<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       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 MARCH 31, 2003

                         COMMISSION FILE NUMBER 1-13805


                      HARRIS PREFERRED CAPITAL CORPORATION
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                   MARYLAND                                     # 36-4183096
         (State or other jurisdiction               (I.R.S. Employer Identification No.)
      of incorporation or organization)
  111 WEST MONROE STREET, CHICAGO, ILLINOIS                        60603
   (Address of principal executive offices)                      (Zip Code)
</Table>

              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                 (312) 461-2121

                            ------------------------

     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 [ ]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Act).
  Yes [ ]     No [X]

     The number of shares of Common Stock, $1.00 par value, outstanding on May
14, 2003 was 1,000.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                      HARRIS PREFERRED CAPITAL CORPORATION

                               TABLE OF CONTENTS

<Table>
<S>          <C>                                                             <C>
Part I       FINANCIAL INFORMATION

Item 1.      Financial Statements:
             Balance Sheets..............................................      2
             Statements of Operations and Comprehensive Income...........      3
             Statements of Changes in Stockholders' Equity...............      4
             Statements of Cash Flows....................................      5
             Notes to Financial Statements...............................      6

Item 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations...............      6

Item 4.      Controls and Procedures.....................................      9

             The above financial statements, financial review and
             controls and procedures discussion, included in the
             Corporation's 2003 First Quarter Report, are filed as
             Exhibit A and incorporated herein by reference.

Part II      OTHER INFORMATION

Item 6.      Exhibits and Reports on Form 8-K............................     17
             (a) Exhibits
                  99.1 Certification pursuant to 18 U.S.C. Section 1350,
                  As adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002

             (b) Reports on Form 8-K
                  None

Signatures...............................................................     17

             Certification's pursuant to Section 302 of the
             Sarbanes-Oxley Act of 2002..................................     18
</Table>
<PAGE>

                      HARRIS PREFERRED CAPITAL CORPORATION

                                 BALANCE SHEETS
                                  (UNAUDITED)

<Table>
<Caption>
                                                                MARCH 31,    DECEMBER 31,    MARCH 31,
                                                                  2003           2002          2002
                                                                ---------    ------------    ---------
                                                                  (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                             <C>          <C>             <C>
ASSETS
Cash on deposit with Harris Trust and Savings Bank..........    $    246       $    728      $    217
Securities purchased from Harris Trust and Savings Bank
  under agreement to resell.................................      22,000         20,000        14,000
Notes receivable from Harris Trust and Savings Bank.........      27,230         31,078        48,372
Securities available-for-sale:
  Mortgage-backed...........................................     325,834        365,383       301,978
  U.S. Treasury.............................................     149,991         79,976       119,940
Securing mortgage collections due from Harris Trust and
  Savings Bank..............................................         991          2,930         1,695
Other assets................................................       1,587          1,947         1,827
                                                                --------       --------      --------
       TOTAL ASSETS.........................................    $527,879       $502,042      $488,029
                                                                ========       ========      ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Broker payable -- unsettled security purchase...............    $ 25,066       $     --      $     --
Accrued expenses............................................          83             96            95
                                                                --------       --------      --------
       TOTAL LIABILITIES....................................      25,149             96            95
                                                                ========       ========      ========
Commitments and contingencies...............................          --             --            --
STOCKHOLDERS' EQUITY
7 3/8% 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       250,000
Common stock ($1 par value); 1,000 shares authorized, issued
  and outstanding...........................................           1              1             1
Additional paid-in capital..................................     240,733        240,733       240,733
Earnings in excess of distributions.........................       3,867            850         1,595
Accumulated other comprehensive income (loss) -- unrealized
  gains/(losses) on available-for-sale securities...........       8,129         10,362        (4,395)
                                                                --------       --------      --------
       TOTAL STOCKHOLDERS' EQUITY...........................     502,730        501,946       487,934
                                                                --------       --------      --------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...........    $527,879       $502,042      $488,029
                                                                ========       ========      ========
</Table>

The accompanying notes are an integral part of these financial statements.

                                        2
<PAGE>

                      HARRIS PREFERRED CAPITAL CORPORATION

                              STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                                  (UNAUDITED)

