##### 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, 2010
  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 I

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 4.

Controls and Procedures


26PART II

OTHER INFORMATIONItem 6.

Exhibits


27Signatures


28EX-31.1EX-31.2EX-32.1




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED BALANCE SHEETS
  September 30


December 31


September 302010


2009


2009(unaudited)


(audited)


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

$
649


$
916


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


12,500



22,000



20,676Total cash and cash equivalents

$
13,149


$
22,916


$
21,712Notes receivable from Harris N.A.


3,422



3,584



3,763Securities available for sale, at fair valueMortgage-backed


512,370



515,190



539,377U.S. Treasury Bills


61,999



39,999



25,000Other assets


1,798



1,885



1,963Total assets

$
592,738


$
583,574


$
591,815Liabilities and Stockholders EquityAccrued expenses

$
41


$
111


$
1,328Deferred state tax liabilities


1,625



973



1,373Total liabilities

$
1,666


$
1,084


$
2,701Stockholders 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


1



1



1Additional paid-in capital


320,733



320,733



320,733Earnings (less than) in excess of distributions


(293
)


(601
)


950Accumulated other comprehensive income  net
    unrealized gains on
    available-for-sale
    securities, net of tax


20,631



12,357



17,430Total stockholders equity

$
591,072


$
582,490


$
589,114Total liabilities and stockholders equity

$
592,738


$
583,574


$
591,815   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


Nine Months EndedSeptember 30,


September 30,2010


2009


2010


2009(in thousands, except share date)Interest income:Securities purchased from Harris N.A. under agreement to resell

$
23


$
7


$
61


$
24Notes receivable from Harris N.A.


55



60



168



187Securities available for sale:Mortgage-backed


4,981



5,793



15,388



16,787U.S. Treasury Bills


3







7



2Total interest income

$
5,062


$
5,860


$
15,624


$
17,000Operating expenses:Loan servicing fees paid to Harris N.A.

$
3


$
3


$
8


$
9Advisory fees paid to Harris N.A.


34



40



136



136General and administrative


24



91



232



286Total operating expenses

$
61


$
134


$
376


$
431Income before income taxes

$
5,001


$
5,726


$
15,248


$
16,569Applicable state income taxes


365



418



1,113



1,210Net Income

$
4,636


$
5,308


$
14,135


$
15,359Preferred stock dividends


4,609



4,609



13,827



13,827Net income available to common stockholder

$
27


$
699


$
308


$
1,532Basic and diluted earnings per common share

$
23


$
593


$
261


$
1,346Net income

$
4,636


$
5,308


$
14,135


$
15,359Other comprehensive income:Available-for-sale
    securities:Unrealized holding gains (losses) arising during the period, net
    of deferred state taxes


(1,210
)


6,692



8,274



7,599Less reclassification adjustment for realized (gains) losses
    included in net income














Comprehensive income

$
3,426


$
12,000


$
22,409


$
22,958   The accompanying notes are an integral part of these
    financial statements.
 3




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED STATEMENTS OF CHANGES IN
    STOCKHOLDERS EQUITY
 (Unaudited)
  Nine Months EndedSeptember 302010


2009(in thousands)Balance at January 1

$
582,490


$
500,244Net income


14,135



15,359Other comprehensive income


8,274



7,599Capital contribution and issuance of common stock






80,000Dividends on common stock






(261
)Dividends on preferred stock ($0.4609 per share)


(13,827
)


(13,827
)Balance at September 30

$
591,072


$
589,114   The accompanying notes are an integral part of these
    financial statements.
 4




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED STATEMENTS OF CASH
    FLOWS
 (Unaudited)
  Nine Months Ended September 30,2010


2009(in thousands)Operating Activities:Net income

$
14,135


$
15,359Adjustments to reconcile net income to net cash provided by
    operating activities:Net decrease (increase) in other assets


87



(78
)Net (decrease) increase in accrued expenses


(70
)


1,216Net cash provided by operating activities

$
14,152


$
16,497Investing Activities:Repayments of notes receivable from Harris N.A.

