##### 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, 2011
  Commission file number
    1-13805
  Harris Preferred Capital
    Corporation
    Maryland

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

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

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

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

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




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##### 





HARRIS
    PREFERRED CAPITAL CORPORATION
  TABLE OF
    CONTENTS
   
 Part I

FINANCIAL INFORMATIONItem 1.

Financial Statements:Consolidated Balance Sheets


2Consolidated Statements of Income and
    Comprehensive Income


3Consolidated Statements of Changes in
    Stockholders Equity


4Consolidated Statements of Cash Flows


5Notes to Consolidated Financial Statements


6Item 2.

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


10Item 3.

Quantitative and Qualitative Disclosures about
    Market Risk


24Item 4T.

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 312011


2010


2010(unaudited)


(audited)


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

$
1,294


$
525


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


12,000



23,500



12,000Total cash and cash equivalents

$
13,294


$
24,025


$
12,662Notes receivable from Harris N.A.


3,334



3,369



3,534Securities
    available-for-sale,
    at fair valueMortgage-backed


494,749



516,911



494,642U.S. Treasury Bills


79,999



40,000



74,991Other assets


1,625



1,781



1,786Total assets

$
593,001


$
586,086


$
587,615Liabilities and Stockholders EquityAccrued expenses

$
102


$
114


$
159Accrued taxes payable and deferred tax liabilities


1,643



1,144



1,601Payable for security purchased


9,736







Total liabilities

$
11,481


$
1,258


$
1,760Stockholders 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 in excess of (less than) distributions


2,112



(255
)


(431
)Accumulated other comprehensive income  net
    unrealized gains on
    available-for-sale
    securities


8,674



14,349



15,552Total stockholders equity

$
581,520


$
584,828


$
585,855Total liabilities and stockholders equity

$
593,001


$
586,086


$
587,615   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
 (Unaudited)
  Three Months Ended March 31,2011


2010(in thousands)Interest income:Securities purchased from Harris N.A. under agreement to resell

$
22


$
11Notes receivable from Harris N.A.


53



57Securities
    available-for-sale:Mortgage-backed


4,670



5,281U.S. Treasury Bills


1



1Total interest income

$
4,746


$
5,350Noninterest income:Gain on sale of securities

$
3,115


$
Total income

$
7,861


$
5,350Operating expenses:Loan servicing fees paid to Harris N.A.

$
3


$
3Advisory fees paid to Harris N.A.


31



62General and administrative


121



130Total operating expenses

$
155


$
195Income before income taxes

$
7,706


$
5,155Applicable state income taxes


732



376Net Income

$
6,974


$
4,779Preferred stock dividends


4,609



4,609Net income available to common stockholder

$
2,365


$
170Basic and diluted earnings per common share

$
2,004


$
144Net income

$
6,974


$
4,779Other comprehensive income:Available-for-sale
    securities:Unrealized holding (losses)/gains arising during the period, net
    of deferred state taxes


(8,492
)


3,195Less reclassification adjustment for realized gains included in
    net income


2,819



Comprehensive income

$
1,301


$
7,974   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)
  Three Months EndedMarch 312011


2010(in thousands)Balance at January 1

$
584,828


$
582,490Net income


6,974



4,779Other comprehensive income


(5,673
)


3,195Dividends (preferred stock $0.46094 per share)


(4,609
)


(4,609
)Balance at March 31

$
581,520


$
585,855   The accompanying notes are an integral part of these
    financial statements.
 4




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Unaudited)
  Three Months Ended March 31,2011


2010(in thousands)Operating Activities:Net income

$
6,974


$
4,779Adjustments to reconcile net income to net cash provided by
    operating activities:Gain on sale of securities


(3,115
)


Decrease in other assets


156



99Decrease in accrued expenses


(12
)


42Increase in accrued taxes payable and deferred taxes


499



382Increase in payable for security purchased


9,736



Net cash provided by operating activities

$
14,238


$
5,302Investing Activities:Repayments of notes receivable from Harris N.A.

