When you're researching Bank of America alternatives, the real work isn't just finding other big banks. It's identifying companies with comparable business models, similar scale, and then digging into where they actually differ on profitability, deposit base, and valuation. That comparison is where the useful insights live, and it's how you build a more informed view of the large-cap banking sector.
Key takeaways
- The closest BAC competitors by business model and market cap include JPMorgan Chase, Wells Fargo, Citigroup, and U.S. Bancorp, each with distinct strengths and trade-offs.
- Comparing alternatives means looking beyond size and into metrics like return on equity, net interest margin, deposit growth trends, and price-to-book ratios.
- No single peer matches Bank of America on every dimension. The most useful comparison picks two or three metrics that matter to your thesis and benchmarks across the group.
- Diversified banking giants and regional-focused institutions serve different roles in a portfolio, even when they appear similar on the surface.
- You can run side-by-side comparisons of any of these banks using AI-powered research tools to speed up the process.
Why look for alternatives to Bank of America?
There are a few reasons you might search for stocks like BAC. Maybe you already hold Bank of America and want to diversify within financials without doubling your exposure to the same risk profile. Maybe you think BAC is fully valued and want a peer trading at a discount. Or maybe you're just starting your research and want to understand where BAC fits relative to its closest competitors.
Whatever the reason, the process is the same: identify peers, pick the right comparison dimensions, and look for meaningful differences rather than surface-level similarities.
Which banks are the closest BAC competitors?
Bank of America operates as a diversified financial institution with major business lines in consumer banking, wealth management, global banking, and global markets. That combination of retail deposits, investment banking, and trading revenue narrows the peer group considerably. Here are the names that show up most often in a side-by-side comparison:
- JPMorgan Chase (JPM) — The largest U.S. bank by assets. Similar diversified model with even larger investment banking and trading operations. Often trades at a premium to BAC on price-to-book.
- Wells Fargo (WFC) — Heavy consumer and commercial banking focus with a smaller capital markets footprint. Historically compared to BAC on deposit base and net interest income.
- Citigroup (C) — More globally oriented than BAC, with significant international consumer and institutional banking operations. Often trades at a discount to book value, which raises different valuation questions.
- U.S. Bancorp (USB) — Smaller in market cap but runs a well-regarded consumer and commercial banking operation. Useful as a comparison for investors exploring whether a more focused bank offers better risk-adjusted returns.
- PNC Financial (PNC) — Regional-to-national footprint with strong presence in the eastern U.S. Less complex than BAC, which some investors view as an advantage.
You can pull up detailed financial profiles for Bank of America and each of these peers on the BAC stock research page to start your own comparison.
How to compare Bank of America alternatives on profitability
Profitability is where the real differences emerge among large-cap banks. Two metrics matter most here:
Return on Equity (ROE): Measures how much profit a bank generates relative to shareholder equity. Higher ROE generally signals more efficient use of capital, though it can also reflect higher leverage.
Net Interest Margin (NIM): The difference between what a bank earns on loans and what it pays on deposits, expressed as a percentage of interest-earning assets. NIM is the core earnings engine for traditional banks.
Among the major BAC competitors, JPMorgan Chase has historically posted the highest ROE of the group, driven by its dominant trading and investment banking divisions. Wells Fargo tends to compete closely with BAC on NIM because both rely heavily on consumer deposit franchises. Citigroup's ROE has typically lagged peers, partly due to restructuring costs and its international complexity.
Here's the thing about profitability comparisons: a single quarter's numbers can be misleading. Look at three-to-five-year average ROE and NIM trends instead. A bank that consistently posts mid-teens ROE is telling you something different than one that bounces between 8% and 14%.
What about deposit growth and funding stability?
Deposits are a bank's cheapest funding source, so deposit growth trends reveal a lot about competitive positioning. Banks with sticky, low-cost deposit bases tend to hold up better when interest rates shift because they don't have to pay up as aggressively to retain customers.
Bank of America has one of the largest consumer deposit franchises in the U.S., which gives it meaningful funding cost advantages. When evaluating alternatives to Bank of America, pay attention to:
- Total deposit base size — Larger deposit bases generally mean lower funding costs and more stability.
- Deposit mix — What percentage is non-interest-bearing versus interest-bearing? A higher share of non-interest-bearing deposits is a competitive edge in rising-rate environments.
- Deposit growth rate — Are deposits growing organically, or is the bank relying on promotional rates to attract balances?
- Loan-to-deposit ratio — A ratio well below 100% suggests the bank has room to grow lending without straining its funding base.
JPMorgan and Wells Fargo are the most comparable to BAC on deposit scale. U.S. Bancorp and PNC are meaningfully smaller but have historically grown deposits at competitive rates relative to their size. Citigroup's deposit profile looks different because a significant chunk is institutional and international, which tends to be more rate-sensitive.
Comparing valuation across stocks like BAC
Valuation is where investor opinions diverge the most. Two banks can have nearly identical business models and dramatically different price-to-book or price-to-earnings multiples. That gap is usually the market pricing in differences in growth expectations, management quality, or risk.
Price-to-Book (P/B) Ratio: Compares a bank's stock price to its book value per share. Banks trading below 1.0x book are priced below the accounting value of their net assets, which can signal either an opportunity or a structural problem.
Among the peer group, JPMorgan typically commands the highest P/B ratio, often well above 1.5x. The market rewards JPM for its diversified earnings streams and consistent execution. BAC usually trades somewhere in the middle of the pack. Citigroup has historically traded at or below book value, which attracts value-oriented investors but also reflects the market's skepticism about its turnaround timeline.
