##### Table of Contents





United States
 Securities And Exchange
    Commission
 Washington, D.C.
    20549
  Form 10-Q/A
  QUARTERLY REPORT UNDER
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the quarterly period ended
    March 31, 2008
  Commission file number
    1-13805
  Harris Preferred Capital
    Corporation
    Maryland

# 36-4183096(State or other jurisdiction 
    of incorporation or organization)

(I.R.S. EmployerIdentification No.)111 West Monroe Street, Chicago, Illinois

60603(Address of principal executive offices)

(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
     Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

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


7Item 3.


Quantitative and Qualitative Disclosures about
    Market Risk


20Item 4.


Controls and Procedures


20Part II


OTHER INFORMATIONItem 6.


Exhibits


21Signatures


22CertificationCertificationSection 1350 Certifications




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##### Table of Contents



Explanatory
    Note
  Form 10-Q/A Form 10-Q Company Report




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##### Table of Contents



Part I.
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  March 31,


December 31,


March 31,2008


2007


2007(unaudited)





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

$
1,134


$
356


$
368Securities purchased from Harris N.A. under agreement to resell


13,191



16,509



8,223Notes receivable from Harris N.A.


4,992



5,335



5,923Securities available-for-sale:Mortgage-backed


438,698



369,244



399,229U.S. Treasury


34,997



99,950



69,912Other assets


1,906



1,529



1,663Total assets

$
494,918


$
492,923


$
485,318Liabilities and Stockholders EquityAccrued expenses

$
95


$
129


$
116Dividends payable






3,000



Total liabilities

$
95


$
3,129


$
116Commitments and contingencies










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


250,000



250,000



250,000Common stock ($1 par value); 1,000 shares authorized,
    issued and outstanding


1



1



1Additional paid-in capital


240,733



240,733



240,733Earnings in excess of distributions


723



67



822Accumulated other comprehensive income (loss)  net
    unrealized gains (losses) on available-for-sale securities


3,366



(1,007
)


(6,354
)Total stockholders equity


494,823



489,794



485,202Total liabilities and stockholders equity

$
494,918


$
492,923


$
485,318   The accompanying notes are an integral part of these
    financial statements.
 2




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HARRIS
    PREFERRED CAPITAL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME
    AND COMPREHENSIVE INCOME
    (Unaudited)
  Quarter EndedMarch 312008


2007(in thousands, except share data)Interest income:Securities purchased from Harris N.A. under agreement to resell

$
634


$
859Notes receivable from Harris N.A.


82



97Securities available-for-sale:Mortgage-backed


4,674



4,592U.S. Treasury


16



70Total interest income


5,406



5,618Operating expenses:Loan servicing fees paid to Harris N.A.


4



5Advisory fees paid to Harris N.A.


39



31General and administrative


98



80Total operating expenses


141



116Net income


5,265



5,502Preferred dividends


4,609



4,609Net income available to common stockholder

$
656


$
893Basic and diluted earnings per common share

$
656.00


$
893.00Net income

$
5,265


$
5,502Other comprehensive income:Available-for-sale securities:Unrealized holding gains (losses) arising during the period


4,373



1,700Less reclassification adjustment for realized (gains) losses
    included in net income






Comprehensive income

$
9,638


$
7,202   The accompanying notes are an integral part of these
    financial statements.
 3




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (Unaudited)
  Quarter EndedMarch 312008


2007(in thousands,except per share data)Balance at January 1

$
489,794


$
482,609Net income


5,265



5,502Other comprehensive income


4,373



1,700Dividends (preferred stock $0.4609 per share)


(4,609
)


(4,609
)Balance at March 31

$
494,823


$
485,202   The accompanying notes are an integral part of these
    financial statements.
 4




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HARRIS
    PREFERRED CAPITAL CORPORATION
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS

(Unaudited) Quarter EndedMarch 312008


2007(in thousands)Operating Activities:Net Income

$
5,265


$
5,502Adjustments to reconcile net income to net cash provided by
    operating activities:Net (increase) decrease in other assets


(377
)


4Net decrease in accrued expenses


(34
)


(4
)Net cash provided by operating activities


4,854



5,502Investing Activities:Repayments of notes receivable from Harris N.A.


