As long as the rate doesn't climb by 500 or 600 basis points, we're fine.
Over the last couple of years we've kept our investments short term, so from the investment side we're not looking bad. We keep investments three years or less. Another portion of our portfolio has been in adjustable-rate investments that will adjust at the higher rates.
Any type of product we hold on the books is variable rate. The fixed-rate mortgages we have done have always been sold off on the secondary market. Our mortgages make up 63% of our portfolio, and they're tied to a 10-year Treasury that adjusts two times a year.
We really haven't done anything significantly different.
The one exception is with a mortgage product in which the rate for the first five years is locked in, and then the rate adjusts after that.
That's a fairly recent product, so we had been offering it at a discount to get it out on the market.
We moved that product back into the normal pricing spectrum, so we're not giving everything away.
Otherwise, as the cost of funds has risen we've moved up rates accordingly and kept an eye on the marketplace.
Our position in the market is to lead the competition in rates we pay on deposits and charge on loans, so we've been repricing week by week. For new cars we offer a 5.9% five-year, which is locked in until June.
Our spreads are tightening, but that isn't a major concern. Right now we're at a 1.5% ROA and that may move down but we're pretty comfortable with it. It [narrowing margins] might make building capital a little tougher. We're at 6.5% right now, and we want to get it up to 8% by 1995.
As far as investments go, we had always stayed pretty short.