<Table>
<Caption>
                                                                        QUARTER ENDED
                                                                          MARCH 31
                                                                  -------------------------
                                                                    2003            2002
                                                                    ----            ----
                                                                       (IN THOUSANDS,
                                                                   EXCEPT PER SHARE DATA)
<S>                                                               <C>             <C>
INTEREST INCOME:
  Securities purchased from Harris Trust and Savings Bank
     under agreement to resell..............................      $     247       $     320
  Notes receivable from Harris Trust and Savings Bank.......            472             845
  Securities available-for-sale:
     Mortgage-backed........................................          4,526           4,683
     U.S. Treasury..........................................             48              97
                                                                  ---------       ---------
       Total interest income................................          5,293           5,945
NON-INTEREST INCOME:
  Gain on sale of securities................................          2,463              --
                                                                  ---------       ---------
OPERATING EXPENSES:
  Loan servicing fees paid to Harris Trust and Savings
     Bank...................................................             22              41
  Advisory fees paid to Harris Trust and Savings Bank.......             10               8
  General and administrative................................             98              77
                                                                  ---------       ---------
       Total operating expenses.............................            130             126
                                                                  ---------       ---------
Net income..................................................          7,626           5,819
Preferred dividends.........................................          4,609           4,609
                                                                  ---------       ---------
NET INCOME AVAILABLE TO COMMON STOCKHOLDER..................      $   3,017       $   1,210
                                                                  =========       =========
Basic and diluted earnings per common share.................      $3,017.00       $1,210.00
                                                                  =========       =========
Net income..................................................      $   7,626       $   5,819
Other comprehensive loss -- unrealized losses on
  available-for-sale securities.............................         (2,233)         (2,518)
                                                                  ---------       ---------
Comprehensive income........................................      $   5,393       $   3,301
                                                                  =========       =========
</Table>

The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>

                      HARRIS PREFERRED CAPITAL CORPORATION

                 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                  (UNAUDITED)

<Table>
<Caption>
                                                                     QUARTER ENDED
                                                                       MARCH 31
                                                                -----------------------
                                                                  2003           2002
                                                                  ----           ----
                                                                    (IN THOUSANDS,
                                                                EXCEPT PER SHARE DATA)
<S>                                                             <C>            <C>
BALANCE AT JANUARY 1........................................    $501,946       $489,242
  Net income................................................       7,626          5,819
  Other comprehensive loss..................................      (2,233)        (2,518)
  Dividends (preferred stock $0.4609 per share).............      (4,609)        (4,609)
                                                                --------       --------
BALANCE AT MARCH 31.........................................    $502,730       $487,934
                                                                ========       ========
</Table>

The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>

                      HARRIS PREFERRED CAPITAL CORPORATION
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<Table>
<Caption>
                                                                QUARTER ENDED MARCH 31
                                                                ----------------------
                                                                  2003         2002
                                                                  ----         ----
                                                                    (IN THOUSANDS)
<S>                                                             <C>          <C>
OPERATING ACTIVITIES:
  Net Income................................................    $   7,626    $   5,819
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Gain on sale of securities.............................       (2,463)          --
     Net decrease in other assets...........................          360          118
     Net decrease in accrued expenses.......................          (13)          (5)
                                                                ---------    ---------
       Net cash provided by operating activities............        5,510        5,932
                                                                ---------    ---------
INVESTING ACTIVITIES:
  Net (decrease) increase in securities purchased from
     Harris Trust and Savings Bank under agreement to
     resell.................................................       (2,000)       7,000
  Repayments of notes receivable from Harris Trust and
     Savings Bank...........................................        3,848        7,590
  Decrease in securing mortgage collections due from Harris
     Trust and Savings Bank.................................        1,939        3,658
  Purchases of securities available-for-sale................     (149,929)    (119,909)
  Proceeds from maturities and sales of securities
     available-for-sale.....................................      144,759      100,049
                                                                ---------    ---------
       Net cash used in investing activities................       (1,383)      (1,612)
                                                                ---------    ---------
FINANCING ACTIVITIES:
  Cash dividends paid on preferred stock....................       (4,609)      (4,609)
                                                                ---------    ---------
  Net decrease in cash on deposit with Harris Trust and
     Savings Bank...........................................         (482)        (289)
  Cash on deposit with Harris Trust and Savings Bank at
     beginning of period....................................          728          506
                                                                ---------    ---------
  Cash on deposit with Harris Trust and Savings Bank at end
     of period..............................................    $     246    $     217
                                                                =========    =========

NON-CASH TRANSACTION:
  Unsettled security purchase...............................    $  25,066    $      --
                                                                =========    =========
</Table>

The accompanying notes are an integral part of these financial statements.

                                        5
<PAGE>

                      HARRIS PREFERRED CAPITAL CORPORATION
                         NOTES TO FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

     Harris Preferred Capital Corporation (the "Company") is a Maryland
corporation whose principal business objective is to acquire, hold, finance and
manage qualifying real estate investment trust ("REIT") assets (the "Mortgage
Assets"), consisting of a limited recourse note or notes (the "Notes") issued by
Harris Trust and Savings Bank (the "Bank") secured by real estate mortgage
assets (the "Securing Mortgage Loans") and other obligations secured by real
property, as well as certain other qualifying REIT assets. The Company holds its
assets through a Maryland real estate investment trust subsidiary, Harris
Preferred Capital Trust. Harris Capital Holdings, Inc., a wholly-owned
subsidiary of the Bank, owns 100% of the Company's common stock.

     The accompanying financial statements have been prepared by management from
the books and records of the Company, without audit by independent certified
public accountants. These statements reflect all adjustments and disclosures
which are, in the opinion of management, necessary for a fair statement of the
results for the interim periods presented and should be read in conjunction with
the notes to financial statements included in the Company's 2002 Form 10-K.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission.

