What happened

BofI Holding, Inc. (AX 2.21%) stock has climbed 36.8% through the first half of 2018, according to data provided S&P Global Market Intelligence. The company's share price has been on a tear, and is now up roughly 70% over the last year.

BofI published quarterly earnings reports on Jan. 30 and April 26. Shares climbed after the second-quarter results, but gave up some ground following the third-quarter earnings release. 

BOFI Chart

BOFI data by YCharts

So what

BofI's net income actually fell roughly 2% to land at $31.7 million in the second quarter compared to the prior-year period. However, this was due to a one-time $8 million expense incurred due to the implementation of The Tax Cuts and Jobs Act of 2017. The bank's loan portfolio grew 15.6% year over year in the period, indicating that the company is still finding success in building its portfolio.

The company's third-quarter report showed that BofI increased earnings per share 27% year over year, increased its net income 25% to reach a record $51.3 million, and grew the size of its loan portfolio 14.9%. Both sales and earnings came in ahead of the average analyst estimate, but shares saw a minor sell-off following the results because much of the company's loan growth in the quarter came from "less sticky" sources.

A person using a laptop and holding a mobile phone with a digital web projected around it.

Image source: Getty Images.

Now what

The dedicated online-banking space looks to have plenty of expansion potential, and BofI should be able to scale up its operations at relatively little cost. The company's ability to offer more favorable rates to its customers because it has fewer operating expenses than banks with brick-and-mortar locations could be a huge advantage over the long term. As fellow Fool writer Matthew Frankel points out, BofI's return on equity and return on assets roughly double the industry benchmarks.

At present, one of the major obstacles to sustaining rapid customer growth appears to be that awareness of the company's services is still relatively low. That's actually a good problem to have and shouldn't be too difficult to overcome.

BofI is scheduled to release fourth-quarter earnings on July 26.