $3,831 in 2008


(480
)


(12
)


(19,992
)


(7,116
)Other comprehensive income (loss)

$
1,272


$
(16,700
)

$
62,024


$
(12,876
)Comprehensive (loss) income available for common
    stockholder

$
(51,971
)

$
(42,117
)

$
(32,110
)

$
36,498   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 17




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (Unaudited)
  2009


2008(in thousands)Balance at January 1

$
4,121,957


$
4,038,342Net (loss) income before dividends on preferred stock of
    subsidiary


(80,306
)


63,202Contributions to capital surplus






387,669Issuance of common stock






16,347Stock option exercise


800



1,329Tax benefit from stock option exercise


1,831



1,779Dividends  ($1.80 in 2008 per common share)






(38,000
)Dividends  preferred stock of subsidiary


(13,828
)


(13,828
)Adjustment to initially apply FASB ASC
    715-60






(313
)Other comprehensive income (loss)


62,024



(12,876
)Balance at September 30

$
4,092,478


$
4,443,651   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 18




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Unaudited)
  Nine Months Ended September 302009


2008(in thousands)Operating Activities:Net (loss) income available for common stockholder

$
(94,134
)

$
49,374Adjustments to reconcile net (loss) income available for common
    stockholder to net cash provided by (used in) operating
    activities:Provision for loan losses


421,888



282,721Depreciation and amortization, including intangibles


80,747



71,295Deferred tax benefit


(31,057
)


(31,321
)Tax benefit from stock options exercise


1,831



1,779Other than temporary impairment on securities


1,093



469Net gains on securities sold, other than trading


(30,756
)


(10,947
)Net equity investments gains


(6,238
)


(44,280
)Increase in bank-owned insurance


(25,085
)


(27,978
)Net decrease (increase) in trading securities


560,117



(1,166,067
)Net decrease in accrued interest receivable


37,408



37,138Net decrease (increase) in prepaid expenses


4,699



(7,999
)Net decrease in accrued interest payable


(57,196
)


(51,797
)Net increase in other accrued expenses


41,255



12,383Origination of loans held for sale


(1,163,177
)


(345,399
)Proceeds from sale of loans held for sale


1,163,360



388,505Net gains on loans held for sale


(17,463
)


(3,458
)Net (gains) losses on sale of premises and equipment


(2,596
)


520Recoveries on charged-off loans


56,282



33,963Net change in pension and post retirement benefits


(53,933
)


(31,105
)Net decrease in foreign exchange contracts


(25,239
)


(49,142
)Net (decrease) increase in marked to market hedging derivatives


(36,216
)


18,569Visa indemnification (reversal) charge


(3,000
)


10,000Other, net


37,461



15,997Net cash provided by (used in) operating activities

$
860,051


$
(846,780
)Investing Activities:Proceeds from sales of securities
    available-for-sale

$
3,339,104


$
1,263,951Proceeds from maturities of securities
    available-for-sale


3,282,450



8,950,521Purchases of securities
    available-for-sale


(4,112,830
)


(8,860,258
)Net decrease (increase) in loans


3,006,437



(851,787
)Purchases of premises and equipment


(76,112
)


(65,496
)Sales and retirement of premises and equipment


26,516



14,058Proceeds from Visa redemption






37,800Acquisition, net of cash acquired


(3,423
)


(229,551
)Net cash provided by investing activities

$
5,462,142


$
259,238Financing Activities:Net (decrease) increase in deposits

$
(26,552,719
)

$
5,519,315Net decrease in Federal funds purchased and securities soldunder agreement to repurchase


(1,139,165
)


(807,229
)Net increase (decrease) in other short-term borrowings


225,865



(607,590
)Net decrease in short-term senior notes


(75,000
)


(5,000
)Proceeds from issuance of long-term notes 
    senior/unsecured


300,000



Proceeds from issuance of long-term notes 
    senior/secured






375,000Net proceeds from stock option exercise


800



1,329Excess tax expense from stock options exercise


(280
)


(181
)Capital contributions for acquisitions






404,016Cash dividends paid on common stock






(38,000
)Cash dividends paid on preferred stock


(13,828
)


(13,828
)Net cash (used in) provided by financing activities

$
(27,254,327
)

$
4,827,832Net (decrease) increase in cash and cash equivalents

$
(20,932,134
)

$
4,240,290Cash and cash equivalents at January 1


27,285,609



3,649,120Cash and cash equivalents at September 30

$
6,353,475


$
7,889,410   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 19




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation              2.
    Contingent
    Liabilities and Litigation    3.
    Cash
    Flows   20