$
162


$
521Purchases of securities available for sale


(288,466
)


(286,618
)Proceeds from maturities/redemptions of securities
    available-for-sale


278,212



218,721Net cash used in investing activities

$
(10,092
)

$
(67,376
)Financing Activities:Cash dividends paid on preferred stock

$
(13,827
)

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






(261
)Capital contribution and issuance of common stock






80,000Net cash (used in) provided by financing activities

$
(13,827
)

$
65,912Net (decrease) increase in cash and cash equivalents with Harris
    N.A.

$
(9,767
)

$
15,033Cash and cash equivalents with Harris N.A. at beginning of period


22,916



6,679Cash and cash equivalents with Harris N.A. at end of period

$
13,149


$
21,712   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    September 30, 2010Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


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

$
490,115


$
22,289


$
34


$
512,370U.S. Treasury Bills


61,999











61,999Total Securities

$
552,114


$
22,289


$
34


$
574,369   6




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  December 31, 2009Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


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

$
501,861


$
14,214


$
885


$
515,190U.S. Treasury Bills


40,000







1



39,999Total Securities

$
541,861


$
14,214


$
886


$
555,189   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 Bills


25,000











25,000Total Securities

$
545,574


$
18,803


$



$
564,377   Available-for-sale available-for-sale
  other-than-temporary
   7




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  other-than-temporarily
  September 30, 2010Length 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

$
18,155


$
34


$



$



$
18,155


$
34U.S. Treasury Bills






















Total Securities

$
18,155


$
34


$



$



$
18,155


$
34   December 31, 2009Length of Continuous Unrealized Loss PositionLess than 12 months


12 months or longer


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(in thousands)Residential mortgage-backed

$
104,988


$
885


$



$



$
104,988


$
885U.S. Treasury Bills


39,999



1











39,999



1Total Securities

$
144,987


$
886


$



$



$
144,987


$
886   available-for-sale
  September 30, 2010Amortized


FairCost


Value(in thousands)Maturities:Within 1 year

$
72,780


$
72,8791 to 5 years


15,429



15,9655 to 10 years


131,545



139,870Over 10 years


332,360



345,655Total

$
552,114


$
574,369   4.
    Fair
    Value Measurements   8




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    Fair Value


Fair Value Measurements UsingSeptember 30, 2010


Level 1


Level 2


Level 3(in thousands)Available-for-sale
    securitiesResidential mortgage-backed

$
512,370


$



$
512,370


$
U.S. Treasury


61,999



61,999







Total Securities

$
574,369


$
61,999


$
512,370


$
   Fair Value


Fair Value Measurements UsingDecember 31, 2009


Level 1


Level 2


Level 3(in thousands)Available-for-sale
    securitiesResidential mortgage-backed

$
515,190


$



$
515,190


$
U.S. Treasury


39,999



39,999







Total Securities

$
555,189


$
39,999


$
515,190


$
   Fair Value


Fair Value Measurements UsingSeptember 30, 2009


Level 1


Level 2


Level 3(in thousands)Available-for-sale
    securitiesResidential mortgage-backed

$
539,377


$



$
539,377


$
U.S. Treasury


25,000



25,000







Total Securities

$
564,377


$
25,000


$
539,377


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




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    September 30, 2010Carrying


FairValue


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

$
649


$
649Securities purchased from Harris N.A. under agreement to
    resell


12,500



12,500Notes receivable from Harris N.A.


3,422



5,426Securities available for sale


574,369



574,369Accrued interest receivable


1,798



1,798Total on-balance-sheet financial assets

$
592,738


$
594,742   6.
    Operating
    Segment    Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Information
  Form 10-Q Form 10-K Form S-11 No. 333-40257),
  Results
    of Operations
  Third
    Quarter 2010 Compared with Third Quarter 2009
     10




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
            Nine
    Months Ended September 30, 2010 compared with
    September 30, 2009
     11




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##### Table of Contents



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




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  Market
    Risk Management
    Tax
    Matters
    Financial
    Statements of Harris N.A.
   13




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##### Table of Contents



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


December 31


September 302010


2009


2009(unaudited)


(audited)


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

$
713,938


$
904,865


$
873,618Money market assets:Interest-bearing deposits at banks ($10.4 billion,
    $8.4 billion, and $4.6 billion held at Federal Reserve
    Bank at September 30, 2010, December 31, 2009, and
    September 30, 2009 respectively)


