##### 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 March 31, 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




---



##### 





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


24Item 4.

Controls and Procedures


25PART II

OTHER INFORMATIONItem 6.

Exhibits


26Signatures


27EX-31.1EX-31.2EX-32.1




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED BALANCE SHEETS
  March 31


December 31


March 312010


2009


2009(unaudited)


(audited)


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

$
662


$
916


$
50,909Securities purchased from Harris N.A. under agreement to resell


12,000



22,000



6,367Total cash and cash equivalents

$
12,662


$
22,916


$
57,276Notes receivable from Harris N.A.


3,534



3,584



3,948Securities
    available-for-sale,
    at fair valueMortgage-backed


494,642



515,190



492,633U.S. Treasury Bills


74,991



39,999



79,999Other assets


1,786



1,885



1,868Total assets

$
587,615


$
583,574


$
635,724Liabilities and Stockholders EquityAccrued expenses

$
535


$
111


$
503Deferred state tax liabilities


1,225



973



1,060Payable for security purchased










49,999Total liabilities

$
1,760


$
1,084


$
51,562Stockholders 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 of distributions


(431
)


(601
)


(39
)Accumulated other comprehensive income  net
    unrealized gains on
    available-for-sale
    securities


15,552



12,357



13,467Total stockholders equity

$
585,855


$
582,490


$
584,162Total liabilities and stockholders equity

$
587,615


$
583,574


$
635,724   The accompanying notes are an integral part of these
    financial statements.
 2




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED STATEMENTS OF INCOME
 AND
    COMPREHENSIVE INCOME
  Three Months Ended March 31,2010


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

$
11


$
9Notes receivable from Harris N.A.


57



64Securities
    available-for-sale:Mortgage-backed


5,281



5,382U.S. Treasury Bills


1



1Total interest income

$
5,350


$
5,456Operating expenses:Loan servicing fees paid to Harris N.A.

$
3


$
3Advisory fees paid to Harris N.A.


62



56General and administrative


130



120Total operating expenses

$
195


$
179Income before income taxes

$
5,155


$
5,277Applicable state income taxes


376



385Net Income

$
4,779


$
4,892Preferred stock dividends


4,609



4,609Net income available to common stockholder

$
170


$
283Basic and diluted earnings per common share

$
144


$
283Net income

$
4,779


$
4,892Other comprehensive income:Available-for-sale
    securities:Unrealized holding gains arising during the period, net of
    deferred state taxes


3,195



3,635Less reclassification adjustment for realized (gains) losses
    included in net income






Comprehensive income

$
7,974


$
8,527   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
  Three Months EndedMarch 312010


2009(in thousands)Balance at January 1

$
582,490


$
500,244Net income


4,779



4,892Other comprehensive income


3,195



3,635Capital contribution and issuance of common stock






80,000Dividends (preferred stock $0.4609 per share)


(4,609
)


(4,609
)Balance at March 31

$
585,855


$
584,162   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
  Three Months Ended March 31,2010


2009(in thousands)Operating Activities:Net income

$
4,779


$
4,892Adjustments to reconcile net income to net cash provided by
    operating activities:Net decrease in other assets


99



17Net increase in accrued expenses


424



391Net increase in payable for security purchased






49,999Net cash provided by operating activities

$
5,302


$
55,299Investing Activities:Repayments of notes receivable from Harris N.A.

$
50


$
336Purchases of securities
    available-for-sale


(82,617
)


(128,575
)Proceeds from maturities/redemptions of securities
    available-for-sale


71,620



48,146Net cash used in investing activities

$
(10,947
)

$
(80,093
)Financing Activities:Cash dividends paid on preferred stock

$
(4,609
)

$
(4,609
)Capital contribution and issuance of common stock






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

$
(4,609
)

$
75,391Net (decrease) increase in cash and cash equivalents with Harris
    N.A.