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    4.
    Visa
    Indemnification Charge    Guarantees
        5.
    Fair
    Value Measurements  820-10 Transition Related to FASB Staff Position
    FAS 157-4
    Determining Fair Value When the Volume and Level of Activity for
    the Asset or Liability Have Significantly Decreased and
    Identifying Transactions That Are Not Orderly 825-10 Transition Related to FSP
    FAS 107-1
    and APB
    28-1,
    Interim Disclosures about Fair Value of Financial Instruments 320-10 Transition Related to FSP
    FAS 115-2
    and
    FAS 124-2
    Recognition and Presentation of
    Other-Than-Temporary
    Impairments other-than-temporary
 21




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  available-for-sale held-to-maturity,
  6.
    Fair
    Value Option  Financial
    Instruments
  7.
    Accounting
    for Endorsement Split-Dollar Life Insurance
    Arrangements  715-60 Defined Benefit Plans  Other Postretirement
  8.
    Auction
    Rate Securities Purchase Program    available-for-sale.
  9.
    Noncontrolling
    Interests  810-10 Transition Related to FASB Statement No. 160,
    Noncontrolling Interesets in Consolidated Financial
    Statements  an amendment of ARB No. 51
 22




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    10.
    FDIC
    Special Assessment    11.
    Accounting
    Pronouncements  Generally Accepted Accounting
    Principles
  Subsequent Events
  Transfers and
    Servicing
  Consolidations
  2009-05, Measuring Liabilities at Fair Value (ASU 2009-05) 2009-05 Fair Value Measurements and Disclosure 2009-05
 23




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  FINANCIAL
    REVIEW
  Third
    Quarter 2009 Compared with Third Quarter 2008
  Summary
    available-for-sale
           24




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##### Table of Contents



Nine
    Months Ended September 30, 2009 Compared with Nine Months
    Ended September 30, 2008
  Summary
    available-for-sale.
  Year-to-date
      Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk   25




---



##### Table of Contents



available-for-sale
  September 30, 2009Oct 1, 2009 to

Year Ending December 31,





Fair Value atDec. 31, 2009

2010

2011

2012

2013

Thereafter

Total

September 30, 2009Residential mortgage-backedAmortized cost

$



$
12,589


$
16,327


$



$
13,790


$
477,868


$
520,574


$
539,377Average Yield






4.06
%


4.00
%






4.00
%


4.53
%


4.49
%U.S. TreasuryBook Value

$
25,000


$



$



$







$



$
25,000


$
25,000Average Yield


0.0100
%






















0.0100
%   December 31, 2008Year Ending December 31,





Fair Value at2009

2010

2011

2012

2013

Thereafter

Total

December 31, 2008Residential mortgage-backedAmortized cost

$
43,936


$
41,881


$
22,902


$



$
18,237


$
350,722


$
477,678


$
488,282Average Yield


4.10
%


4.57
%


4.00
%






4.00
%


4.85
%


4.68
%   September 30, 2008Oct 1, 2008 to

Year Ending December 31,





Fair Value atDec. 31, 2008

2009

2010

2011

2012

Thereafter

Total

September 30, 2008Residential mortgage-backedAmortized cost

$



$
50,760


$
43,671


$
23,802


$



$
330,421


$
448,654


$
446,962Average Yield


0.00
%


4.10
%


4.57
%


4.00
%






4.86
%


4.69
%U.S. TreasuryBook Value

$
19,997


$



$



$







$



$
19,997


$
19,996Average Yield


6.5900
%






















6.5900
%   sub-prime
  Item 4T.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures    (b)
    Changes
    in Internal Control over Financial Reporting   26




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##### Table of Contents



Part II.
    OTHER INFORMATION
  Items 1,
    2, 3, 4 and 5 are being omitted from this Report because such
    items are not applicable to the reporting period.
  Item 1A.
    Risk
    Factors.  Form 10-K
  Dividends
    and operations of the Company are restricted by
    regulation.
         27




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##### Table of Contents



Item 6.
    Exhibits  31.1  Certification of Pamela C. Piarowski pursuant
    to rule 13a-14(a)
  31.2  Certification of Paul R. Skubic pursuant to
    rule 13a-14(a)
  32.1  Certification pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002
 28




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##### Table of Contents



SIGNATURES
     Paul
    R. Skubic
      Pamela
    C. Piarowski
    29