11,064,211



9,231,581



5,406,077Federal funds sold and securities purchased under agreement to
    resell


150,849



174,979



73,780Total cash and cash equivalents

$
11,928,998


$
10,311,425


$
6,353,475Securities
    available-for-sale
    at fair value


5,780,145



5,898,831



6,590,159Trading account assets and derivative instruments


1,298,628



1,353,509



745,975Loans, net of unearned income


22,795,384



23,175,717



23,030,674Allowance for loan losses


(674,004
)


(680,782
)


(693,124
)Net loans

$
22,121,380


$
22,494,935


$
22,337,550Loans held for sale


8,799



29,974



47,275Premises and equipment


533,339



526,623



526,488Bank-owned insurance


1,364,969



1,339,657



1,329,400Goodwill and other intangible assets


901,536



817,507



760,836Other assets


1,784,510



1,199,166



1,170,040Total assets

$
45,722,304


$
43,971,627


$
39,861,198LIABILITIESDeposits in domestic offices  noninterest-bearing

$
9,175,434


$
9,704,773


$
6,670,922 interest-bearing (includes $1.2 billion, $707.4 million and $554.8 million measured at fair value at September 30, 2010, December 31, 2009 and September 30, 2009, respectively)


21,690,912



18,968,058



18,794,752Deposits in foreign offices     
    interest-bearing


1,475,984



1,622,410



1,335,451Total deposits

$
32,342,330


$
30,295,241


$
26,801,125Federal funds purchased


119,574



236,099



246,363Securities sold under agreement to repurchase


1,206,380



2,512,490



2,194,755Short-term borrowings


762,530



717,050



585,341Accrued interest, taxes and other expenses


194,974



172,618



188,452Accrued pension and post-retirement


19,124



58,393



106,971Other liabilities


832,901



643,289



581,463Long-term notes  senior/unsecured


2,396,500



2,396,500



2,396,500Long-term notes  senior/secured


2,375,000



2,375,000



2,375,000Long-term notes  subordinated


200,000



292,750



292,750Total liabilities

$
40,449,313


$
39,699,430


$
35,768,720STOCKHOLDERS EQUITYCommon stock ($10 par value); authorized
    40,000,000 shares; issued and outstanding
    19,989,512 shares at September 30, 2010,
    17,534,512 shares at December 31, 2009, and
    17,149,512 shares at September 30, 2009

$
199,895


$
175,345


$
171,495Surplus


3,291,876



2,322,917



2,174,661Retained earnings


1,642,284



1,621,719



1,640,337Accumulated other comprehensive loss


(111,119
)


(97,784
)


(144,015
)Stockholders equity before noncontrolling
    interest  preferred stock of subsidiary

$
5,022,936


$
4,022,197


$
3,842,478Noncontrolling interest  preferred stock of subsidiary


250,055



250,000



250,000Total stockholders equity

$
5,272,991


$
4,272,197


$
4,092,478Total liabilities and stockholders equity

$
45,722,304


$
43,971,627


$
39,861,198   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 14




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##### Table of Contents



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


Nine Months EndedSeptember 30,


September 30,2010


2009


2010


2009(in thousands)Interest IncomeLoans

$
261,444


$
282,715


$
793,690


$
882,658Money market assets:Deposits at banks


8,157



4,332



20,569



14,411Federal funds sold and securities purchased under agreements to
    resell


47



22



131



167Trading account assets


2,248



1,786



7,995



6,882Securities
    available-for-sale:U.S. Treasury and federal agency


10,757



22,168



38,942



82,489State and municipal


12,306



13,435



36,794



40,840Other


2,753



2,204



8,620



11,921Total interest income

$
297,712


$
326,662


$
906,741


$
1,039,368Interest ExpenseDeposits

$
46,240


$
61,733


$
134,899


$
256,522Short-term borrowings


1,432



2,057



5,095



6,367Short-term senior notes






407







1,726Long-term notes  senior/unsecured


23,365



24,386



68,626



65,240Long-term notes  senior/secured


6,920



13,448



27,532



34,025Long-term notes  subordinated


419



728



1,250



3,459Total interest expense

$
78,376


$
102,759


$
237,402


$
367,339Net Interest Income

$
219,336


$
223,903


$
669,339


$
672,029Provision for loan losses


35,828



181,652



219,574



421,888Net Interest Income after Provision for Loan Losses

$
183,508


$
42,251


$
449,765


$
250,141Noninterest IncomeTrust and investment management fees

$
22,713


$
19,247


$
66,708


$
57,886Net money market and bond trading income, including derivative
    activity


