I have often miced banjos.
I do it similar to an acoustic guitar. A mid to small diaphragm condenser at the neck about where the hand plays (to catch the hammer ons) and one ( sometimes large condenser even a good dynamic) slightly above the players shoulder level facing down at approximately a 45 degree angle toward the picking hand. Sometimes I will move that mic toward the end of the tailpiece if the banjo is really harsh sounding.