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Executives

Louis J. Cappelli – Chairman and Chief Executive Officer, Sterling Bancorp

John W. Tietjen – Executive Vice President and Chief Financial Officer, Sterling Bancorp

John C. Millman – President, Sterling Bancorp

Jack L. Kopnisky – President and Chief Executive Officer, Provident New York Bancorp

Luis Massiani – Chief Financial Officer, Provident New York Bancorp

Analysts

Travis Lan – Keefe, Bruyette & Woods, Inc.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Frank J. Barkocy – Mendon Capital Advisors Corp.

Jon C. Ashe – Wellington Management Co. LLP

Sterling Bancorp (STL) Merger of Provident New York Bancorp Conference Call April 4, 2013 10:00 AM ET

Operator

[Technical Difficulty]

Louis J. Cappelli

Thank you for that introduction, Jack. We are looking forward to partnering with you and your professional and accomplished team to build the new Sterling. I also wish to thank all of the investors, customers and employees of both companies, who have joined us for this call. The merger of Provident’s in Sterling is a positive development for both companies. It will create a stronger, more competitive institution, serving the needs of small to middle market businesses and individuals.

Before you hear the details of the merger, I would like to give you my personal perspective. I have spent my entire adult life and professional career here at Sterling from the male room to the board room, and I have a lifelong commitment to seeing the company prosper. I believe we can all be proud of everything that the company has achieved up to and including this merger, which will position the combined company to reach new heights of customer service, product availability, profitable growth and shareholder value.

The Sterling Boards of Directors have unanimously voted for this merger because we are all confident that it is in the best interest of our shareholders. The stock-for-stock transaction provides a solid return on our shareholders investment and also an opportunity to participate in a rewarding upside into the future.

The combined institution will have greater resources for customers in an expanded market area. That is good news for the small to mid size businesses and individuals of the New York metropolitan region, who will now have a stronger financial partner with a diverse portfolio of products and services.

The merger is an excellent fit because Provident and Sterling are institutions of similar size, character and culture. The decision to carry on the Sterling brand name is a commitment to the core values that have made Sterling an attractive choice for customers, employees and shareholders.

I’m honored to serve as the Chairman of the boards of directors of the new company and bank and will be engaged in the business going forward. My thanks to all of the shareholders, customers, employees and community members who have supported us over the years. The board of directors and management of the new Sterling are committed to serving your needs and building a growing and successful institution as we go forward.

And now Jack, I’ll turn it back to you.

Jack L. Kopnisky

Thank you very much, Lou. Now let us take you through the details of the transaction starting on slide three of the investor presentation. A consideration for the transaction is a fixed exchange ration of 1.2625 Provident New York Bancorp shares for each Sterling Bancorp share. This is a 100% stock-for-stock transaction. The premium based on yesterday’s stock value is approximately 11%.

The exchange ratio results in approximately 53% ownership by Provident shareholders and 47% by Sterling shareholders. Beginning with the first dividend payment after closing and subject to board approval, we intend to increase our regular quarterly cash dividend on our common stock to $0.07 per share. This will enable former shareholders of Sterling Bancorp common stock to maintain a consistent dividend payment after close. While we consider this a merger of equals, technically Provident New York Bancorp is the acquirer. We plan to merge Sterling National Bank in to Provident Bank and convert to a national charter. We run the process of completing an application for such a move prior to this transaction.

The end result for Provident will be a name change to Sterling Bancorp and Sterling National Bank. Given the challenge of a name conflict that exists in New Jersey with Provident Financial, it was most logical to transition in the combined company to the well regarded Sterling Brand. We will continue to maintain Executive Officers in both New York City and Montebello in Rockland County, New York as each affords us benefits in terms of talent acquisition and facility efficiencies.

The new leadership team will consist of experienced high performing leaders from both organizations. I will lead the company as CEO with Luis Massiani as CFO. Lou Cappelli, as noted, will be the Chairman of the Board. Current Sterling Bancorp President and Director John Millman will also be appointed to the Board of Directors and will serve as Senior Advisor to the combined company. Bill Helmer, our current Board Chair will also serve on the board as an Independent Director as will I, as a Director.