2,898



6,522



28,038



15,731Foreign exchange trading (losses) gains, net


(685
)


2,912



3,531



8,312Service charges and fees


48,047



52,365



148,288



151,827Charge card income


27,251



45



85,999



378Equity securities gains, net


1,994



2,301



6,082



6,238Net securities gains, other than trading


2,910



737



5,225



30,756Other-than-temporary
    impairment of securities


(4,636
)


(60
)


(4,767
)


(1,093
)Bank-owned insurance


11,042



11,139



34,179



33,665Letter of credit fees


4,901



4,998



16,494



15,359Net gains on loans held for sale


4,188



6,331



11,855



17,463Other


14,209



11,742



34,406



30,646Total noninterest income

$
134,832


$
118,279


$
436,038


$
367,168Noninterest ExpensesSalaries and other compensation

$
113,720


$
104,844


$
319,481


$
302,961Pension, profit sharing and other employee benefits


22,808



23,451



77,213



77,758Net occupancy


27,893



24,922



76,913



75,940Equipment


18,848



16,622



57,380



51,203Marketing


22,549



13,283



49,192



31,900Communication and delivery


9,573



7,520



25,075



22,416Professional fees


32,023



19,388



80,821



68,766Outside information processing, database and network fees


10,518



9,098



26,374



26,779FDIC Insurance


11,030



8,983



34,401



52,687Intercompany services, net


(2,150
)


2,368



(7,412
)


1,986Visa indemnification reversal






(3,000
)


(2,800
)


(3,000
)Charge card expense


6,270







20,572



Amortization of intangibles


6,935



5,746



19,177



19,933Other


40,318



19,768



98,912



60,800Total noninterest expenses

$
320,335


$
252,993


$
875,299


$
790,129(Loss) Income before income tax benefit

$
(1,995
)

$
(92,463
)

$
10,504


$
(172,820
)Applicable income tax benefit


(11,071
)


(43,829
)


(23,888
)


(92,513
)Net income (loss)

$
9,076


$
(48,634
)

$
34,392


$
(80,307
)Less: noncontrolling interest  dividends on preferred
    stock of subsidiary


4,609



4,609



13,827



13,827Net Income (Loss) Available for Common Stockholder

$
4,467


$
(53,243
)

$
20,565


$
(94,134
)   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 COMPREHENSIVE INCOME (LOSS)
 (Unaudited)
  Quarter Ended September 30,


Nine Months Ended September 30,2010


2009


2010


2009(in thousands)Net income (loss)

$
9,076


$
(48,634
)

$
34,392


$
(80,307
)Other comprehensive income (loss):Cash flow hedges:Net unrealized (loss) gain on derivative instruments, net of tax
    benefit for the quarter of $3,199 in 2010 and $17,651 in 2009
    and net of tax (benefit) expense for the
    year-to-date
    period of ($20,378) in 2010 and $12,266 in 2009


(5,942
)


(32,780
)


(37,847
)


22,781Reclassification adjustment for realized loss included in net
    income (loss), net of tax benefit for the quarter of $637 in
    2010 and $853 in 2009 and net of tax benefit for the
    year-to-date
    period of $1,575 in 2010 and $2,935 in 2009


1,183



1,585



2,926



5,450Pension and postretirement medical benefit plans:Net (loss) gain and net prior service cost included in net
    income (loss), net of tax benefit for the quarter of $0 in 2010
    and 2009 and net of tax expense for the
    year-to-date
    period of $1,318 in 2010 and $3,531 in 2009


(406
)