$
(10,254
)

$
50,597Cash 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

$
12,662


$
57,276   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  available-for-sale
  March 31, 2010Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


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

$
477,857


$
16,843


$
58


$
494,642U.S. Treasury Bills


74,999







8



74,991Total Securities

$
552,856


$
16,843


$
66


$
569,633   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  6




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  March 31, 2009Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


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

$
478,108


$
14,525


$



$
492,633U.S. Treasury Bills


79,998



1







79,999Total Securities

$
558,106


$
14,526


$



$
572,632   available-for-sale. Available-for-sale available-for-sale
  other-than-temporary
  other-than-temporarily
  March 31, 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

$
11,540


$
58


$



$



$
11,540


$
58U.S. Treasury Bills


74,991



8











74,991



8Total

$
86,531


$
66


$



$



$
86,531


$
66   7




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  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



1$
144,987


$
886


$



$



$
144,987


$
886   March 31, 2009Length of Continuous Unrealized Loss PositionLess than 12 months

12 months or longer

TotalUnrealized



Unrealized



UnrealizedFair Value

Loss

Fair Value

Losses

Fair Value

Losses(in thousands)Residential mortgage-backed

$
1,700


$



$



$



$
1,700


$
   available-for-sale
  March 31, 2010Amortized


FairCost


Value(in thousands)Maturities:Within 1 year

$
87,400


$
87,4951 to 5 years


29,375



30,0515 to 10 years


119,530



126,058Over 10 years


316,551



326,029Total

$
552,856


$
569,633   4.
    Fair
    Value Measurements   8




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    Fair Value


Fair Value Measurements UsingMarch 31, 2010


Level 1


Level 2


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

$
494,642


$



$
494,642


$
U.S. Treasury Bills


74,991



74,991







$
569,633


$
74,991


$
494,642


$
   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 Bills


39,999



39,999







$
555,189


$
39,999


$
515,190


$
   Fair Value


Fair Value Measurements UsingMarch 31, 2009


Level 1


Level 2


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

$
492,633


$



$
492,633


$
U.S. Treasury Bills


79,999



79,999







$
572,632


$
79,999


$
492,633


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




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    March 31, 2010Carrying


FairValue


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

$
662


$
662Securities purchased from Harris N.A. under agreement to resell


12,000



12,000Notes receivable from Harris N.A.


3,534



4,743Securities
    available-for-sale


569,633



569,633Accrued interest receivable


1,786



1,786Total on-balance-sheet financial assets

$
587,615


$
588,824   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
  First
    Quarter 2010 Compared with First Quarter 2009
    available-for-sale
 10




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
            Liquidity
    Risk Management
       11




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    available-for-sale. available-for-sale available-for-sale available-for-sale
  Market
    Risk Management
    Accounting
    Pronouncements
      Tax
    Matters
   12




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    Other
    Information
  Form 10-K. Form 10-Q
  Financial
    Statements of Harris N.A.
   13




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CONDITION
  March 31


December 31


March 312010


2009


2009(unaudited)


(audited)


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

$
698,079


$
904,865


$
1,098,403Money market assets:Interest-bearing deposits at banks ($9.9 billion,
    $8.4 billion, and $10.1 billion held at Federal
    Reserve Bank at March 31, 2010, December 31, 2009, and
    March 31, 2009 respectively)


10,469,146



9,231,581



11,134,016Federal funds sold and securities purchased under agreement to
    resell


350,293



174,979



326,313Total cash and cash equivalents

$
11,517,518


$
10,311,425


$
12,558,732Securities
    available-for-sale
    at fair value


5,127,868



5,898,831



7,009,807Trading account assets and derivative instruments


1,367,868



1,353,509



1,302,193Loans, net of unearned income


22,104,790



23,175,717



25,099,589Allowance for loan losses


(693,686
)


(680,782
)