2. COMMITMENTS AND CONTINGENCIES

     Legal proceedings in which the Company is a defendant may arise in the
normal course of business. There is no pending litigation against the Company.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING INFORMATION

     The statements contained in this Report on Form 10-Q that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements regarding the Company's expectation, intentions,
beliefs or strategies regarding the future. Forward-looking statements include
the Company's statements regarding tax treatment as a real estate investment
trust, liquidity, provision for loan losses, capital resources and investment
activities. In addition, in those and other portions of this document, the words
"anticipate," "believe," "estimate," "expect," "intend" and other similar
expressions, as they relate to the Company or the Company's management, are
intended to identify forward-looking statements. Such statements reflect the
current views of the Company with respect to future events and are subject to
certain risks, uncertainties and assumptions. It is important to note that the
Company's actual results could differ materially from those described herein as
anticipated, believed, estimated or expected. Among the factors that could cause
the results to differ materially are the risks discussed in the "Risk Factors"
section included in the Company's Registration Statement on Form S-11 (File No.
333-40257), with respect to the Preferred Shares declared effective by the
Securities and Exchange Commission on February 5, 1998. The Company assumes no
obligation to update any such forward-looking statement.

RESULTS OF OPERATIONS

FIRST QUARTER 2003 COMPARED WITH FIRST QUARTER 2002

     The Company's net income for the first quarter of 2003 was $7.6 million.
This represented a $1.8 million or 31% increase from first quarter 2002 earnings
of $5.8 million. Earnings increased primarily because of a $2.5 million gain on
sale of securities in 2003 compared to no gains in 2002, partially offset by a
decline in interest income on investments.
                                        6
<PAGE>
                      HARRIS PREFERRED CAPITAL CORPORATION
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     First quarter 2003 interest income on the Notes totaled $472 thousand and
yielded 6.4% on $29.7 million of average principal outstanding for the quarter
compared to $845 thousand and a 6.4% yield on $52.9 million average principal
outstanding for first quarter 2002. The decrease in income was attributable to a
reduction in the Notes balance because of principal paydowns by customers in the
underlying Securing Mortgage Loans. The average outstanding balance of the
Securing Mortgage Loans for first quarter 2003 and 2002 was $36 million and $65
million, respectively. Interest income on securities available-for-sale for the
current quarter was $4.6 million resulting in a yield of 5.0% on an average
balance of $368 million, compared to $4.8 million with a yield of 5.7% on an
average balance of $335 million for the same period a year ago. The decrease in
interest income is primarily attributable to the reduction in yield. As
securities mature or are sold, proceeds have been invested in lower yielding
securities because market interest rates have generally been declining.

     There were no Company borrowings during first quarter 2003 or 2002.

     First quarter 2003 operating expenses totaled $130 thousand, an increase of
$4 thousand or 3% from the first quarter of 2002. Loan servicing expenses
totaled $22 thousand, a decrease of $19 thousand or 46% from a year ago. This
decrease is attributable to the reduction in the principal balance of the Notes,
thereby reducing servicing fees payable to the Bank. Advisory fees for the first
quarter 2003 were $10 thousand compared to $8 thousand a year earlier. General
and administrative expenses totaled $98 thousand, an increase of $21 thousand or
27% over the same period in 2002, as a result of additional corporate governance
costs.

     At March 31, 2003 and 2002, there were no Securing Mortgage Loans on
nonaccrual status.

     The Company does not currently maintain an allowance for loan losses due to
the over-collateralization of the Notes represented by the Securing Mortgage
Loans.

LIQUIDITY RISK MANAGEMENT

     The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments. In
managing liquidity, the Company takes into account various legal limitations
placed on a REIT.

     The Company's principal asset management requirements are to maintain the
current earning asset portfolio size through the acquisition of additional Notes
or other qualifying assets in order to pay dividends to its stockholders after
satisfying obligations to creditors. The acquisition of additional Notes or
other qualifying assets is funded with the proceeds obtained as a result of
repayment of principal balances of individual Securing Mortgage Loans or
maturities or sales of securities. The payment of dividends on the Preferred
Shares is made from legally available funds, arising from operating activities
of the Company. The Company's cash flows from operating activities principally
consist of the collection of interest on the Notes, mortgage-backed securities
and other earning assets. The Company does not have and does not anticipate
having any material capital expenditures.

     In order to remain qualified as a REIT, the Company must distribute
annually at least 90% of its adjusted REIT ordinary taxable income, as provided
for under the Internal Revenue Code, to its common and preferred stockholders.
The Company currently expects to distribute dividends annually equal to 90% or
more of its adjusted REIT ordinary taxable income.

     The Company anticipates that cash and cash equivalents on hand and the cash
flow from the Notes and mortgage-backed securities will provide adequate
liquidity for its operating, investing and financing needs.