343



589Purchases of securities available-for-sale


(121,331
)


(79,524
)Proceeds from maturities of securities available-for-sale


121,203



76,106Net cash provided (used in) by investing activities


215



(2,829
)Financing Activities:Cash dividends paid on common stock


(3,000
)


Cash dividends paid on preferred stock


(4,609
)


(9,220
)Net cash used in financing activities


(7,609
)


(9,220
)Net decrease in cash and cash equivalents


(2,540
)


(6,547
)Cash and cash equivalents at beginning of period


16,865



15,138Cash and cash equivalents at end of period

$
14,325


$
8,591   The accompanying notes are an integral part of these
    financial statements.
 5




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HARRIS
    PREFERRED CAPITAL CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation    Form 10-K.
    2.
    Commitments
    and Contingencies    3.
    Securities    March 31,


March 31,2008


2007Amortized


Unrealized


Unrealized


Fair


Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


Value


Cost


Gains


Losses


Value(In thousands)Available-for-Sale SecuritiesMortgage-backed

$
435,332


$
3,961


$
595


$
438,698


$
405,583


$
936


$
7,290


$
399,229U.S. Treasury Bills


34,997











34,997



69,912











69,912Total Securities

$
470,329


$
3,961


$
595


$
473,695


$
475,495


$
936


$
7,290


$
469,141   4.
    Fair
    Value Measurements  No. FAS 157-2,
 6




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HARRIS
    PREFERRED CAPITAL CORPORATION
  FSP 157-2
    Fair Value

Fair Value Measurements UsingMarch 31, 2008

Level 1

Level 2

Level 3(in thousands)Available-for-sale securities

$
473,695


$
34,997


$
438,698


$
   5.
    Fair
    Value Option    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 2008 Compared with First Quarter 2007
     7




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HARRIS
    PREFERRED CAPITAL CORPORATION
              Liquidity
    Risk Management
     8




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
          Market
    Risk Management
    Accounting
    Pronouncements
  No. FAS 157-2, FSP 157-2
     9




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HARRIS
    PREFERRED CAPITAL CORPORATION
  Other
    Matters
    Financial
    Statements of Harris N.A.
   10




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HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CONDITION
  March 31


December 31


March 312008


2007


2007(unaudited)


(audited)


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

$
1,285,846


$
1,179,134


$
1,168,548Money market assets:Interest-bearing deposits at banks


1,041,228



949,803



894,412Federal funds sold and securities purchased under agreement to
    resell


582,881



1,520,183



92,492Total cash and cash equivalents

$
2,909,955


$
3,649,120


$
2,155,452Securities available-for-sale at fair value (amortized cost of
    $9.0 billion, $9.3 billion and $10.7 billion at
    March 31, 2008, December 31, 2007 and March 31,
    2007, respectively)


9,044,917



9,288,595



10,724,431Trading account assets


447,057



288,785



143,471Loans


26,086,694



25,534,487



25,781,070Allowance for loan losses


(373,217
)


(367,525
)


(325,940
)Net loans

$
25,713,477


$
25,166,962


$
25,455,130Loans held for sale


88,178



62,695



33,912Premises and equipment


481,042



485,510



496,177Bank-owned insurance


1,256,829



1,246,156



1,200,323Goodwill and other intangible assets


539,698



544,525



556,355Other assets


949,400



747,935



908,881Total assets

$
41,430,553


$
41,480,283


$
41,674,132LIABILITIESDeposits in domestic offices  noninterest-bearing

$
6,092,701


$
6,478,464


$
5,656,941 interest-bearing


21,579,965



21,905,547



22,889,894Deposits in foreign offices   interest-bearing


971,269



1,149,167



836,384Total deposits

$
28,643,935


$
29,533,178


$
29,383,219Federal funds purchased


366,998



182,625



616,755Securities sold under agreement to repurchase


973,853



1,613,529



3,708,062Short-term borrowings


549,611



707,540



1,909,984Short-term senior notes


930,000



80,000



100,000Accrued interest, taxes and other expenses


222,828



257,415



209,107Accrued pension and post-retirement


83,366



88,415



158,809Other liabilities


785,915



589,989



392,117Minority interest  preferred stock of subsidiary


250,000



250,000



250,000Long-term notes  senior


2,096,500



2,096,500



996,500Long-term notes  subordinated


292,750



292,750



292,750Long-term notes  secured


2,375,000



2,000,000



Total liabilities

$
37,570,756


$
37,691,941


$
38,017,303STOCKHOLDERS EQUITYCommon stock ($10 par value); authorized
    40,000,000 shares; issued and outstanding
    15,514,761 shares at March 31, 2008, December 31,
    2007 and March 31, 2007, respectively