We expect the new board to have 13 members at closing with 7 members among Provident directors and six selected from amongst Sterling directors. We will seek approval from our respective shareholders along with customary regulatory approvals. We have already met with both the OCC and Federal Reserve to brief them on the transaction. We expect to receive approvals and close in the fourth calendar quarter of 2013.

The combined franchise will have approximately $6.5 billion in assets, $5.2 billion in deposits, and gross loans of $4 billion. The combined 46 branches average $112 million in deposits per branch. Both organizations have very strong core deposit basis. Combining the loan book creates a solid diverse mix of product options for our clients.

Each organization has historically maintained strong credit metrics, and we anticipate continuing this level of performance. We will also continue to maintain strong capital levels at both the holding company and the bank. We intend to raise approximately $80 million in a debt issuance prior to closing and downstream the majority of the cash into the bank. As part of this, we intend to pay off the trust preferred securities of Sterling and reduce the funding costs.

From a projected operating basis for the combined company, the yield on earning assets is anticipated to be approximately 4.17%, driven by higher yielding loans and securities from Sterling. The cost of deposit is low at 29 basis points, margins are estimated at 366 basis points, and as I said before, the fee income ratio to revenue will be 24%.

I could tell you that the entire leadership team will be very focused on enhancing both the net interest margin and the level of fee income. Once fully phased-in cost savings are realized, which is estimated to be by year-end 2015, we project our efficiency ratio to be in the low-to-mid 50% range, return on assets to be greater than 1% and return on average tangible equity to be greater than 12%.

Slide five provides further details of the combined lending and fee-based businesses. The lending product set in the origination capabilities are significantly enhanced by the combination. The revenue mix is further enhanced by the high percentage and diversity of fee income businesses generally coming from Sterling.

The combination delivers high quality, long-term expertise in the areas of middle market C&I lending, asset based and accounts receivable management and lending, payroll finance, commercial real estate lending, equipment finance and warehouse lending.

From a fee-based perspective, there is long history for both companies in the areas of depository and cash management, payroll processing, mortgage banking, wealth management, factoring and trade finance and title insurance. Projected revenue will be approximately $257 million.

Slide six shows a diversified mix of loans with a pro forma loan yield of 5.1%. 29% of the portfolio is C&I, 26% commercial real estate, 19% 1-4 family loans and 9% in multifamily product. This mix gives us better diversity than either company could achieve separately. We have, as a combined entity, a strong core funding base at a cost of 29 basis points.

Non-interesting bearing demand deposits of 31%, now is 13%, savings and MMDA 37% and time deposits 19%. Both organizations have historically focused on low cost funding and we will continue to do so in the future as we ensure that we provide full relationship banking to our clients.

Out of this combination, we see increased revenue generating opportunities. I would emphasize again that none of the revenue opportunities are included in the pro forma financials. These two organizations with terrific product solutions and platforms that will become even more productive with a disciplined team based distribution model.

Specifically, we will now be better positioned to serve larger, more diverse clients, especially in the middle market segment. There are meaningful opportunities to bring expanded product capabilities to each bank’s clients. The product teams have many potential clients with the need for specialty lending solutions such as asset based lending and factoring. The team from Sterling will be able to bring more commercial real estate solutions to their clients.

Collectively, we have an opportunity to provide wealth management solutions to small and middle market business owners. We will also expand Sterling’s mortgage business across the Provident markets and beyond with increased origination volumes and ancillary fee income such as – from area such as title insurance.

A team-based approach to accelerate production and originations will drive the optimum behavior from our teams, benefiting clients and shareholders. This distribution methodology is a differentiator and we talked about that before on the Provident calls.

Slide eight shows how the combination metro New York market compares to regional banks. With this merger, we become a top 10 bank in terms of deposits, and our distribution system will cover a strong and growing market within the region.

Slide nine represents an interesting heat map of businesses within the region. To make the point of the map apparent, Provident’s legacy markets of Rockland, Orange, Sullivan, Ulster, Putnam and Dutchess counties are home to less than 10% of target market companies within the region. And our teams have done a very good job of penetrating those markets and enjoy a top three market share position in those markets.

