Bank of America vs. Truist: Which Bank Stock Has More Upside in 2026?

Nikita Kataruka September 14, 2026

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Key Takeaways

Bank of America has strong earnings growth prospects, diversified revenues and a low-cost deposit base.
BAC benefits from rising NII and IB fees, strong trading revenues, and expanding digital capabilities.
Truist trades at a discount, but higher expenses and modest earnings growth could limit near-term upside.

The banking backdrop is becoming more constructive as resilient consumer spending, improving loan demand and a revival in investment banking (IB) activity create growth opportunities. Against this setting, Bank of America (BAC - Free Report) and Truist Financial Corporation (TFC - Free Report) present two distinctly different ways to play a potential banking-sector upswing.

Bank of America brings the advantages of scale, a broad revenue base and a powerful deposit franchise. Its exposure to consumer banking, wealth management and global markets gives the company multiple avenues to benefit from healthier capital markets, easing funding pressures and an improving interest-rate environment.

Truist, meanwhile, offers a more focused regional-bank recovery story. Its upside rests largely on tighter cost control, balance-sheet optimization, improving net interest margins (NIM) and stronger operating efficiency.

Technology is also becoming an increasingly important battleground. Both banks are investing in artificial intelligence (AI), data analytics and digital capabilities. Yet, their contrasting scale, business mix and risk profiles could lead to very different outcomes for investors. Thus, as banking fundamentals gradually improve, let us find out which among BAC and TFC appears better-equipped to turn the evolving backdrop into stronger investor returns in 2026.

The Case for BAC

Bank of America, the second-largest bank in the United States, is well-positioned for continued improvement in net interest income (NII), supported by loan growth, fixed-rate asset repricing and stabilizing funding costs. From 2020 to 2025, the company’s NII saw a compound annual growth rate (CAGR) of 6.7%, with the momentum continuing in the first half of 2026. Management expects fully taxable-equivalent NII to increase in the upper end of 6-8% this year.

The company continues to benefit from one of the strongest and lowest-cost deposit franchises among U.S. banks, providing a durable competitive advantage and a stable source of funding. Despite a challenging operating environment, it maintains healthy balance sheet growth, with net loans and leases rising 6.2% year over year to $1.20 trillion and total deposits increasing 1% to $2.03 trillion as of June 30, 2026.

BAC’s IB business has shown a meaningful recovery after a weak 2022 and 2023, when IB fees in the Global Banking segment declined 45.7% and 2.4%, respectively. The business rebounded in 2024 and 2025, with fees rising 31.4% and 8.4%, respectively, with the recovery accelerating in the first half of 2026. With global merger and acquisition activity improving and the company maintaining a healthy deal pipeline, BAC is expected to continue benefiting from solid growth in IB fees.

The company’s trading business has also improved since 2022. In the first half of 2026, sales and trading revenues, excluding net debit valuation adjustment (DVA), rose 22.3% year over year, driven by a 49.5% jump in equities trading and a 4.8% increase in fixed-income trading. However, given the volatile nature of the capital markets, trading revenues can fluctuate significantly and may create earnings variability even when the overall performance remains favorable.

Bank of America has continuously been strengthening its long-term growth prospects through investments in digital banking, AI, payments and selective branch expansion. The rising adoption of Erica and Zelle, generative-AI enhancements to EricaAssist, and continued financial-center expansion should improve efficiency, engagement and cross-selling. Meanwhile, its cross-border real-time payments initiative and proposed Jio Credit investment could broaden fee income and provide exposure to India’s growing digital lending market.

The Case for TFC

Compared with Bank of America, Truist has a more regionally focused business model and is relatively less exposed to interest rate cycles and capital markets volatility. Since selling its insurance subsidiary in 2024, the company has been working to strengthen its balance sheet, reposition its portfolio and expand more stable sources of non-interest income.

In August 2025, TFC announced a long-term growth plan aimed at deepening its presence in attractive U.S. markets. The plan includes opening 100 new branches, renovating more than 300 existing locations in high-growth cities by 2030 and investing in its business banking ecosystem.

Truist is also focusing on wealth management and IB as key drivers of fee income. While total non-interest income declined in 2022 and 2024 due to large securities losses, non-interest income, excluding those losses, saw a six-year (2019-2025) CAGR of 1.9%. The uptrend continued in the first half of 2026. A broader recovery in trading and IB activity could further support fee revenue growth, with management expecting non-interest income to rise 10% in 2026.

On the interest income side, Truist’s NII has demonstrated a relatively stable growth trajectory, witnessing a 0.9% CAGR over the five years ended 2025, with momentum continuing into the first half of 2026. Management has moderated its 2026 NII growth outlook, primarily reflecting the continued optimization of less strategic lending portfolios, lower loan spreads, a less favorable deposit mix and changes in the forward rate curve. These headwinds appear manageable and, hence, solid loan demand and the ongoing repricing of deposits are likely to continue to provide support to funding costs and spread income as the rate cycle evolves. This is reflected in management’s expectation for 1.5% sequential NII growth in the third quarter of this year.

However, Truist’s growth strategy comes with cost pressure. As the company expands its branch network, upgrades technology and adds talent to strengthen its commercial banking business, expenses are likely to remain elevated. Management expects GAAP expenses to rise 1.75% in 2026, which could limit near-term operating leverage compared with Bank of America’s scale-driven efficiency.

BAC & TFC: Price Performance, Valuation & Other Comparisons

Over the past three months, TFC and BAC shares have risen 4% and 12.2%, respectively. Hence, in terms of price performance, Bank of America has a clear edge over Truist.