NEW YORK, March 15 (Reuters) - Shares of BofI Holding, Inc. (NASDAQ:BOFI) traded close to their offering price in their market debut on Tuesday a day after the Internet bank used an auction to price its initial public offering.

Shares of (NASDAQ:BOFI), the parent company of Bank of Internet USA, opened up 1 percent and by midday, traded at $11.51, down a penny from its IPO price of $11.50. Earlier, shares hit $11.65.

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CORRECTED - BofI Holding Steady After Auction-Based IPO
BofI Holding steady after auction-based IPO

The company had filed for an offering of 2.25 million shares in the estimated range of $9 to $13 per share. The IPO ended up pricing 3.052 million shares at $11.50 per share -- raising a more-than-expected $35.1 million.

In traditional IPOs, investment banks use their own discretion to price the deal after gauging investor demand, typically leaving room for shares to rise in their first day of trading.

But BofI used an auction run by W.R. Hambrecht + Co. to sell its shares to the public.

In auctions, potential buyers submit bids for the number of shares they wish to buy and at what price. The IPO is then set at the "clearing price," or the highest price that sells all of the shares being offered, minimizing the first-day "pop" seen in traditional IPOs.

Google Inc. (GOOG.O: Quote, Profile, Research) used a version of an auction to sell its shares to the public last year, and mutual fund and stock research firm Morningstar Inc. has said it will use an auction format for its proposed IPO.

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