Investing in bank stocks provides exposure to the financial sector and, traditionally, the opportunity to earn dividends from relatively stable companies that operate in a highly regulated industry. However, banking stocks currently face challenges from downturns in the economy, increasing funding costs, and tightening regulations.

Better performing bank-themed exchange-traded funds (ETFs) to consider for the fourth quarter hold a portfolio of some of the nation's largest banks. Below, we outline three relatively well-performing bank ETFs, excluding inverse and leveraged ETFs and funds with less than $50 million in assets under management (AUM). All data below is as of Dec. 14.

SPDR S&P Bank ETF (KBE)

• Performance Over 1 Year: -4%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 3.36%
• Three-Month Average Daily Volume: 2,899,178
• Assets Under Management: $1.5 billion
• Inception Date: Nov. 8, 2005
• Issuer: State Street Global Advisors

This ETF seeks to provide similar returns to the S&P Banks Select Industry Index, an equal-weight benchmark comprising U.S. banking companies. KBE provides exposure to banking sub-industries, such as asset management, custody, regional banking, and mortgage finance.

KBE's top three holdings include Bank of Hawaii Corp. (BOH) a regional financial services company, Western Alliance Bancorp. (WAL) which is a holdings company that provides online banking products, and Columbia Banking System Inc. (COLB) a financial service for primarily small businesses.

First Trust NASDAQ Bank ETF (FTXO)

• Performance Over 1 Year: -9%
• Expense Ratio: 0.60%
• Annual Dividend Yield: 3.61%
• Three-Month Average Daily Volume: 33,385
• Assets Under Management: $141 million
• Inception Date: Sept. 20, 2016
• Issuer: First Trust

The fund, which rebalances quarterly, has an investment objective to deliver a return that corresponds to the Nasdaq US Smart Banks Index, a benchmark consisting of U.S. banking companies selected by liquidity, volatility, value, and growth factors.

FTXO's top three holdings includes U.S. Bancorp (USB) which is a large financial services company, Wells Fargo & Co. (WFC) they provide wholesale, community, and investment financial services, and Citigroup Inc. (C) which is a company that provides businesses, individuals, and other institutions with a wide range of financial services.

Invesco KBW Bank ETF (KBWB)

• Performance Over 1 Year: -10%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 3.42%
• Three-Month Average Daily Volume: 1,028,828
• Assets Under Management: $1.4 billion
• Inception Date: Nov. 1, 2011
• Issuer: Invesco

KBWB aims to track the performance of the KBW Nasdaq Bank Index, a modified market-capitalization-weighted benchmark comprising large national U.S. banks, regional banks, and thrift institutions.

KBWB's top three holdings include Morgan Stanley (MS) which provides investment products and services, Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc. (GS), which is a global investment and financial services company.

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As of the date this article was written, the author does not own any of the above ETFs.

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