Question and Answer Session
Operator
Thank you. And our first question comes from the line of Julianna Balicka with KBW. You may proceed.
Julianna Balicka, KBW
Good afternoon.
Dunson Cheng, Chairman, President and CEO
Good afternoon.
Heng W. Chen, EVP, CFO and Treasurer
Hi Julianna.
Julianna Balicka, KBW
Hi. I just wanted to ask a few questions on the deal. For the acquisition, are there any cost saves or any branch consolidation or any synergies in branch expansion that you are planning on?
Heng W. Chen, EVP, CFO and Treasurer
Julianna, this is Heng Chen. I think we will be covering that in the S4 perspective, but it’s an in-market deal, so we would expect that to be relatively high in the order of 40% plus, but we are not commenting on branch closures or anything specific beyond that.
Julianna Balicka, KBW
Very good, that makes sense. And then, in terms of the loan growth that you are looking for next year, the 10% organic loan growth, could you talk a little bit more about the key drivers of that? Is that C&I? Is that CRE-based? And what are the residential mortgage growth assumptions within that 10%?
Dunson Cheng, Chairman, President and CEO
Julianna, this is Dunson Cheng. Yeah, the expectation of 10% is based on the current pipeline that we have, which is over a billion dollar, and roughly our I would say above 60% to 70% CRE, and 30% or so C&I loans. We expect our residential mortgages to do a little better than what we have been seeing in 2014, which is roughly $14 million per quarter.
Julianna Balicka, KBW
Very good, that …
Heng W. Chen, EVP, CFO and Treasurer
Especially with the lower interest rates, we are seeing increase in application volume. Although, we are not offering 30-year mortgages except through Freddie Mac.
Julianna Balicka, KBW
Got it, and one quick housekeeping question on the deal, if I may? Do you have any preliminary sense in the fair value marks on the Asia Bank’s portfolio?
Heng W. Chen, EVP, CFO and Treasurer
Yes. Generally their loans are well-priced, particularly in our niche in New York. Based on review, most of them are floating rate that are tied to prime. Generally at least one, if not higher than that over prime. Their credit quality is excellent so we would think that one under the purchase accounting we would reverse their loan loss reserve which is, I am going from memory about, $6 million or so. That would be reversed out, and then, because they have excellent quality loans, we don’t think there is going to be a negative credit mark. And then because they are floating rate loans nor do we think we will be booking at higher than par. They do have some appreciative value in the real estate that they own, that they have owned for many years. And so there is going to be some purchase accounting write-up of that, which would reduce goodwill, but we are going to wait until the S4 to eliminate the goodwill, the purchase accounting pro forma, if it’s required.
Julianna Balicka, KBW
Got it, okay. Thank you very, very much. I’ll step back.
Heng W. Chen, EVP, CFO and Treasurer
Thank you.