4,168



6,556Reclassification adjustment for amortization included in net
    income (loss), net of tax benefit for the quarter of $663 in
    2010 and $366 in 2009 and net of tax benefit for the
    year-to-date
    period of $1,989 in 2010 and $1,100 in 2009


1,232



681



3,694



2,042Available-for-sale
    securities:Unrealized holding gain arising during the period, net of tax
    expense for the quarter of $7,538 in 2010 and $9,247 in 2009 and
    net of tax expense for the
    year-to-date
    period of $5,383 in 2010 and $16,194 in 2009


12,946



32,266



17,120



45,187Reclassification adjustment for realized gain included in net
    income (loss), net of tax expense for the quarter of $1,018 in
    2010 and $258 in 2009 and net of tax expense for the
    year-to-date
    period of $1,829 in 2010 and $10,765 in 2009


(1,891
)


(480
)


(3,396
)


(19,992
)Other comprehensive income (loss)

$
7,122


$
1,272


$
(13,335
)

$
62,024Comprehensive income (loss)

$
16,198


$
(47,362
)

$
21,057


$
(18,283
)Comprehensive income related to noncontrolling interest


4,609



4,609



13,827



13,827Comprehensive income (loss) available for common
    stockholder

$
11,589


$
(51,971
)

$
7,230


$
(32,110
)   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 CHANGES IN STOCKHOLDERS
    EQUITY(Unaudited)
  Accumulated


NoncontrollingOther


Interest 


TotalCommon





Retained


Comprehensive


Preferred Stock


StockholdersStock


Surplus


Earnings


Loss


of Subsidiary


Equity(in thousands)Balance at December 31, 2009

$
175,345


$
2,322,917


$
1,621,719


$
(97,784
)

$
250,000


$
4,272,197Stock option exercise






509















509Net income










20,565







13,827



34,392Dividends  preferred stock of subsidiary


















(13,827
)


(13,827
)Change in noncontrolling interest ownership


















55



55Other comprehensive loss














(13,335
)






(13,335
)Issuance of common stock and contribution to capital surplus


24,550



968,450















993,000Balance at September 30, 2010

$
199,895


$
3,291,876


$
1,642,284


$
(111,119
)

$
250,055


$
5,272,991Balance at December 31, 2008

$
171,495


$
2,172,030


$
1,734,471


$
(206,039
)

$
250,000


$
4,121,957Stock option exercise






800















800Tax benefit from stock option exercise






1,831















1,831Net income










(94,134
)






13,827



(80,307
)Dividends  preferred stock of subsidiary


















(13,827
)


(13,827
)Other comprehensive income














62,024







62,024Balance at September 30, 2009

$
171,495


$
2,174,661


$
1,640,337


$
(144,015
)

$
250,000


$
4,092,478   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 CASH FLOWS
 (Unaudited)
  Nine Months Ended September 302010


2009(in thousands)Cash Flows from Operating Activities:Net income (loss)

$
34,392


$
(80,307
)Less: noncontrolling interest  dividends on preferred
    stock of subsidiary


13,827



13,827Net income (loss) available for common stockholder

$
20,565


$
(94,134
)Adjustments to determine net cash flows provided by operating
    activities:Provision for loan losses


219,574



421,888Depreciation and amortization, including intangibles


81,348



80,747Deferred tax expense (benefit)


57,237



(31,057
)Excess tax expense from stock options exercise


178



1,831Other-than-temporary
    impairment on securities


4,767



1,093Net gains on securities, other than trading


(5,225
)


(30,756
)Net equity investment gains


(6,082
)


(6,238
)Increase in bank-owned insurance


(25,312
)


(25,085
)Net decrease in trading securities


113,958



560,117Decrease in accrued interest receivable


10,190



37,408(Increase) decrease in prepaid expenses


(86,179
)


4,699Decrease in accrued interest payable


(3,786
)


(57,196
)Net increase in accrued tax payable


(79,668
)


(29,126
)Net (decrease) increase in other accrued expenses


(33,806
)


41,255Net increase in pension and post retirement benefits


(28,100
)


(53,933
)Origination of loans held for sale


(526,378
)


(1,163,177
)Proceeds from sale of loans held for sale


559,408



1,163,360Net gains on loans held for sale


(11,855
)