     As presented in the accompanying Statements of Cash Flows, the primary
sources of funds in addition to $5.5 million provided from operations during the
three months ended March 31, 2003 were $3.8 million provided by principal
repayments on the Notes and $144.8 million from the maturities and sales of
securities available-for-sale. In the prior period ended March 31, 2002, the
primary sources of funds other than
                                        7
<PAGE>
                      HARRIS PREFERRED CAPITAL CORPORATION
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

$5.9 million from operations were $7.6 million provided by principal repayments
on the Notes and $100.0 million from the maturities and sales of securities
available-for-sale. The primary uses of funds for the three months ended March
31, 2003 were $149.9 million for purchases of securities available-for-sale and
$4.6 million in preferred stock dividends paid. For the prior year's quarter
ended March 31, 2002, the primary uses of funds were $119.9 million for
purchases of securities available-for-sale and $4.6 million in preferred stock
dividends paid.

MARKET RISK MANAGEMENT

     The Company's market risk is composed primarily of interest rate risk.
There have been no material changes in market risk or the manner in which the
Company manages market risk since December 31, 2002.

OTHER MATTERS

     As of March 31, 2003, the Company believes that it is in full compliance
with the REIT tax rules, and expects to qualify as a REIT under the provisions
of the Code. The Company expects to meet all REIT requirements regarding the
ownership of its stock and anticipates meeting the annual distribution
requirements.

FINANCIAL STATEMENTS OF HARRIS TRUST AND SAVINGS BANK

     The following unaudited financial information for the Bank is included
because the Company's preferred shares are automatically exchangeable for a new
series of preferred stock of the Bank upon the occurrence of certain events.

                                        8
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
                                  (UNAUDITED)

<Table>
<Caption>
                                                                      MARCH 31      DECEMBER 31     MARCH 31
                                                                        2003           2002           2002
                                                                      --------      -----------     --------
                                                                         (IN THOUSANDS EXCEPT SHARE DATA)
<S>                                                                  <C>            <C>            <C>
ASSETS
Cash and demand balances due from banks..........................    $ 1,244,415    $ 1,057,254    $   747,152
Money market assets:
  Interest-bearing deposits at banks.............................        321,090        417,206        201,989
  Federal funds sold and securities purchased under agreement to
     resell......................................................        467,875        237,950        969,150
Securities available-for-sale (including $4.39 billion, $4.39
  billion and $2.61 billion of securities pledged as collateral
  for repurchase at March 31, 2003, December 31, 2002 and March
  31, 2002, respectively)........................................      6,183,136      5,781,360      5,126,575
Trading account assets...........................................         34,541         42,423         19,461
Loans............................................................      9,767,905      9,607,887      9,783,769
Allowance for possible loan losses...............................       (208,281)      (206,999)      (219,682)
                                                                     -----------    -----------    -----------
  Net loans......................................................      9,559,624      9,400,888      9,564,087
Premises and equipment...........................................        298,711        298,414        288,992
Customers' liability on acceptances..............................         23,125         16,168         22,500
Bank-owned insurance.............................................      1,005,261        994,185        963,288
Loans held for sale..............................................        197,653        149,311        145,311
Goodwill and other valuation intangibles.........................        184,372        187,317        204,601
Other assets.....................................................        523,914        444,542        386,581
                                                                     -----------    -----------    -----------
       TOTAL ASSETS..............................................    $20,043,717    $19,027,018    $18,639,687
                                                                     ===========    ===========    ===========
LIABILITIES
Deposits in domestic offices -- noninterest bearing..............    $ 2,053,114    $ 2,085,400    $ 2,210,963
                             -- interest-bearing.................      8,519,578      7,736,930      7,834,926
Deposits in foreign offices  -- noninterest bearing..............         39,021         31,383         32,719
                             -- interest-bearing.................        906,958      1,184,571        948,075
                                                                     -----------    -----------    -----------
       Total deposits............................................     11,518,671     11,038,284     11,026,683
Federal funds purchased and securities sold under agreement to
  repurchase.....................................................      5,250,145      5,060,784      3,792,338
Short-term borrowings............................................        200,649        300,694        513,805
Short-term notes -- senior.......................................        350,000        200,000        860,000
Acceptances outstanding..........................................         23,125         16,168         22,500
Accrued interest, taxes and other expenses.......................        141,359        153,148        143,172
Other liabilities................................................        495,790        200,286        217,797
Minority interest -- preferred stock of subsidiary...............        250,000        250,000        250,000
Preferred stock issued to Harris Bankcorp, Inc. .................          5,000          5,000          5,000
Long-term notes -- subordinated..................................        225,000        225,000        225,000
                                                                     -----------    -----------    -----------
       TOTAL LIABILITIES.........................................     18,459,739     17,449,364     17,056,295
                                                                     -----------    -----------    -----------
STOCKHOLDER'S EQUITY
Common stock ($10 par value); 10,000,000 shares authorized,
  issued and outstanding.........................................        100,000        100,000        100,000
Surplus..........................................................        629,381        626,640        622,293
Retained earnings................................................        816,552        803,249        863,347
Accumulated other comprehensive income (loss)....................         38,045         47,765         (2,248)
                                                                     -----------    -----------    -----------
       TOTAL STOCKHOLDER'S EQUITY................................      1,583,978      1,577,654      1,583,392
                                                                     -----------    -----------    -----------
       TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY................    $20,043,717    $19,027,018    $18,639,687
                                                                     ===========    ===========    ===========
</Table>

The accompanying notes to the financial statements are an integral part of these
statements.

