JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) are the nation’s Nos. 1 and 2 banks by assets, but that’s where any parity ends for the purposes of this competition.

True, both banks have been hit with billions of dollars in fines and settlements related to dodgy mortgages securities and other shenanigans that went on before the financial crisis. And, yes, both are struggling with ultra-low interest rates, sluggish trading activity and a residential housing market that could really use a spark.

Beyond that, one of these names is a reasonably well-run bank with decent earnings prospects and a stock set for at least market-matching returns over the long haul.

The other is Bank of America.

Just look at the tape. The S&P 500 is up 11% over the last 52 weeks — a more-than-good return that any investor should be happy with, especially a low-cost, passive index investor. At the same time, JPM has been a big-time market laggard. Shares in JPM are up 6% over the last year, trailing the broader market by 5 percentage points.

But at least JPM is above water. BAC lost more 7% over the last 52 weeks. Hell, it’s off 11% for the year-to-date already.

Maybe BAC is beaten down to a point where it offers great value and will outperform JPM going forward — but probably not. Here’s why.

JPMorgan Chase (JPM)

Two words: Street test.

JPMorgan had to make some adjustments to its capital program, but the bottom line is that JPM passed the Federal Reserve’s stress test and can go ahead with its plans to rain cash down on shareholders.

Indeed, thanks to the Fed’s green light, JPM announced a quarterly dividend of 44 cents — up 10% from 40 cents last year — as well as a stock buyback program of up to $6.4 billion.

As for the dividend, the higher payout would equate to a yield of 2.9% at the current stock price. At long last, that’s downright respectable. The yield on the average S&P 500 dividend stock is only 1.99%. The yield on the index is even lower.

JPM faces the same headwinds as the rest of the bank sector, BAC included. But at least JPM has a decent dividend yield and positive price performance.

Bank of America (BAC)

After the latest round of Fed stress tests, BofA is looking like the gang that couldn’t bank straight. The bank was granted only conditional approval of its capital program. This is the third time in five tries that Bank of America has botched something to do with its Fed stress test.

As a result, BAC can go ahead with its share repurchase program, but it won’t be hiking its paltry dividend. The Fed tested 31 banks, and only six of them failed to raise their dividends on the results. Bank of America was one of them.

This kind of thing is getting old. Last year, BAC had to scale back its plans to return cash to shareholders not once, but twice.

And so BAC limps along with a laughably low dividend yield of 1.3% at a time when the most attractive thing about big banks is that they’re returning so much cash to shareholders.

Our First-Round Pick: JPM

JPMorgan Chase & Co. beats Bank of America Corp by a wide margin. JPM has plenty of problems of its own, but the market has confidence in senior management. It’s tough to respect the C-level guys at BAC when they keep booting the stress test.

Sure, BAC will probably get the Fed’s green light when it resubmits its capital plan in September … but what about next year?

Head back to the Stock Market Madness bracket to vote for your favorite stocks and check out other previews!

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.