Financial reform is coming down to the wire. Excited? You shouldn't be, unless you're a Wall Street banker. By all appearances, the reforms will leave most of the risk in the system and allow big banks to get back to raking in the big bucks.

Of course, while reform will likely leave our system in danger, it may have created opportunity in the stocks of big banks. The industry stayed under pressure as many investors shied away from the uncertainty that reform created. Now, unless something drastic happens in the next week, that uncertainty will resolve in the banks' favor.

Among the biggest banks, none have been slapped around by investors as much as Bank of America (NYSE: BAC) and Citigroup (NYSE: C). But for investors looking for a good way to profit from financial reform, which stock is a better bet? Let's take a look.

Steady hand?
It's hard to argue that either B of A or Citi had a steady hand on the wheel during either the lead-up to the financial crisis or the financial crisis itself. The Lloyd and Harry of banking's version of Dumb and Dumber held their hands out for far more government cheese than any of the other big banks.

In fact, it's only if you compare the two to the absolute basket cases that are Fannie Mae (NYSE: FNM) and Freddie Mac -- both of which are still sucking up money from Washington -- that you could say "well, it could have been worse."

But if we stack the two banks against each other, it's notable that Citigroup's problems were by and large internal and of the bank's own making. Bank of America, on the other hand, brought a lot of crud down on its own head by swallowing up both Countrywide and Merrill Lynch. While those buys don't say much for B of A's dealmaking savvy -- an issue I've railed about in the past -- it does suggest that the organization may have had more of its internal ducks in a row than Citi.

And of course we can't skip over the fact that in 2008 and 2009, Bank of America reported a combined $10 billion in positive net income while Citi chalked up nearly $30 billion in losses.

While we know past performance isn't always indicative of future results, B of A definitely has the edge here.

Merrill, Merrill, how does your garden grow?
Back in 2006, these two notched eerily similar numbers -- $21.1 billion of net income for B of A and $21.5 billion for Citi. As of the past 12 months, both have a long way to go before getting back to those levels. Bank of America racked up $5.2 billion on its bottom line while Citi managed $1.2 billion.

While I would strongly urge against holding your breath until these banks return to those peak levels, we can't ignore the fact that Bank of America can look back at a much higher summit; the combined profits of Merrill and Countrywide in 2006 were more than $10 billion.

Spitting in the face of the concept of "too big to fail," many of the biggest banks went on shopping sprees during the financial meltdown. JPMorgan Chase (NYSE: JPM) took over Bear Stearns and Washington Mutual, Wells Fargo (NYSE: WFC) bought Wachovia, and, of course, B of A did its thing.

I think a weak housing market may persist for quite some time, so that doesn't say a whole lot for the former Countrywide's prospects. However, Merrill brings a really great -- and very stable -- wealth management division to B of A, and while its investment banking division was far from the best on Wall Street, it should join Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) in raking in big profits again when financial reform is wildly successful at doing a whole lot of nothing.

We can now score it 2-0 in favor of Bank of America.

Value is what you get
Getting a handle on the valuation of these banks is like trying to grab a Wham-O Water Wiggle since a lot depends on to what extent earnings will recover and how meaningful currently reported book value is. But let's take a look at the numbers:


Bank of America


2010 price-to-earnings ratio



2011 P/E



2012 P/E



Price-to-book value



Price-to-tangible book value



Source: Capital IQ (a Standard & Poor's company) and Yahoo! Finance.

Can you believe it? With the exception of price-to-tangible book value, B of A is cheaper than Citi on every one of these metrics. That makes it 3-0 and a clean sweep for B of A.

Now that you know what I think, head down to the comments section below and share your thoughts on these banking behemoths.

There are stocks Buffett only wishes he could buy. Which stocks? I'll give you a hint, they're nowhere near as big as B of A or Citi.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.