                                        9
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)

<Table>
<Caption>
                                                                   QUARTER ENDED
                                                                      MARCH 31
                                                                --------------------
                                                                  2003        2002
                                                                  ----        ----
                                                                (IN THOUSANDS EXCEPT
                                                                    SHARE DATA)
<S>                                                             <C>         <C>
INTEREST INCOME
Loans, including fees.......................................    $117,492    $131,020
Money market assets:
  Deposits at banks.........................................         993         181
  Federal funds sold and securities purchased under
    agreement to resell.....................................         695       1,817
Trading account.............................................         453         509
Securities available-for-sale:
  U.S. Treasury and Federal agency..........................      42,509      58,321
  State and municipal.......................................           5          14
  Other.....................................................       1,121         549
                                                                --------    --------
       Total interest income................................     163,268     192,411
                                                                --------    --------
INTEREST EXPENSE
Deposits....................................................      30,319      42,861
Short-term borrowings.......................................      14,220      17,649
Senior notes................................................         895       6,077
Minority interest-dividends on preferred stock of
  subsidiary................................................       4,609       4,609
Long-term notes.............................................       2,677       2,852
                                                                --------    --------
       Total interest expense...............................      52,720      74,048
                                                                --------    --------
NET INTEREST INCOME.........................................     110,548     118,363
Provision for loan losses...................................      17,618      28,557
                                                                --------    --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES.........      92,930      89,806
                                                                --------    --------
NONINTEREST INCOME
Trust and investment management fees........................      19,738      19,591
Money market and bond trading...............................       3,125       1,684
Foreign exchange............................................         976       3,148
Service fees and charges....................................      27,724      30,082
Securities gains............................................       2,463      15,374
Bank-owned insurance........................................      10,796      12,814
Foreign fees................................................       6,218       6,025
Other.......................................................      50,268      41,008
                                                                --------    --------
       Total noninterest income.............................     121,308     129,726
                                                                --------    --------
NONINTEREST EXPENSES
Salaries and other compensation.............................      78,768      76,765
Pension, profit sharing and other employee benefits.........      18,123      15,147
Net occupancy...............................................       9,808       9,343
Equipment...................................................      13,069      13,714
Marketing...................................................       7,215       7,338
Communication and delivery..................................       5,598       5,567
Expert services.............................................       6,214       6,270
Contract programming........................................       6,343       7,025
Other.......................................................      18,913      14,595
                                                                --------    --------
                                                                 164,051     155,764
Goodwill and other valuation intangibles....................       4,150       3,823
                                                                --------    --------
       Total noninterest expenses...........................     168,201     159,587
                                                                --------    --------
Income before income taxes..................................      46,037      59,945
Applicable income taxes.....................................      12,615      16,445
                                                                --------    --------
       NET INCOME...........................................    $ 33,422    $ 43,500
                                                                ========    ========
EARNINGS PER COMMON SHARE (based on 10,000,000 average
  shares outstanding)
Net Income..................................................    $   3.34    $   4.35
                                                                ========    ========
</Table>

The accompanying notes to the financial statements are an integral part of these
statements.

                                        10
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                  (UNAUDITED)

<Table>
<Caption>
                                                                   QUARTER ENDED
                                                                     MARCH 31
                                                                -------------------
                                                                 2003        2002
                                                                 ----        ----
                                                                  (IN THOUSANDS)
<S>                                                             <C>        <C>
NET INCOME..................................................    $33,422    $ 43,500
OTHER COMPREHENSIVE INCOME:
  Unrealized losses on available-for-sale securities:
     Unrealized holding losses arising during the period,
      net of tax benefit of $5,453 in 2003 and $8,761 in
      2002..................................................     (8,216)    (12,954)
     Less reclassification adjustment for realized gains
      included in income statement, net of tax expense of
      $958 in 2003 and $5,980 in 2002.......................     (1,505)     (9,394)
                                                                -------    --------
  Other comprehensive loss..................................     (9,721)    (22,348)
                                                                -------    --------
COMPREHENSIVE INCOME........................................    $23,701    $ 21,152
                                                                =======    ========
</Table>

The accompanying notes to the financial statements are an integral part of these
statements.

                                        11
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
                                  (UNAUDITED)

<Table>
<Caption>
                                                                 2003         2002
                                                                 ----         ----
                                                                  (IN THOUSANDS)
<S>                                                           <C>          <C>
BALANCE AT JANUARY 1........................................  $1,577,654   $1,560,677
  Net income................................................      33,422       43,500
  Contributions to capital..................................       2,741        1,707
  Dividends -- preferred stock..............................        (119)        (143)
  Dividends -- common stock.................................     (20,000)          --
  Other comprehensive loss..................................      (9,720)     (22,349)
                                                              ----------   ----------
BALANCE AT MARCH 31.........................................  $1,583,978   $1,583,392
                                                              ==========   ==========
</Table>

The accompanying notes to the financial statements are an integral part of these
statements.