$
155,148


$
155,148


$
155,148Surplus


1,782,213



1,780,609



1,770,598Retained earnings


1,947,171



1,879,907



1,823,057Accumulated other comprehensive loss


(24,735
)


(27,322
)


(91,974
)Total stockholders equity

$
3,859,797


$
3,788,342


$
3,656,829Total liabilities and stockholders equity

$
41,430,553


$
41,480,283


$
41,674,132   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 11




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HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 (Unaudited)
  Three Months Ended March 312008


2007(in thousands)Interest IncomeLoans

$
371,397


$
408,411Money market assets:Deposits at banks


5,376



5,101Federal funds sold


7,515



4,232Trading account assets


2,508



1,782Securities available-for-sale:U.S. Treasury and federal agency


77,347



113,050State and municipal


11,662



7,767Other


4,757



6,069Total interest income

$
480,562


$
546,412Interest ExpenseDeposits

$
186,907


$
233,929Short-term borrowings


22,373



77,398Short-term senior notes


5,152



1,331Minority interest  dividends on preferred stock of
    subsidiary


4,609



4,609Long-term notes  senior


20,432



13,728Long-term notes  subordinated


3,561



4,225Long-term notes  secured


20,662



Total interest expense

$
263,696


$
335,220Net Interest Income

$
216,866


$
211,192Provision for loan losses


22,900



3,000Net Interest Income after Provision for Loan Losses

$
193,966


$
208,192Noninterest IncomeTrust and investment management fees

$
22,836


$
22,792Money market and bond trading (losses) gains


(455
)


2,857Foreign exchange


1,125



1,150Service charges and fees


42,662



39,461Equity securities gains


39,796



Securities gains (losses), net


10,837



(528
)Bank-owned insurance


12,392



12,688Letter of credit fees


3,829



5,233Other


14,705



18,613Total noninterest income

$
147,727


$
102,266Noninterest ExpensesSalaries and other compensation

$
97,352


$
91,785Pension, profit sharing and other employee benefits


33,454



33,804Net occupancy


25,497



21,820Equipment


15,657



15,773Marketing


10,818



10,066Communication and delivery


7,212



7,194Expert services


9,796



7,888Contract programming


7,571



7,921Intercompany services, net


4,849



17,566Restructuring (reversal) charge


(141
)


13,678Visa indemnification charge (reversal)


(17,000
)


Other


34,914



28,793Amortization of intangibles


6,164



6,406Total noninterest expenses

$
236,143


$
262,694Income before income taxes

$
105,550


$
47,764Applicable income taxes


30,287



8,111Net Income

$
75,263


$
39,653   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 12




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
  Three Months Ended March 312008


2007(in thousands)Net income

$
75,263


$
39,653Other comprehensive income:Cash flow hedges:Net unrealized loss on derivative instruments, net of tax
    benefit $14,533 in 2008 and $2,171 in 2007


(26,988
)


(3,525
)Less reclassification adjustment for losses included in net
    income, net of tax benefit of $1,638 in 2008 and $1,232 in 2007


3,042



2,099Pension and postretirement medical benefit plans:Net gain and net prior service cost, net of tax expense of $512
    in 2008 and $0 in 2007


949



Available-for-sale securities:Unrealized holding gains arising during the period, net of tax
    expense of $17,569 in 2008 and $3,577 in 2007


32,628



6,769Less reclassification adjustment for realized (gains) losses
    included in net income, net of tax (expense) benefit of ($3,793)
    in 2008 and $206 in 2007


(7,044
)


322Other comprehensive income

$
2,587


$
5,665Comprehensive income

$
77,850


$
45,318   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 13




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (Unaudited)
  2008


2007(in thousands)Balance at January 1

$
3,788,342


$
3,346,413Net income


75,263



39,653Contributions to capital surplus


366



277,261Issuance of common stock






12,114Stock option exercise


519



356Tax benefit from stock option exercise


720



1,445Dividends  ($0.52 in 2008 and $1.81 in 2007 per
    common share)


(8,000
)


(28,000
)Adjustment to initially apply FIN 48






1,922Other comprehensive income


2,587



5,665Balance at March 31

$
3,859,797


$
3,656,829   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 CASH FLOWS
 (Unaudited)
  Three Months EndedMarch 312008