$
35


$
50Purchases of securities
    available-for-sale


(138,567
)


(82,617
)Proceeds from maturities/redemptions of securities
    available-for-sale


78,492



71,620Proceeds from sales of securities
    available-for-sale


39,680



Net cash used in investing activities

$
(20,360
)

$
(10,947
)Financing Activities:Cash dividends paid on preferred stock

$
(4,609
)

$
(4,609
)Net cash used in financing activities

$
(4,609
)

$
(4,609
)Net decrease in cash and cash equivalents with Harris N.A.

$
(10,731
)

$
(10,254
)Cash and cash equivalents with Harris N.A. at beginning of period


24,025



22,916Cash and cash equivalents with Harris N.A. at end of period

$
13,294


$
12,662   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, 2011Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


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

$
485,165


$
11,960


$
2,376


$
494,749U.S. Treasury Bills


79,999











79,999Total Securities

$
565,164


$
11,960


$
2,376


$
574,748   December 31, 2010Amortized


Unrealized


Unrealized


FairCost


Gains


Losses


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

$
501,435


$
17,439


$
1,963


$
516,911U.S. Treasury Bills


40,000











40,000Total Securities

$
541,435


$
17,439


$
1,963


$
556,911  6




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  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   available-for-sale. Available-for-sale available-for-sale
  other-than-temporary
  other-than-temporarily
  March 31, 2011Length 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

$
129,124


$
2,376


$



$



$
129,124


$
2,376Total

$
129,124


$
2,376


$



$



$
129,124


$
2,376   7




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
  December 31, 2010Length 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

$
79,133


$
1,963


$



$



$
79,133


$
1,963Total

$
79,133


$
1,963


$



$



$
79,133


$
1,963   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   available-for-sale
  March 31, 2011Amortized


FairCost


Value(in thousands)Maturities:Within 1 year

$
84,970


$
84,9991 to 5 years


11,345



11,7005 to 10 years


105,237



111,718Over 10 years


363,612



366,331Total

$
565,164


$
574,748   4.
    Fair
    Value Measurements     8




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
        Fair Value


Fair Value Measurements UsingMarch 31, 2011


Level 1


Level 2


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

$
494,749


$



$
494,749


$
U.S. Treasury


79,999



79,999







$
574,748


$
79,999


$
494,749


$
   Fair Value


Fair Value Measurements UsingDecember 31, 2010


Level 1


Level 2


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

$
516,911


$



$
516,911


$
U.S. Treasury


40,000



40,000







$
556,911


$
40,000


$
516,911


$
   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


74,991



74,991







$
569,633


$
74,991


$
494,642


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




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##### Table of Contents



HARRIS
    PREFERRED CAPITAL CORPORATION
    March 31, 2011


December 31, 2010


March 31, 2010Carrying


Fair


Carrying


Fair


Carrying


FairValue


Value


Value


Value


Value


Value(in thousands)


(in thousands)


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

$
1,294


$
1,294


$
525


$
525


$
662


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


12,000



12,000



23,500



23,500



12,000



12,000Notes receivable from Harris N.A.


3,334



4,555



3,369



4,758



3,534



4,743Securities
    available-for-sale


574,748



574,748



556,911



556,911



569,633



569,633Other assets


1,625



1,625



1,781



1,781



1,786



1,786Total on-balance-sheet financial assets

$
593,001


$
594,222


$
586,086


$
587,475


$
587,615


$
588,824   6.
    Operating
    Segment    Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Information
  Form 10-Q Form 10-K Form S-11 No. 333-40257),
  Results
    of Operations
  First
    Quarter 2011 Compared with First Quarter 2010
     10




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HARRIS
    PREFERRED CAPITAL CORPORATION
  available-for-sale
            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
    Tax
    Matters
    Financial
    Statements of Harris N.A.
   12




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  FINANCIAL
    REVIEW
  First
    Quarter 2011 Compared with First Quarter 2010
  Summary
    available-for-sale, available-for-sale
         13




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14




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##### Table of Contents



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


December 31


March 312011


2010


2010(unaudited)


(audited)


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

$
686,207


$
734,907


$
698,079Money market assets:Interest-bearing deposits at banks ($15.1 billion,
    $14.1 billion and $9.9 billion held at Federal Reserve
    Bank at March 31, 2011, December 31, 2010 and
    March 31, 2010, respectively)


15,853,196



15,014,090



10,469,146Federal funds sold and securities purchased under agreement to
    resell