                                        12
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<Table>
<Caption>
                                                                      QUARTER ENDED
                                                                         MARCH 31
                                                                --------------------------
                                                                   2003           2002
                                                                   ----           ----
                                                                      (IN THOUSANDS)
<S>                                                             <C>            <C>
OPERATING ACTIVITIES:
Net Income..................................................    $    33,422    $    43,500
Adjustments to reconcile net income to net cash provided by
  operating activities:
  Provision for loan losses.................................         17,617         28,557
  Depreciation and amortization, including intangibles......         16,477         14,485
  Deferred tax benefit......................................         (1,411)          (500)
  Gain on sales of securities...............................         (2,463)       (15,374)
  Increase in bank-owned insurance..........................        (11,076)       (12,104)
  Trading account net cash sales............................         38,689         71,101
  Net (increase) decrease in interest receivable............         (1,057)         5,107
  Net increase in interest payable..........................          4,722          6,397
  Net increase in loans held for sale.......................        (48,342)       (23,723)
  Other, net................................................         10,979         (6,778)
                                                                -----------    -----------
     Net cash provided by operating activities..............         57,557        110,668
                                                                -----------    -----------
INVESTING ACTIVITIES:
  Net decrease (increase) in interest-bearing deposits at
     banks..................................................         96,116         (6,266)
  Net increase in Federal funds sold and securities
     purchased under agreement to resell....................       (229,925)      (389,400)
  Proceeds from sales of securities available-for-sale......         44,761        339,285
  Proceeds from maturities of securities
     available-for-sale.....................................      1,180,838      1,355,439
  Purchases of securities available-for-sale................     (1,466,830)    (1,020,785)
  Net (increase) decrease in loans..........................       (182,435)       152,455
  Purchases of premises and equipment.......................        (12,624)       (12,105)
                                                                -----------    -----------
     Net cash (used) provided by investing activities.......       (570,099)       418,623
                                                                -----------    -----------
FINANCING ACTIVITIES:
  Net increase (decrease) in deposits.......................        480,387       (164,177)
  Net increase (decrease) in Federal funds purchased and
     securities sold under agreement to repurchase..........        189,361       (631,013)
  Net decrease in other short-term borrowings...............       (100,045)      (190,894)
  Proceeds from issuance of senior notes....................        750,000             --
  Repayment of senior notes.................................       (600,000)            --
  Cash dividends paid on common stock.......................        (20,000)            --
                                                                -----------    -----------
     Net cash provided (used) by financing activities.......        699,703       (986,084)
                                                                -----------    -----------
     NET INCREASE IN CASH AND DEMAND BALANCES DUE FROM
      BANKS.................................................        187,161       (456,793)
     CASH AND DEMAND BALANCES DUE FROM BANKS AT JANUARY 1...      1,057,254      1,203,945
                                                                -----------    -----------
     CASH AND DEMAND BALANCES DUE FROM BANKS AT MARCH 31....    $ 1,244,415    $   747,152
                                                                ===========    ===========
</Table>

The accompanying notes to the financial statements are an integral part of these
statements.

                                        13
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

                       NOTES TO THE FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

     Harris Trust and Savings Bank (the "Bank") is a wholly-owned subsidiary of
Harris Bankcorp, Inc. ("Bankcorp"), a wholly-owned subsidiary of Bankmont
Financial Corp. (a wholly-owned subsidiary of Bank of Montreal). The
consolidated financial statements of the Bank include the accounts of the Bank
and its wholly-owned subsidiaries. Significant intercompany accounts and
transactions have been eliminated. Certain reclassifications were made to
conform prior year's financial statements to the current year's presentation.

     The consolidated financial statements have been prepared by management from
the books and records of the Bank, without audit by independent certified public
accountants. However, these statements reflect all adjustments and disclosures
which are, in the opinion of management, necessary for a fair presentation of
the results for the interim periods presented.

     Because the results of operations are so closely related to and responsive
to changes in economic conditions, the results for any interim period are not
necessarily indicative of the results that can be expected for the entire year.

2. LEGAL PROCEEDINGS

     The Bank and certain of its subsidiaries are defendants in various legal
proceedings arising in the normal course of business. In the opinion of
management, based on the advice of legal counsel, the ultimate resolution of
these matters will not have a material adverse effect on the Bank's consolidated
financial position.

3. CASH FLOWS

     For purposes of the Bank's Consolidated Statements of Cash Flows, cash and
cash equivalents is defined to include cash and demand balances due from banks.
Cash interest payments (net of amounts capitalized) for the three months ended
March 31 totaled $48.0 million and $67.7 million in 2003 and 2002, respectively.
Cash income tax payments totaled $0.1 million in both the three months ended
March 31, 2003 and 2002.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

     The Bank adopted Statement of Financial Accounting Standards ("SFAS") No.
142, "Goodwill and Other Intangible Assets," on January 1, 2002. Under this
standard, goodwill and other intangible assets that have indefinite useful lives
are not subject to amortization while intangible assets with finite lives are
amortized. Goodwill is periodically assessed for impairment, at least annually.
Upon adoption of SFAS No. 142, the Bank had no goodwill.