2007(in thousands)Operating Activities:Net Income

$
75,263


$
39,653Adjustments to reconcile net income to net cash (used in)
    provided byoperating activities:Provision for loan losses


22,900



3,000Depreciation and amortization, including intangibles


18,667



7,079Deferred tax (benefit) expense


(9,104
)


12,843Tax benefit from stock options exercise


720



1,445Net securities (gains) losses


(10,837
)


528Equity securities gains, net


(39,796
)


Increase in bank-owned insurance


(10,673
)


(10,923
)Trading account net cash purchases


(262,405
)


(475,616
)Decrease in accrued interest receivable


24,758



15,641(Decrease) increase in accrued interest payable


(21,733
)


11,072Decrease in other accrued expenses


(49,695
)


(10,272
)Origination of loans held for sale


(118,484
)


(77,206
)Proceeds from sale of loans held for sale


94,293



78,735Net gains on loans held for sale


(1,292
)


(990
)Net losses on sale of premises and equipment


17



Recoveries on charged-off loans


14,660



5,488Net decrease in settlement clearing account


(78
)


(50,523
)Net change in pension and post retirement benefits


(3,588
)


(12,044
)Net decrease (increase) in marked to market hedging derivatives


46,961



(13,728
)Visa indemnification (note 5)


17,000



Other, net


23,202



(16,996
)Net cash used in operating activities

$
(189,244
)

$
(492,814
)Investing Activities:Proceeds from sales of securities available-for-sale

$
837,912


$
591,191Proceeds from maturities of securities available-for-sale


5,027,463



5,681,985Purchases of securities available-for-sale


(5,567,444
)


(5,969,908
)Net (increase) decrease in loans


(584,046
)


472,464Purchases of premises and equipment


(19,404
)


(13,026
)Sales of premises and equipment


7,296



Proceeds from Visa redemption


37,800



Acquisition, net of cash acquired






(222,852
)Net cash (used in) provided by investing activities

$
(260,423
)

$
539,854Financing Activities:Net decrease in deposits

$
(889,243
)

$
(1,688,997
)Net (decrease) increase in Federal funds purchase and securities
    sold under agreement to repurchase


(455,303
)


157,450Net (decrease) increase in other short-term borrowings


(157,929
)


648,305Proceeds from issuance short-term notes  senior


850,000



Proceeds from issuance long-term notes  secured


375,000



Net proceeds from stock options exercise


519



88Excess tax (expense) benefit from stock options exercise


(299
)


356Capital contributions for acquisitions


366



289,375Cash dividends paid on common stock


(8,000
)


Cash dividends paid on preferred stock


(4,609
)


Net cash used in financing activities

$
(289,498
)

$
(593,423
)Net decrease in cash and cash equivalents


(739,165
)


(546,383
)Cash and cash equivalents at January 1


3,649,120



2,701,835Cash and cash equivalents at March 31

$
2,909,955


$
2,155,452   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
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation          2.
    Legal
    Proceedings    3.
    Cash
    Flows      4.
    Restructuring
    Charge     16




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
        5.
    Visa
    Indemnification Charge          6.
    Fair
    Value Measurements  No. FAS 157-2, FSP 157-2
 17




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    7.
    Fair
    Value Option    8.
    Accounting
    for Endorsement Split-Dollar Life Insurance
    Arrangements  No. 06-04,
 18




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  FINANCIAL
    REVIEW
  First
    Quarter 2008 Compared with First Quarter 2007
  Summary
                 19




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##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk      Apr. 1, 2008 to


Year Ending December 31,








Fair Value atDec. 31, 2008


2009


2010


2011


2012


Thereafter


Total


March 31, 2008Available-for-sale securitiesMortgage-BackedBook Value

$
4,635



62,548



22,345



26,412







319,392


$
435,332


$
438,698Average Yield


4.00
%


4.14
%


4.13
%


4.00
%






4.85
%


4.32
%U.S. Treasury BillsBook Value

$
34,997






















$
34,997


$
34,997Average Yield


4.68
%






















4.68
%   Item 4T.
    Controls
    and Procedures  (a) Evaluation
    of Disclosure Controls and Procedures
    (b) Changed
    in Internal Control over Financial Reporting
   20




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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
 21




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##### Table of Contents



SIGNATURES    Paul
    R. Skubic
     Pamela
    C. Piarowski
    22