1,716,650



1,255,313



350,293Total cash and cash equivalents

$
18,256,053


$
17,004,310


$
11,517,518Securities
    available-for-sale
    at fair value


5,769,087



5,674,981



5,127,868Trading account assets and derivative instruments


383,949



1,161,940



1,367,868Loans, net of unearned income


21,736,418



22,372,665



22,104,790Allowance for loan losses


(716,534
)


(706,101
)


(693,686
)Net loans

$
21,019,884


$
21,666,564


$
21,411,104Loans held for sale


9,266



29,915



30,736Premises and equipment, net


543,339



547,567



523,208Bank-owned insurance


1,382,144



1,373,099



1,348,093Goodwill and other intangible assets, net


886,780



894,074



807,132Other assets


1,635,970



1,673,910



1,262,265Total assets

$
49,886,472


$
50,026,360


$
43,395,792LIABILITIESDeposits in domestic offices  noninterest-bearing

$
8,975,717


$
9,204,496


$
9,590,125 interest-bearing (includes $1.6 billion, $1.3 billion and $0.9 billion measured at fair value at March 31, 2011, December 31, 2010 and March 31, 2010, repectively)


23,854,936



23,021,378



19,559,425Deposits in foreign offices     
    noninterest-bearing


2,424,265



2,718,059



 interest-bearing


1,656,059



1,518,884



1,384,778Total deposits

$
36,910,977


$
36,462,817


$
30,534,328Federal funds purchased


226,950



194,251



227,184Securities sold under agreement to repurchase


442,509



864,918



2,176,265Short-term borrowings


1,274,417



1,427,794



384,921Accrued interest, taxes and other


166,087



197,434



145,168Accrued pension and post-retirement


28,332



26,753



23,777Other liabilities


647,806



648,413



578,241Long-term notes  senior/unsecured


2,396,500



2,396,500



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


2,375,000



2,375,000



2,375,000Long-term notes  subordinated


200,000



200,000



200,000Total liabilities

$
44,668,578


$
44,793,880


$
39,041,384STOCKHOLDERS EQUITYCommon stock ($10 par value); authorized
    40,000,000 shares; issued and outstanding
    19,989,512 shares at March 31, 2011 and
    December 31, 2010 and 17,767,512 at March 31, 2010

$
199,895


$
199,895


$
177,675Surplus


3,297,515



3,297,290



2,413,757Retained earnings


1,594,851



1,621,829



1,630,329Accumulated other comprehensive loss


(124,367
)


(136,534
)


(117,353
)Stockholders equity before noncontrolling
    interest  preferred stock of subsidiary

$
4,967,894


$
4,982,480


$
4,104,408Noncontrolling interest  preferred stock of subsidiary


250,000



250,000



250,000Total stockholders equity

$
5,217,894


$
5,232,480


$
4,354,408Total liabilities and stockholders equity

$
49,886,472


$
50,026,360


$
43,395,792   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 OPERATIONS
 (Unaudited)
  Three Months EndedMarch 312011


2010(In thousands)Interest IncomeLoans

$
240,008


$
255,058Money market assets:Deposits at banks


9,964



5,784Federal funds sold and securities purchased under agreements to
    resell


143



62Trading account assets


1,652



2,950Securities
    available-for-sale:U.S. Treasury and federal agency


10,174



15,998State and municipal


11,684



12,421Other


2,642



1,468Total interest income

$
276,267


$
293,741Interest ExpenseDeposits

$
41,474


$
42,769Short-term borrowings


951



1,752Long-term notes  senior/unsecured


23,143



22,479Long-term notes  senior/secured


6,431



12,240Long-term notes  subordinated


331



467Total interest expense

$
72,330


$
79,707Net Interest Income

$
203,937


$
214,034Provision for loan losses


67,545



91,727Net Interest Income after Provision for Loan Losses

$
136,392


$
122,307Noninterest IncomeTrust and investment management fees

$
24,144


$
20,562Net money market and bond trading income, including derivative
    activity


5,108



13,857Foreign exchange trading gains, net


1,099



2,913Service charges and fees


44,234



46,910Charge card income


26,186



29,294Equity securities gains, net


1,502



2,175Net securities gains, other than trading


4,314



1,674Other-than-temporary
    impairment of securities


(505
)


