PNC to Retire $525 Million of Series S Preferred on Nov. 2

The PNC Financial Services Group said it will fully redeem $525 million of depositary shares representing its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock Series S at $1,000 per depositary share on November 2, 2026.

The PNC Financial Services Group (NYSE: PNC) is taking a full layer out of its preferred capital stack. The Pittsburgh-based bank said it will redeem all $525 million of the depositary shares representing its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series S, at a redemption price of $1,000 per depositary share, with the redemption set for November 2, 2026.

This is not a partial call or a tender at a discount. It is a full redemption at par, which is the cleanest possible way for a bank to retire a preferred series: holders get $1,000 per depositary share, the securities cease to be outstanding, and the associated dividend obligation disappears from the income statement from the redemption date forward.

What a fixed-to-floating perpetual preferred actually is

Each piece of that name matters for understanding why a bank would want this particular instrument gone.

• Preferred stock sits between debt and common equity. It pays a stated dividend and ranks ahead of common shares, but behind bondholders, if the issuer runs into trouble.
• Non-cumulative means a skipped dividend is not owed later. That feature is precisely why regulators allow qualifying preferred to count toward a bank's Additional Tier 1 capital: it can be switched off in stress without triggering a default.
• Perpetual means there is no maturity date. The only way the issuer retires it is by calling it, which is what PNC is now doing.
• Fixed-to-floating means the coupon starts at a fixed rate for an initial period and then resets to a floating rate tied to a benchmark. Once a series crosses into its floating leg, the cost to the issuer moves with short-term interest rates rather than staying locked at the level set on issue day.

That last feature is the key to reading a call like this one. Fixed-to-floating preferreds were a staple of large-bank capital raising in the years when short rates were near zero, and the floating spread looked cheap at the time. In a higher-rate world, the same structure can turn into an expensive piece of permanent capital, and issuers have an incentive to redeem it as soon as the call window allows.

The effect on PNC's preferred dividend expense

Preferred dividends are not an operating expense, but they reduce net income available to common shareholders, which is the number that feeds earnings per share. Removing $525 million of preferred at par takes the associated dividend stream off the books permanently. Whether that shows up as a net saving depends on what, if anything, PNC uses to replace the capital.

Banks generally have three options. They can leave the slot empty and absorb the small hit to Additional Tier 1 capital, assuming their regulatory ratios have enough headroom. They can refinance with a new preferred series at whatever rate the market demands today. Or they can lean on retained earnings and common equity to cover the gap. The company disclosed the redemption itself, as reported by GuruFocus; it has not, in this announcement, paired the call with a replacement issue.

For common shareholders, the read-through is mildly positive and mostly about signaling. A bank does not voluntarily retire half a billion dollars of loss-absorbing capital unless it is comfortable with where its capital ratios sit and with the trajectory of its balance sheet. Calling at par rather than negotiating a discount also says the securities are worth at least par to holders, which is typical for a preferred whose coupon has floated up.

What holders of the Series S shares should do

For anyone holding the depositary shares, the practical outcome is fixed: $1,000 per depositary share on November 2, 2026, and no security left to hold afterward. The instrument stops being a yield vehicle on that date, and the cash lands in the account with nothing attached to it.

That creates a reinvestment problem rather than a credit problem. Income investors who bought Series S for its floating coupon will be looking for a replacement in a market where the rate on offer today may not match what the called series was paying in its floating leg. Retiring perpetual preferreds at par has been a recurring feature of the bank capital market, and each redemption pushes a block of income capital back out looking for a home. Anyone holding through the call date should also confirm with their broker how the final dividend period is handled, since non-cumulative preferreds pay only when declared.

PNC shares in a soft session for bank-heavy indexes

PNC traded at $221.60 as of 14:46 GMT on September 29, 2026, down 0.93% from the prior close of $223.67, with an intraday range of $221.45 to $224.14. That leaves the stock near the low end of its day, and the move is larger than the broad market's.

The backdrop was mixed. The S&P 500, via SPY, was at $765.14, off 0.06% from $765.61. The Dow 30, via DIA, was weaker at $512.27, down 0.34%. The Nasdaq 100 proxy QQQ was the outlier on the upside at $739.43, up 0.39%. In other words, the day's leadership sat with large-cap technology while the more cyclical, financial-heavy end of the market lagged — and PNC underperformed even that.

None of that is a reaction to the redemption. A par call of a preferred series is a capital-structure housekeeping item, not an earnings event, and it rarely moves a bank's common stock in either direction. It matters for the composition of the balance sheet and for the line between net income and net income available to common shareholders, not for the day's tape.

What to watch between now and November 2

Three things are worth tracking. First, whether PNC announces a replacement preferred issue before the redemption date, and at what coupon — that is the cleanest available signal of what Additional Tier 1 capital now costs a large US regional bank. Second, whether the bank has other callable preferred series approaching their first call or reset dates, since issuers tend to work through such stacks in sequence rather than one at a time. Third, the bank's next capital disclosure, where the effect of removing $525 million of qualifying preferred on reported Tier 1 ratios will be visible.

The wider pattern is the one to keep in view: preferred securities issued in a low-rate era are rolling into floating coupons that are no longer cheap, and issuers with capital headroom are choosing to take them out at par. PNC's Series S is one more instance of that repricing working its way through bank balance sheets.

Key facts

• Amount redeemed: $525 million of Series S depositary shares, full redemption
• Redemption price and date: $1,000 per depositary share on November 2, 2026
• PNC share price: $221.60, -0.93%, as of 14:46 GMT Sept. 29, 2026
• Security type: Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series S

Frequently asked questions

What exactly is PNC redeeming?

PNC is redeeming all of the depositary shares representing its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series S — $525 million in total. It is a full redemption, not a partial call, and the redemption price is $1,000 per depositary share. The redemption date is November 2, 2026.

What will Series S holders receive?

Holders will receive $1,000 per depositary share on November 2, 2026. After that date the securities are no longer outstanding and stop paying dividends. Holders should confirm with their broker how the final dividend period is treated, since non-cumulative preferred stock pays only when the dividend is declared.

Why would a bank call a perpetual preferred?

Perpetual preferreds have no maturity, so redemption is the only way to retire them. Fixed-to-floating structures reset from a fixed coupon to a floating rate tied to a benchmark, which can make them expensive once short-term rates rise. Issuers with sufficient regulatory capital headroom often call such series at par.

Does this affect PNC's earnings per share?

Preferred dividends reduce net income available to common shareholders, the figure used for earnings per share. Retiring the Series S removes that dividend stream permanently. Whether it becomes a net benefit depends on whether PNC replaces the capital with a new preferred issue and at what cost; no replacement was announced with the redemption.

What is Additional Tier 1 capital?

Additional Tier 1 is a regulatory capital layer sitting above common equity Tier 1 in the loss-absorbing hierarchy. Non-cumulative perpetual preferred stock typically qualifies because dividends can be suspended without triggering default. Removing $525 million of qualifying preferred reduces that layer, which a bank would only do with adequate ratio headroom.

How did PNC stock trade on the day of the announcement?

PNC traded at $221.60 as of 14:46 GMT on September 29, 2026, down 0.93% from the prior close of $223.67, with a day range of $221.45 to $224.14. The S&P 500 proxy SPY was down 0.06% and the Dow proxy DIA down 0.34%, while the Nasdaq 100 proxy QQQ rose 0.39%.

Sources

• PNC Financial to Redeem $525 Million in Series S Depositary Shares on November 2, 2026 — GuruFocus

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