Investors looking for a bargain in the banking sector might be attracted to Ally Financial's (NYSE: ALLY) shares, which are trading down roughly 50% from their 2021 highs. Ally's dividend yield is now 4.3%, which is toward the high side of its historical yield range, hinting at a cheap entry point.

But before you make a final call with this digital-heavy bank, you might want to consider industry giant Toronto-Dominion Bank (NYSE: TD) instead. Here's why.

There's nothing inherently wrong with smaller banks, but the depositor runs seen at several banks in early 2023 are something of a wake-up call. Smaller banks do, in fact, have more risk when there are industry dislocations. Ally Financial has a market cap of roughly $8.5 billion. TD Bank, which is the more common name used for Toronto-Dominion, has a market cap of around $105 billion. 

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Source Fool.com