A useful exercise: line up P/B ratios alongside ROE for each peer. Banks that earn higher returns on equity deserve higher price-to-book multiples. If you find a bank with strong ROE but a low P/B, that's worth investigating further. If the multiple is low for a reason (regulatory issues, asset quality concerns, management uncertainty), it may not be a bargain at all.
You can screen for banks across these metrics using the Rallies Vibe Screener, which lets you filter by financial characteristics rather than just sector labels.
What separates diversified banks from focused competitors?
One important distinction when evaluating Bank of America alternatives is the difference between diversified and focused banking models. BAC, JPM, and Citigroup all operate across consumer banking, wealth management, investment banking, and trading. That diversification smooths earnings across cycles but adds complexity.
Wells Fargo, U.S. Bancorp, and PNC lean more heavily toward traditional consumer and commercial banking. Their revenue mix is simpler and more rate-sensitive. In periods when net interest income is expanding (like when rates are rising and deposit costs lag), these focused banks can outperform. When rate conditions compress, their earnings tend to feel more pressure than diversified peers with large fee-based revenue streams.
Neither model is inherently better. It depends on what you're looking for. If you want more earnings stability across different macro environments, the diversified names may fit. If you prefer a more straightforward bet on net interest income growth, the focused banks offer cleaner exposure.
Building a comparison framework that actually works
Rather than trying to compare every metric at once, pick a framework. Here's a practical approach some investors use when evaluating BAC competitors:
- Define your thesis. Are you looking for value, income, growth, or stability? Your answer changes which metrics matter most.
- Select three to five comparison dimensions. For example: ROE, NIM, P/B ratio, dividend yield, and deposit growth.
- Gather data for the peer group. Pull the same metrics for BAC and four to five alternatives so you have a consistent basis for comparison.
- Look for outliers. A bank that's much cheaper or much more profitable than peers deserves deeper research to understand why.
- Pressure-test your assumptions. Ask what could go wrong. A cheap stock might be cheap because the market sees risks you haven't considered yet.
The Rallies AI Research Assistant can help you run through this kind of structured comparison quickly. You describe what you're looking for in plain language, and it pulls together the relevant data and context.
Try it yourself
Want to run this kind of analysis on your own? Copy any of these prompts and paste them into the Rallies AI Research Assistant:
- I'm looking for alternatives to Bank of America — which other large banks have similar business models and market caps, and how do they compare on metrics like profitability, deposit growth, and valuation?
- What are the closest alternatives to Bank of America? What competitors should I compare it to?
- Compare JPMorgan, Wells Fargo, Citigroup, and U.S. Bancorp on ROE, net interest margin, and price-to-book ratio. Which ones look most similar to Bank of America?
Frequently asked questions
What are the best stocks like BAC to research?
JPMorgan Chase, Wells Fargo, Citigroup, U.S. Bancorp, and PNC Financial are the most commonly compared peers. Each shares some business model overlap with Bank of America but differs in scale, geographic focus, or revenue mix. The "best" comparison depends on which aspect of BAC's business you're most interested in.
What makes a bank a true alternative to Bank of America?
A true alternative has a similar core business model, meaning it generates revenue from a mix of consumer deposits, lending, and potentially investment banking or wealth management. Size matters too. Comparing BAC to a small community bank doesn't yield useful insights because the risk profiles and competitive dynamics are too different.
How do BAC competitors compare on dividend yield?
Large-cap bank dividend yields typically cluster in a relatively narrow range, but there can be meaningful differences in payout ratios and dividend growth rates. A bank with a lower yield but faster dividend growth may deliver more total income over time than a higher-yield peer with flat payouts. Check payout ratios against earnings to gauge sustainability.
Is Citigroup a good alternative to Bank of America?
Citigroup shares some structural similarities with BAC, particularly in investment banking and global reach. However, its international consumer banking operations and ongoing restructuring efforts make it a different risk profile. Citigroup has historically traded at a lower valuation, which can appeal to value-focused investors willing to accept the complexity.
Should I look at regional banks as alternatives to Bank of America?
Regional banks like U.S. Bancorp and PNC can work as alternatives if you're specifically interested in the consumer and commercial lending side of BAC's business. They won't replicate the investment banking or global markets exposure, but they often run at higher efficiency ratios and can offer different risk-return characteristics.
What metrics matter most when comparing large bank stocks?
For large banks, focus on return on equity, net interest margin, price-to-book ratio, credit quality metrics (like the allowance for loan losses), and deposit trends. These give you a clearer picture of profitability, valuation, and risk than top-line revenue or earnings alone. The thematic portfolio collections on Rallies can also help you explore banks grouped by shared characteristics.
How often should I revisit my bank stock comparisons?
A quarterly check after earnings reports is a reasonable cadence. Bank fundamentals shift with interest rate cycles, credit quality trends, and regulatory developments. You don't need to monitor daily, but a stale comparison built on outdated assumptions can lead you to hold positions that no longer match your original thesis.
Bottom line
Researching Bank of America alternatives is really about understanding the large-cap banking landscape and where each player's strengths and weaknesses sit relative to BAC. JPMorgan, Wells Fargo, Citigroup, U.S. Bancorp, and PNC are the most relevant peers, but the right comparison framework depends on what you're trying to learn or decide.
Pick the metrics that match your investment approach, compare consistently across the peer group, and revisit your analysis as fundamentals evolve. For more on how to evaluate and compare individual stocks, explore the stock analysis guides on Rallies.ai.
Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other type of advice. Rallies.ai does not recommend that any security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. Before making any investment decision, consult with a qualified financial advisor and conduct your own research.
Written by Gav Blaxberg, CEO of WOLF Financial and Co-Founder of Rallies.ai.