(21
)Bank-owned insurance


10,693



11,900Letter of credit fees


4,993



5,386Net gains on loans held for sale


8,594



4,095Other


1,952



10,700Total noninterest income

$
132,314


$
149,445Noninterest ExpensesSalaries and other compensation

$
107,536


$
94,010Pension and other employee benefits


36,844



29,739Net occupancy


26,204



24,969Equipment


17,360



20,048Marketing


14,914



11,891Communication and delivery


9,062



7,372Professional fees


28,130



21,126Outside information processing, database and network fees


12,820



8,505FDIC insurance


11,508



11,234Intercompany services, net


(2,268
)


(2,948
)Visa indemnification reversal


(2,200
)


Charge card expense


6,362



7,305Provision for off-balance sheet credit losses


10,796



85Amortization of intangibles


7,445



5,688Other


33,059



23,668Total noninterest expenses

$
317,572


$
262,692(Loss) income before income tax benefit

$
(48,866
)

$
9,060Applicable income tax benefit


(26,497
)


(4,159
)Net (loss) income

$
(22,369
)

$
13,219Less: noncontrolling interest  dividends on preferred
    stock of subsidiary


4,609



4,609Net (Loss) Income Available for Common Stockholder

$
(26,978
)

$
8,610   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 16




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
 (Unaudited)
  Three Months EndedMarch 312011


2010(In thousands)Net (loss) income

$
(22,369
)

$
13,219Other comprehensive income (loss):Cash flow hedges:Net unrealized gain (loss) on derivative instruments, net of tax
    expense (benefit) of $5,488 in 2011 and ($10,213) in 2010


10,192



(18,966
)Reclassification adjustment for realized loss included in net
    (loss) income, net of tax benefit of $546 in 2011 and $390 in
    2010


1,014



723Pension and postretirement medical benefit plans:Net gain and net prior service cost, net of tax expense of $0 in
    2011 and $1,318 in 2010






4,893Amortization included in net periodic benefit cost, net of tax
    benefit of $1,310 in 2011 and $663 in 2010


2,434



1,231Securities
    available-for-sale:Unrealized holding gains (losses) arising during the period, net
    of tax expense (benefit) of $2,524 in 2011 and ($4,904) in 2010


1,866



(6,362
)Reclassification adjustment for realized gains included in net
    (loss) income, net of tax expense of $470 in 2011 and $586 in
    2010


(3,339
)


(1,088
)Other comprehensive income (loss)

$
12,167


$
(19,569
)Comprehensive loss

$
(10,202
)

$
(6,350
)Comprehensive income related to noncontrolling interest


4,609



4,609Comprehensive loss available for common stockholder

$
(14,811
)

$
(10,959
)   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 17




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##### Table of Contents



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


NoncontrollingOther


Interest 


TotalCommon





Retained


Comprehensive


Preferred Stock


StockholdersStock


Surplus


Earnings


Loss


of Subsidiary


Equity(In thousands)Balance at December 31, 2010

$
199,895


$
3,297,290


$
1,621,829


$
(136,534
)

$
250,000


$
5,232,480Stock option exercise






225















225Net (loss) income










(26,978
)






4,609



(22,369
)Dividends  preferred stock of subsidiary


















(4,609
)


(4,609
)Other comprehensive income














12,167







12,167Balance at March 31, 2011

$
199,895


$
3,297,515


$
1,594,851


$
(124,367
)

$
250,000


$
5,217,894Balance 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


$
4,354,408   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 18




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Unaudited)
  Three Months EndedMarch 312011


2010(In thousands)Cash Flows from Operating Activities:Net (loss) income

$
(22,369
)

$
13,219Less: noncontrolling interest  dividends on preferred
    stock of subsidiary


4,609



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

$
(26,978
)

$
8,610Adjustments to determine net cash flows provided by (used in)
    operating activities:Provision for loan losses


67,545



91,727Depreciation and amortization, including intangibles


31,583



25,907Deferred tax (benefit) expense


(12,762
)


63,340Tax expense from stock options exercise


79



59Other-than-temporary
    impairment on securities


505



21Net gains on securities, other than trading


(4,314
)


(1,674
)Net equity investment gains


(1,502
)


(2,175
)Increase in bank-owned insurance


(9,045
)