     The Bank adopted SFAS No. 147, "Acquisitions of Certain Financial
Institutions--an amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9," on October 1, 2002. Under this standard, most
acquisitions of financial institutions are removed from the scope of SFAS No. 72
and Interpretation No. 9 and are accounted for in accordance with SFAS No. 141,
"Business Combinations," and SFAS No. 142. As such, unidentifiable intangible
assets recognized and amortized in accordance with SFAS No. 72, "Accounting for
Certain Acquisitions of Banking or Thrift Institutions," represent goodwill that
will be accounted for under SFAS No. 142. At adoption date, the Bank had an
unidentifiable intangible asset that, in accordance with SFAS No. 72, was
excluded from the scope of SFAS No. 142 and continued to be amortized through
third quarter 2002. Upon adoption of the Statement, the unidentifiable
intangible asset was reclassified to goodwill and no longer amortized starting
in fourth quarter 2002. Under the transitional requirements of the Statement,
the first three quarters of 2002 were restated to reflect the reversal of
previously amortized goodwill in those quarters. The earnings impact for each of
these three quarters was $2.35 million pretax ($1.4 million after tax).

                                        14
<PAGE>
                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

                NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

     The Bank's goodwill was subject to the annual impairment test in the fourth
quarter of 2002. The fair value of the reporting unit was estimated using a
valuation technique based on multiples of book value. The test did not identify
potential impairment and no impairment loss was recognized in 2002.

     The carrying value of the Bank's goodwill as of March 31, 2003 was $89.3
million.

     As of March 31, 2003, the gross carrying amount and accumulated
amortization of the Bank's amortizable intangible assets were $205.1 million and
$110.0 million, respectively.

     Total amortization expense for the Bank's intangible assets was $4.1
million for the quarter ended March 31, 2003.

     Estimated intangible asset amortization expense for the years ending
December 31, 2004, 2005, 2006, 2007 and 2008 is $16.4 million, $16.5 million,
$16.7 million, $16.9 million and $17.1 million, respectively.

                                        15
<PAGE>

                 HARRIS TRUST AND SAVINGS BANK AND SUBSIDIARIES

                                FINANCIAL REVIEW

FIRST QUARTER 2003 COMPARED WITH FIRST QUARTER 2002

SUMMARY

     The Bank had first quarter 2003 net income of $33.4 million, a decrease of
$10.1 million or 23 percent from first quarter 2002.

     Cash ROE was 10.69 percent in the current quarter and 13.30 percent in
first quarter 2002. Excluding unrealized gains and losses on the securities
portfolio recorded directly to equity, cash ROE was 11.03 percent for the
current year's first quarter, compared to 13.57 percent a year ago. The income
from continued strong growth in consumer, mortgage, and small business loans and
retail deposits and from a reduced loan loss provision was more than offset by
lower net interest income and noninterest income, primarily gains from sales of
securities.

     First quarter net interest income on a fully taxable equivalent basis was
$113.6 million, down $7.3 million or 6 percent from $120.9 million in 2002's
first quarter. Average earning assets decreased 1 percent to $15.85 billion from
$15.97 billion in 2002. Average loans decreased $383 million which was offset by
an increase in the investment portfolio of $280 million. Net interest margin
decreased to 2.90 percent from 3.06 percent in the same quarter last year.

     The first quarter 2003 provision for loan losses of $17.6 million was down
from $28.6 million in the first quarter of 2002. Net charge-offs were $16.3
million compared to $36.2 million in the prior year's quarter. Most of the
increase resulted from lower commercial loan write offs.

     First quarter 2003 noninterest income of $87.2 million decreased $15.1
million from the same quarter last year. Most of the decline was the result of a
$12.9 million reduction in net gains from securities sales compared to a year
ago quarter. Bond trading profits and syndication fees increased from first
quarter 2002.

     First quarter 2003 noninterest expenses of $134.1 million decreased $2.0
million or 1 percent from the year-ago quarter.

     Nonperforming assets at March 31, 2003 were $175 million or 1.79 percent of
total loans, compared to $172 million or 1.79 percent at December 31, 2002, and
$206 million or 2.10 percent a year ago. At March 31, 2003, the allowance for
possible loan losses was $208 million, equal to 2.13 percent of loans
outstanding, compared to $220 million or 2.25 percent at the end of first
quarter 2002. As a result, the ratio of the allowance for possible loan losses
to nonperforming assets was 107 percent at March 31, 2002 compared to 119
percent at March 31, 2003.