(607,561
)Net loans

$
21,411,104


$
22,494,935


$
24,492,028Loans held for sale


30,736



29,974



72,587Premises and equipment


523,208



526,623



521,719Bank-owned insurance


1,348,093



1,339,657



1,315,451Goodwill and other intangible assets


807,132



817,507



772,696Other assets


1,262,265



1,199,166



1,137,105Total assets

$
43,395,792


$
43,971,627


$
49,182,318LIABILITIESDeposits in domestic offices  noninterest-bearing

$
9,590,125


$
9,704,773


$
12,055,125 interest-bearing (includes $870.2 million, $707.4 million and $156.2 million measured at fair value at March 31, 2010, December 31, 2009 and March 31, 2009, respectively)


19,559,425



18,968,058



24,086,415Deposits in foreign offices     
    interest-bearing


1,384,778



1,622,410



806,129Total deposits

$
30,534,328


$
30,295,241


$
36,947,669Federal funds purchased


227,184



236,099



299,678Securities sold under agreement to repurchase


2,176,265



2,512,490



1,541,936Short-term borrowings


384,921



717,050



593,229Accrued interest, taxes and other expenses


145,168



172,618



194,142Accrued pension and post-retirement


23,777



58,393



113,228Other liabilities


578,241



643,289



592,350Long-term notes  senior/unsecured


2,396,500



2,396,500



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


2,375,000



2,375,000



2,375,000Long-term notes  subordinated


200,000



292,750



292,750Total liabilities

$
39,041,384


$
39,699,430


$
45,046,482STOCKHOLDERS EQUITYCommon stock ($10 par value); authorized
    40,000,000 shares; issued and outstanding
    17,767,512 shares at March 31, 2010,
    17,534,512 shares at December 31, 2009, and
    17,149,512 shares at March 31, 2009

$
177,675


$
175,345


$
171,495Surplus


2,413,757



2,322,917



2,172,217Retained earnings


1,630,329



1,621,719



1,737,956Accumulated other comprehensive loss


(117,353
)


(97,784
)


(195,832
)Stockholders equity before noncontrolling
    interest  preferred stock of subsidiary

$
4,104,408


$
4,022,197


$
3,885,836Noncontrolling interest  preferred stock of subsidiary


250,000



250,000



250,000Total stockholders equity

$
4,354,408


$
4,272,197


$
4,135,836Total liabilities and stockholders equity

$
43,395,792


$
43,971,627


$
49,182,318   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)
  Three Months Ended March 312010


2009(in thousands)Interest IncomeLoans

$
255,058


$
287,978Money market assets:Deposits at banks


5,784



6,386Federal funds sold and securities purchased under agreement to
    resell


62



455Trading account assets


2,950



2,537Securities
    available-for-sale:U.S. Treasury and federal agency


15,998



34,269State and municipal


12,421



13,853Other


1,468



4,110Total interest income

$
293,741


$
349,588Interest ExpenseDeposits

$
42,769


$
111,980Short-term borrowings


1,752



1,897Short-term senior notes






6Long-term notes  senior/unsecured


22,479



10,317Long-term notes  senior/secured


12,240



2,832Long-term notes  subordinated


467



1,650Total interest expense

$
79,707


$
128,682Net Interest Income

$
214,034


$
220,906Provision for loan losses


91,727



93,094Net Interest Income after Provision for Loan Losses

$
122,307


$
127,812Noninterest IncomeTrust and investment management fees

$
20,562


$
18,782Net money market and bond trading income, including derivative
    activity


13,857



4,432Foreign exchange trading gains, net


2,913



2,625Service charges and fees


46,910



47,646Charge card income


29,294



56Equity securities gains, net


2,175



1,952Net securities gains, other than trading


1,674



28,669Other-than-temporary
    impairment on securities


(21
)


(183
)Bank-owned insurance


11,900



11,103Letter of credit fees


5,386



5,094Net gains on loans held for sale


4,095



1,729Other


10,700



9,007Total noninterest income

$
149,445


$
130,912Noninterest ExpensesSalaries and other compensation

$
94,010


$
92,879Pension, profit sharing and other employee benefits


29,739



30,732Net occupancy


24,969



26,984Equipment


20,048



17,502Marketing


11,891



8,825Communication and delivery


7,372



7,647Professional fees


21,126



28,219Outside information processing, database and network fees


8,505



8,979FDIC Insurance


11,234



15,034Intercompany services, net


(2,948
)


