I've always thought that Internet-based banks make a good deal of sense as companies. A bank with a lower cost structure, because of a lack of expensive trappings and branches, should be able to pass on a portion of those savings to customers in lower fees and higher rates and retain the rest as extra profits. While the logic makes sense, it hasn't translated into a simple formula for investing success yet.

It's true you can find better rates at Internet banks such as Netbank (NASDAQ:NTBK) and E-Trade (NYSE:ET), but apparently not so much better that everyone is running to sign up at either of the two. Plus both small and large brick-and-mortar banks such as Bank of America (NYSE:BAC) have managed to retain their customers by putting up Web banking features of their own and being able to offer service with a smile when needed.

But with BofIHoldings (NASDAQ:BOFI) having gone public earlier this month, the market now offers a new publicly traded bank focused on making a go of it on the Internet. I feel no shame in saying I'm excited to see how things turn out for San Diego-based Bank of Internet, but as with any IPO I feel no hurry to rush out and buy shares. I'd much rather see the company adjust to life in the public market and develop a bit first. With that in mind let's take a look at a few metrics from when BofI was a private company. These metrics are just a few quick and basic calculations to get a feeling for a bank's health.

2004 2003 2002
Return on Equity 7.45% 8.16% 6.50%
Return on Assets 0.60% 0.70% 0.55%
Efficiency Ratio 49.47% 49.06% 79.28%
Equity to Assets 7.84% 8.37% 8.96%

A ll calculations involving equity and assets are average equity and average assets.

The only metric that is particularly impressive right now is the efficiency ratio, which is not too surprising for an online bank. Over time I hope to see the return on equity and assets begin to trend up a bit, and I expect they will. With a heavy focus on attracting deposits, and offering the rates to do so, the lower returns on equity and assets are not terribly surprising.

I'll close by noting that Bank of Internet has a nice 2.25% with no fees for accounts that maintain a minimum $1,000 balance, and for those of you out there over 40 it looks like there are no fees or minimum balances. Not a bad deal at all for customers. For investors, though, we'll have to wait and see whether it eventually translates into a winning proposition.

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Fool contributor Nathan Parmelee has done his banking online through a small bricks-and-mortar bank for more than a decade. He does not own shares in any of the companies mentioned.