     At March 31, 2003, Tier 1 capital of the Bank amounted to $1.59 billion,
down from $1.65 billion one year earlier. The regulatory leverage capital ratio
was 8.70 percent for the first quarter of 2003 compared to 8.91 percent in the
same quarter of 2002. The Bank's capital ratio exceeds the prescribed regulatory
minimum for banks. The Bank's March 31, 2003 Tier 1 and total risk-based capital
ratios were 9.92 percent and 12.12 percent compared to respective ratios of
10.40 percent and 12.83 percent at March 31, 2002.

                                        16
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

     Within 90 days prior to the filing of this report, Paul R. Skubic, the
Chairman of the Board, Chief Executive Officer and President of the Company, and
Pamela C. Piarowski, the Chief Financial Officer of the Company, evaluated the
effectiveness of the disclosure controls and procedures of the Company and
concluded that these disclosure controls and procedures are effective to ensure
that material information required to be included in this Report has been made
known to them in a timely fashion. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these internal controls subsequent to the date of their evaluation, including
any corrective action with regard to significant deficiencies and material
weaknesses.

                           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 6. (a) EXHIBITS

            99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
            PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        (b) Reports on Form 8-K: None

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Harris Preferred Capital Corporation has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly authorized
on the 14th day of May 2003.

                                          /s/ PAUL R. SKUBIC
                                          --------------------------------------
                                          Paul R. Skubic
                                          Chairman of the Board and President

                                          /s/ PAMELA C. PIAROWSKI
                                          --------------------------------------
                                          Pamela C. Piarowski
                                          Chief Financial Officer

                                        17
<PAGE>

                                 CERTIFICATIONS

I, Paul R. Skubic, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Harris Preferred
Capital Corporation;

     2.Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of Harris
Preferred Capital Corporation as of, and for, the periods presented in this
quarterly report;

     4. Harris Preferred Capital Corporation's other certifying officer and I
are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Harris
Preferred Capital Corporation and we have:

          a) designed such disclosure controls and procedures to ensure that
     material information relating to Harris Preferred Capital Corporation,
     including its consolidated subsidiaries, is made known to us by others
     within those entities, particularly during the period in which this
     quarterly report is being prepared;

          b) evaluated the effectiveness of Harris Preferred Capital
     Corporation's disclosure controls and procedures as of a date within 90
     days prior to the filing date of this quarterly report (the "Evaluation
     Date"); and

          c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. Harris Preferred Capital Corporation's other certifying officer and I
have disclosed, based on our most recent evaluation, to Harris Preferred Capital
Corporation's auditors and the audit committee of Harris Preferred Capital
Corporation's board of directors (or persons performing the equivalent
functions):

          a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect Harris Preferred Capital
     Corporation's ability to record, process, summarize and report financial
     data and have identified for Harris Preferred Capital Corporation's
     auditors any material weaknesses in internal controls; and

          b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in Harris Preferred Capital
     Corporation's internal controls; and

     6. Harris Preferred Capital Corporation's other certifying officer and I
have indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

                                          /s/ PAUL R. SKUBIC
                                          --------------------------------------
                                          Paul R. Skubic
                                          Chairman of the Board and President

Date: 5/14/03

A signed original of this written statement required by Section 906 has been
provided to Harris Preferred Capital Corporation and will be retained by Harris
Preferred Capital Corporation and furnished to the Securities and Exchange
Commission or its staff upon request.

                                        18
<PAGE>

                                 CERTIFICATIONS

I, Pamela C. Piarowski, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Harris Preferred
Capital Corporation;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of Harris
Preferred Capital Corporation as of, and for, the periods presented in this
quarterly report;

     4. Harris Preferred Capital Corporation's other certifying officer and I
are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Harris
Preferred Capital Corporation and we have:

          a) designed such disclosure controls and procedures to ensure that
     material information relating to Harris Preferred Capital Corporation,
     including its consolidated subsidiaries, is made known to us by others
     within those entities, particularly during the period in which this
     quarterly report is being prepared;

          b) evaluated the effectiveness of Harris Preferred Capital
     Corporation's disclosure controls and procedures as of a date within 90
     days prior to the filing date of this quarterly report (the "Evaluation
     Date"); and

          c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. Harris Preferred Capital Corporation's other certifying officer and I
have disclosed, based on our most recent evaluation, to Harris Preferred Capital
Corporation's auditors and the audit committee of Harris Preferred Capital
Corporation's board of directors (or persons performing the equivalent
functions):

          a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect Harris Preferred Capital
     Corporation's ability to record, process, summarize and report financial
     data and have identified for Harris Preferred Capital Corporation's
     auditors any material weaknesses in internal controls; and

          b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in Harris Preferred Capital
     Corporation's internal controls; and

     6. Harris Preferred Capital Corporation's other certifying officer and I
have indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

                                          /s/ PAMELA C. PIAROWSKI
                                          --------------------------------------
                                          Pamela C. Piarowski
                                          Chief Financial Officer

Date: 5/14/03

A signed original of this written statement required by Section 906 has been
provided to Harris Preferred Capital Corporation and will be retained by Harris
Preferred Capital Corporation and furnished to the Securities and Exchange
Commission or its staff upon request.

                                        19