(17,463
)Net gains on sale of premises and equipment


(788
)


(2,596
)Net increase (decrease) in foreign exchange contracts


19,080



(25,239
)Recoveries on charged-off loans


53,777



56,282Net increase (decrease) in trading hedging derivatives


36,555



(36,216
)Visa indemnification reversal


(2,800
)


(3,000
)Other, net


116,364



66,586Net cash provided by operating activities

$
483,022


$
860,050Cash Flows from Investing Activities:Proceeds from sales of securities
    available-for-sale

$
514,900


$
3,339,104Proceeds from maturities of securities
    available-for-sale


3,027,567



3,282,450Purchases of securities
    available-for-sale


(3,414,559
)


(4,112,830
)Net decrease in loans


1,353,972



3,006,437Proceeds from loans sold to affiliates


273,522



Purchases of premises and equipment


(69,501
)


(76,112
)Sales of premises and equipment


10,250



26,516Acquisitions, net of cash received


191,663



(3,423
)Net cash provided by investing activities

$
1,887,814


$
5,462,142Cash flows from Financing Activities:Net decrease in deposits

$
(576,032
)

$
(27,029,801
)Net increase in deposits measured at fair value


450,579



477,082Net decrease in Federal funds purchased and securities sold
    under agreement to repurchase


(1,422,635
)


(1,139,165
)Net increase in other short-term borrowings


45,480



225,865Net decrease in short-term senior notes






(75,000
)Repayment of long-term notes  senior/secured


(137,409
)


Proceeds from issuance long-term notes 
    senior/unsecured






300,000Repayment of long-term notes  subordinated


(92,750
)


Net proceeds from stock options exercise


509



800Excess tax expense from stock options exercise


(178
)


(280
)Capital contributions


993,000



Cash dividends paid on preferred stock


(13,827
)


(13,827
)Net cash used in financing activities

$
(753,263
)

$
(27,254,326
)Net increase (decrease) in cash and cash equivalents

$
1,617,573


$
(20,932,134
)Cash and cash equivalents at January 1


10,311,425



27,285,609Cash and cash equivalents at September 30

$
11,928,998


$
6,353,475   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
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation      travel-and-entertainment
  high-net-worth
   19




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    2.
    Contingent
    Liabilities and Litigation    3.
    Cash
    Flows    4.
    Visa
    Indemnification Charge         20




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  5.
    Auction
    Rate Securities Purchase Program      other-than-temporary available-for-sale.
  6.
    Health
    Care Legislation    7.
    Noncontrolling
    Interests  810-10-65)
 21




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  8.
    FDIC
    Special Assessment      9.
    Other-than-temporary
    impairment  other-than-temporary other-than-temporary other-than-temporary
  10.
    Recent
    accounting standards      2010-20, Disclosures about the Credit Quality of Financing Receivables
    and the Allowance for Credit Losses ASC 310-10-50, Receivables  Overall  Disclosure
 22




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  FINANCIAL
    REVIEW
  Third
    Quarter 2010 Compared with Third Quarter 2009
  Summary
    available-for-sale available-for-sale
         23




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##### Table of Contents



Nine
    Months Ended September 30, 2010 Compared with Nine Months
    Ended September 30, 2009
  Summary
    available-for-sale available-for-sale
  Year-to-date
     24




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##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    available-for-sale
  October 1, 2010 to

Year Ending December 31,





Fair Value atDec. 31, 2010

2011

2012

2013

2014

Thereafter

Total

September 30, 2010Residential mortgage-backedAmortized cost

$
1,202


$
9,578


$



$
8,685


$
4,850


$
465,800


$
490,115


$
512,370Average Yield


4.00%



4.00%







4.00%



4.00%



4.35%



4.33%U.S. Treasury BillsAmortized cost

$
61,999


$



$



$



$



$



$
61,999


$
61,999Average Yield


0.070%























0.070%   sub-prime
 25




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##### Table of Contents



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,
    1A, 2, 3 and 5 are being omitted from this Report because such
    items are not applicable to the reporting period.



None 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
 27




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##### Table of Contents



SIGNATURES     Paul
    R. Skubic
      Pamela
    C. Piarowski
    28