(8,436
)Net decrease (increase) in trading securities


774,507



(21,374
)(Increase) decrease in accrued interest receivable


(3,568
)


2,015Decrease (increase) in prepaid expenses


11,559



(97,129
)Decrease in accrued interest payable


(1,468
)


(4,437
)Net decrease (increase) in accrued tax receivable


30,861



(65,210
)Decrease in other accrued expenses


(66,674
)


(51,373
)Net change in pension and post retirement benefits


5,323



(26,511
)Origination of loans held for sale


(259,247
)


(198,396
)Proceeds from sale of loans held for sale


288,490



201,729Net gains on loans held for sale


(8,594
)


(4,095
)Net gains on sale of premises and equipment


(101
)


(782
)Net (decrease) increase in marked to market hedging derivatives


(17,055
)


23,076Visa indemnification reversal


(2,200
)


Other, net


89,394



(16,249
)Net cash provided by (used in) operating activities

$
886,338


$
(81,357
)Cash Flows from Investing Activities:Proceeds from sales of securities
    available-for-sale

$
56,603


$
338,525Proceeds from maturities of securities
    available-for-sale


1,239,288



1,414,986Purchases of securities
    available-for-sale


(1,392,109
)


(1,000,715
)Net decrease in loans


573,176



992,104Net proceeds from FDIC loss sharing agreement


204



Purchases of premises and equipment


(13,598
)


(16,690
)Proceeds from sales of premises and equipment


1,231



1,670Net cash provided by investing activities

$
464,795


$
1,729,880Cash flows from Financing Activities:Net increase in deposits

$
117,288


$
76,285Net increase in deposits measured at fair value


330,872



162,802Net decrease in Federal funds purchased and securities sold
    under agreement to repurchase


(389,710
)


(345,140
)Net decrease in other short-term borrowings


(153,377
)


(332,129
)Repayment of long-term notes  subordinated






(92,750
)Net proceeds from stock options exercise


225



170Excess tax expense from stock options exercise


(79
)


(59
)Capital contributions from parent






93,000Cash dividends paid on preferred stock


(4,609
)


(4,609
)Net cash used in financing activities

$
(99,390
)

$
(442,430
)Net increase in cash and cash equivalents

$
1,251,743


$
1,206,093Cash and cash equivalents at January 1


17,004,310



10,311,425Cash and cash equivalents at March 31

$
18,256,053


$
11,517,518   The accompanying notes to consolidated financial statements
    are an integral part of these statements.
 19




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation        travel-and-entertainment
   20




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    2.
    Contingent
    Liabilities and Litigation    3.
    Cash
    Flows    4.
    Visa
    Indemnification Charge          5.
    Health
    Care Legislation   21




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    6.
    Noncontrolling
    Interests  810-10-65
  7.
    FDIC
    Special Assessment    8.
    Other-than-temporary
    impairment  other-than-temporary other-than-temporary other-than-temporary
  9.
    Recent
    accounting standards  2010-06, ASC 820-10 2010-06
  2010-20, ASC 310-10-50,
 22




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##### Table of Contents



HARRIS
    N.A. AND SUBSIDIARIES
    2011-02,
 23




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##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    available-for-sale
  Apr. 1, 2011 to

Year Ending December 31,





Fair Value atDec. 31, 2011

2012

2013

2014

2015

Thereafter

Total

March 31, 2011Residential mortgage-backedAmortized cost

$
4,972


$



$
6,282


$
3,550


$
1,513


$
468,848


$
485,165


$
494,749Average Yield


4.00%







4.00%



4.00%



4.00%



4.02%



4.02%U.S. Treasury BillsAmortized cost

$
79,999


$



$



$



$



$



$
79,999


$
79,999Average Yield


0.01%























0.01%   sub-prime
 24




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##### Table of Contents



Item 4T.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures    (b)
    Changes
    in Internal Controls 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.
  None
  Item 6.
    Exhibits  31.1  Certification of Pamela C. Piarowski pursuant
    to
    rule 13a-14(a)
  31.2  Certification of Paul R. Skubic pursuant to
    rule 13a-14(a)
  32.1  Certification pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes- Oxley Act of 2002
 26




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##### Table of Contents



SIGNATURES
     Paul
    R. Skubic
      Pamela
    C. Piarowski
    27