(184
)Charge card expense


7,305



Amortization of intangibles


5,688



7,106Other


23,753



18,242Total noninterest expenses

$
262,692


$
261,965Income (loss) before income tax benefit

$
9,060


$
(3,241
)Applicable income tax benefit


(4,159
)


(11,335
)Net income

$
13,219


$
8,094Less: noncontrolling interest  dividends on preferred
    stock of subsidiary


4,609



4,609Net Income Available for Common Stockholder

$
8,610


$
3,485   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)
  Three Months Ended March 312010


2009(in thousands)Net income

$
13,219


$
8,094Other comprehensive income:Cash flow hedges:Net unrealized (loss) gain on derivative instruments, net of tax
    (benefit) expense of ($10,213) in 2010 and $9,147 in 2009


(18,966
)


16,988Reclassification adjustment for realized losses included in net
    income, net of tax benefit of $390 in 2010 and $1,681 in 2009


723



3,121Pension and postretirement medical benefit plans:Net gain and net prior service cost, net of tax expense of
    $1,318 in 2010 and $3,531 in 2009


4,893



6,557Reclassification adjustment for amortization included in net
    income, net of tax benefit of $663 and $366 in 2009


1,231



681Available-for-sale
    securities:Unrealized holding (losses) gains arising during the period, net
    of tax (benefit) expense of ($4,904) in 2010 and $799 in 2009


(6,362
)


1,495Reclassification adjustment for realized gains included in net
    income, net of tax expense of $586 in 2010 and $10,034 in 2009


(1,088
)


(18,635
)Other comprehensive (loss) income

$
(19,569
)

$
10,207Comprehensive (loss) income

$
(6,350
)

$
18,301Comprehensive income related to noncontrolling interest


4,609



4,609Comprehensive (loss) income available for common
    stockholder

$
(10,959
)

$
13,692   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 except per share data)Balance at December 31, 2009

$
175,345


$
2,322,917


$
1,621,719


$
(97,784
)

$
250,000


$
4,272,197Stock option exercise






170















170Net income










8,610







4,609



13,219Dividends  preferred stock of subsidiary


















(4,609
)


(4,609
)Other comprehensive loss














(19,569
)






(19,569
)Issuance of common stock and contribution to capital surplus


2,330



90,670















93,000Balance at March 31, 2010

$
177,675


$
2,413,757


$
1,630,329


$
(117,353
)

$
250,000


$
4,354,408Balance at December 31, 2008

$
171,495


$
2,172,030


$
1,734,471


$
(206,039
)

$
250,000


$
4,121,957Stock option exercise






187















187Net income










3,485







4,609



8,094Dividends  preferred stock of subsidiary


















(4,609
)


(4,609
)Other comprehensive income














10,207







10,207Balance at March 31, 2009

$
171,495


$
2,172,217


$
1,737,956


$
(195,832
)

$
250,000


$
4,135,836   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)
  Three Months Ended March 312010


2009Cash Flows from Operating Activities:Net income

$
13,219


$
8,094Less: noncontrolling interest  dividends on preferred
    stock of subsidiary


4,609



4,609Net income available for common stockholder

$
8,610


$
3,485Adjustments to determine net cash flows provided by (used in)
    operating activities:Provision for loan losses


91,727



93,094Depreciation and amortization, including intangibles


25,907



25,221Deferred tax expense


63,340



7,874Excess tax expense from stock options exercise


59



Other-than-temporary
    impairment on securities


21



183Net gains on securities, other than trading


(1,674
)


(28,669
)Net equity investment gains


(2,175
)


(1,952
)Increase in bank-owned insurance


(8,436
)


(11,136
)Net (increase) decrease in trading securities


(21,374
)


142,933Decrease in accrued interest receivable


2,015



23,027(Increase) decrease in prepaid expenses


(97,129
)


