When the stocks in your universe are no longer as undervalued as they used to be, you *could* lower your standards and keep investing. Alternatively, you could expand your universe. That's what I'm trying to do, as I dip my foot into the financials pool. Reading David Moore's book, Analyzing and Investing in Community Banks, was a helpful step in this process.
The national banks are intimidating. They hold various derivatives and other securities that are difficult to understand. Their financials represent consolidations of all sorts of different operating entities, making risk assessment very difficult.
But the good news is that this is not the norm for banks in the US. Community banks are much simpler institutions, and there are thousands of them, many of which are public. Moore guides the reader through a community bank's balance sheet and income statement, pointing out where the differences between banks lie and where the risk comes from. If you can understand the risks, you are in a position to value the company.
While Moore did hint at being a value investor to some extent, the book is aimed at a larger audience. So while it offers a great deal of information on understanding banks, it doesn't go into great detail on low multiple investing. But there are other value investors out there who do invest in this sector. One in particular who I read is Nate at oddballstocks.com. He offers a great introduction to bank investing from a value perspective, which I believe you'll get more out of once you have read Moore's book.
(Incidentally, though Amazon shows the book as unavailable, rumour has it that a pdf copy may be floating around the web...but you didn't hear it from me!)
Disclosure: I don't own any financials...yet