Skip the Regional Bank Disappointment: Why Bank of America Deserves Your Attention Over Truist Financial

The Merger That Didn’t Deliver

Back in 2019, when BB&T and SunTrust announced their union to create Truist Financial (NYSE: TFC), the investment thesis looked compelling. Two robust regional institutions, each holding roughly $200-230 billion in assets, joining forces to achieve operational excellence and market dominance. The newly branded Truist promised an efficiency ratio of 51% and a return on tangible common equity (ROTCE) of 22%.

Yet here we are, over six years later, and the reality has been anything but stellar. Truist’s latest performance reveals an efficiency ratio of 55.7% and ROTCE standing at just 13.6%—a significant shortfall from initial promises. Shareholders have voted with their feet, with the stock delivering a mere 7% return over the past five years. The culprits? Technology integration headaches, customer backlash from system glitches, and cultural clashes that proved far more challenging to reconcile than management anticipated.

Why Bank Mergers Are Trickier Than They Appear

The banking sector’s love affair with mergers often masks the genuine operational complexities involved. When two institutions combine, the acquiring bank must typically destroy tangible book value (TBV) upfront to complete the deal, then spend years clawing back that value through superior earnings growth.

Beyond financial engineering, there’s the human element: merging legacy technology platforms, aligning two distinct corporate cultures, and realizing promised revenue synergies rarely go according to plan. Regulatory scrutiny adds another layer of uncertainty. Truist learned this lesson the hard way, burning through resources on tech integration and facing customer satisfaction issues that undermined its competitive positioning.

A Clearer Path Forward: Bank of America as One of the Best Bank Stocks to Buy

If you’re hunting for best bank stocks to buy with genuine staying power, consider Bank of America (NYSE: BAC) instead. As the nation’s second-largest bank, it commands one of the strongest retail deposit franchises and operates a sprawling ecosystem of services—commercial lending, credit card operations, investment banking, wealth management, and payments infrastructure—all functioning at scale.

The numbers tell a compelling story. Bank of America generated a ROTCE exceeding 15.4% in its most recent quarter, demonstrating healthy profitability relative to shareholder equity. Yes, it trades at a premium to Truist on a price-to-tangible book basis, but that premium reflects genuine operational excellence—something Truist has yet to prove it can deliver.

The Inflation Misstep and Path to Recovery

Bank of America did stumble when purchasing oversized positions in low-yielding, long-duration bonds during the pandemic’s early days, when rates hovered near zero. Management, like many peers, underestimated inflation’s persistence and the magnitude of Federal Reserve tightening that would follow. Those positions have since declined sharply in value.

However, this creates an opportunity. As those underwater bonds mature, Bank of America can redeploy capital into higher-yielding assets, effectively rebuilding tangible book value while boosting net interest margins. Combined with anticipated regulatory relief—potentially lower capital requirements freeing up more lending capacity—the bank is positioned for earnings expansion ahead.

The Investment Case for Best Bank Stocks to Buy in Today’s Environment

Bank of America sweetens the pitch with a solid 2% dividend yield, providing current income while you wait for operational tailwinds to materialize. The stock trades at a discount to JPMorgan Chase, which itself suggests room for multiple expansion as execution improves.

For investors seeking exposure to the banking sector, which is widely expected to perform well in the coming year, Bank of America offers a safer, more proven operational model than Truist Financial. It’s a best bank stocks to buy candidate that has demonstrated it can deliver on promises, unlike the disappointing track record we’ve witnessed from Truist’s merger integration.