2,359Decrease in accrued interest payable


(4,437
)


(16,454
)Net increase in accrued tax payable to other assets


(65,210
)


(13,329
)Decrease in other accrued expenses


(51,373
)


(6,292
)Net change in pension and post retirement benefits


(26,511
)


(47,570
)Origination of loans held for sale


(198,396
)


(211,016
)Proceeds from sale of loans held for sale


201,729



169,702Net gains on loans held for sale


(4,095
)


(1,729
)Net (gains) losses on sale of premises and equipment


(782
)


321Recoveries on charged-off loans


17,782



16,168Net increase in settlement clearing account






(43,367
)Net increase (decrease) in marked to market hedging derivatives


23,076



(29,752
)Other, net


(16,249
)


(39,977
)Net cash provided by (used in) operating activities

$
(63,575
)

$
33,124Cash Flows from Investing Activities:Proceeds from sales of securities
    available-for-sale

$
338,525


$
2,830,608Proceeds from maturities of securities
    available-for-sale


1,414,986



1,054,551Purchases of securities
    available-for-sale


(1,000,715
)


(1,866,025
)Net decrease in loans


974,322



1,220,867Purchases of premises and equipment


(16,690
)


(19,065
)Sales of premises and equipment


1,670



12,999Acquisitions, net of cash acquired






(3,423
)Net cash provided by investing activities

$
1,712,098


$
3,230,512Cash flows from Financing Activities:Net increase (decrease) in deposits

$
76,285


$
(16,484,679
)Net increase in deposits measured at fair value


162,802



78,504Net decrease in Federal funds purchased and securitiessold under agreement to repurchase


(345,140
)


(1,738,669
)Net (decrease) increase in other short-term borrowings


(332,129
)


233,753Net decrease in short-term senior notes






(75,000
)Repayment of long-term notes  subordinated


(92,750
)


Net proceeds from stock options exercise


170



187Excess tax expense from stock options exercise


(59
)


Capital contributions


93,000



Cash dividends paid on preferred stock


(4,609
)


(4,609
)Net cash used in financing activities

$
(442,430
)

$
(17,990,513
)Net increase (decrease) in cash and cash equivalents

$
1,206,093


$
(14,726,877
)Cash and cash equivalents at January 1


10,311,425



27,285,609Cash and cash equivalents at March 31

$
11,517,518


$
12,558,732   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
      2.
    Contingent
    Liabilities and Litigation    3.
    Cash
    Flows   19




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    4.
    Visa
    Indemnification Charge            5.
    Auction
    Rate Securities Purchase Program     20




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    available-for-sale.
  6.
    Health
    Care Legislation    7.
    Noncontrolling
    Interests  810-10-65)
  8.
    FDIC
    Special Assessment    9.
    Recent
    accounting standards   21




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    10.
    Subsequent
    Event   22




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  FINANCIAL
    REVIEW
  First
    Quarter 2010 Compared with First Quarter 2009
  Summary
                 23




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##### Table of Contents



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


Year Ending December 31,








Fair Value atDec. 31, 2010


2011


2012


2013


2014


Thereafter


Total


March 31, 2010Residential mortgage-backedAmortized cost

$
8,643


$
13,195


$



$
11,240


$
6,375


$
438,404


$
477,857


$
494,642Average Yield


4.05%



4.00%







4.00%



4.00%



4.49%



4.45%U.S. Treasury BillsAmortized cost

$
74,999


$



$



$



$



$



$
74,999


$
74,991Average Yield


0.076%























0.076%   sub-prime
 24




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##### Table of Contents



Item 4T.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures    (b)
    Changed
    in Internal Control over Financial Reporting   25




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##### Table of Contents



Part II.
    OTHER INFORMATION  Items 1,
    1A, 2, 3, 4 and 5 are being omitted from this Report because
    such items are not applicable to the reporting period.
  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
 26




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##### Table of Contents



SIGNATURES
     Paul
    R. Skubic
      Pamela
    C. Piarowski
    27