Given the shellacking that banks have suffered over these past few years, many investors have begun to posit that the bad news is fully priced in, the difficulties are behind the industry, and bank stocks may once again be a good bet.

Not so fast, says Inside Value analyst Jason Moser. According to the FDIC, some 700 banks are still considered "problem institutions" today. That's 10% of the industry. Just since January, the FDIC has closed down 72 banks, more than double the number it closed in the first five months of 2009. And to make matters worse, lending is down and unemployment persists.

It all spells trouble for the nation's financial institutions, and investors should be wary ... but not necessarily scared off. Moser believes there are some Foolish ways to get some exposure to this risky, but potentially rewarding, business.

First of all, consider investing in banks you can understand. The big banks have gotten so big, it's hard to know how to value them anymore. Citigroup (NYSE: C), for instance, has watched its shares get diluted quarter after quarter, and it now has more than 28 billion shares outstanding. That's 23 billion more than just two years ago, and that's bad news for shareholders. Think about eschewing the big boys and looking into one of the smaller, better-capitalized regional institutions -- maybe one such as Community Bank System (NYSE: CBU).

And don't forget, you can avoid banks altogether and still get exposure to the financial sector through insurance companies. Companies such as Markel (NYSE: MKL) and Alleghany (NYSE: Y) have a rich tradition of building and returning shareholder value, and they're now trading at nice discounts to their historic book values. And that's information worth banking on.

Jason Moser owns shares of Markel and Alleghany. The Motley Fool also owns shares of Markel, which is a Motley Fool Inside Value recommendation. You can bank on The Motley Fool's disclosure policy