The balance of the map including Manhattan, the outer boroughs, Long Island and contiguous New Jersey Counties account for more than 90% of businesses in the category of our targets. There is significant opportunity as we merge these companies.

Now let me ask Luis Massiani, Provident CFO to pick up the call and take you through the remaining slides.

Luis Massiani

Thanks Jack. Turning to slide 10, we provide details on our cost savings estimate of $34 million, which represents approximately 18% of the combined operating expenses. We have worked closely with Sterling management in determining these savings opportunities and are confident we will achieve these targets. We currently anticipate to consolidate five to seven branches and other office locations throughout the New York City metro area. We believe that the combined company will be in a significantly better position to manage increasing expense burdens faced by institutions of our size. Once fully phased-in cost savings are realized, we expect to manage the business to a mid-50s efficiency ratio.

On slide 11, I will go over the key transaction assumptions. For financial modelling purposes, we are assuming a transaction closing date of December 31, 2013 although, we expect the transaction will close earlier in the fourth calendar quarter. As neither Provident nor Sterling provide guidance on earnings, we have used equity analyst consensus estimates to model the pro forma impact of the transaction. Based on data available on Thomson Financial as of April 2, Sterling’s IBES mean consensus estimate of $0.79 in 2014 and $0.84 in 2015 applying a 6.5% analyst estimated long-term growth rate.

For Provident, our fiscal year and consensus analyst estimates are in a September year-end basis. For comparability purposes, we have converted the available consensus analyst estimates to a calendar year basis. Using this approach, Provident’s IBES mean consensus estimate for calendar year 2014 is $0.70 and $0.74 in 2015 based on the analyst estimated long-term growth rate of 5%.

As stated earlier, we expect to realize approximately $34 million in cost savings from the merger. We expect to achieve these savings 75% in 2014 and fully in 2015. The pre-tax merger related expenses at close are estimated at $33 million. We have completed our credit due diligence and have estimated a credit mark of approximately $33 million, which represents approximately 2% of Sterling’s loan portfolio.

We have also included the impact of an anticipated $80 million debt capital rates. Although we are still evaluating various issuance alternatives, we expect we will be able to access cost efficient capital to further strengthen the combined company’s capital position. We also expect to use [portion] of the proceeds of the offering to redeem Sterling’s trust preferred securities. We anticipate raising our quarterly dividend to $0.07 per share subject to board approval.

On slide 12, let’s review the pro forma financial impact of the transaction. Looking at 2015, which is the first year of fully phased-in cost savings, the estimated earnings per share accretion is above 30%. Assuming our cost savings grow annually at 3.5% and Sterling’s long-term growth rate of 6.5%, we expect to achieve an internal rate of return in excess of 20% on this transaction.

For modelling purposes, we have assumed a 13-times terminal value multiple and a combined Tier 1 leverage ratio of 9% through the projection period. We anticipate the transaction will have a dilutive impact on tangible book value per share of approximately 15.6% at close. This is due to the relative size of the two companies, the relative price of tangible book value multiples and merger related expenses.

Given the attractive pro forma earnings profile of the combined company, we expect to earn back the tangible book value dilution in approximately 2.8 years. This is based on the incremental earnings method where we only factor in Sterling’s earnings, transaction cost savings and purchase accounting adjustments, and measure how long it takes us to earn back the $20 per share dilution at close.

Using the consolidated earnings approach, where the combined earnings are compared to Provident’s stand-alone tangible book value projections, the earn-back period is estimated at approximately 5.25 years. Under any metric, we believe this is a compelling transaction that will create value for shareholders over time.

In the bottom table, we review the pro forma estimated capital position at close. The pro forma ratios include the impact of the assumed $80 million debt capital rates. As you can see, both the holding company and bank remain in a strong capital position that will support the future growth of the combined company.

On slide 13, we review our due diligence work. Provident and Sterling have conducted substantial two-way credit in operational due diligence. We have used internal and external resources to complete this review and we have confirmed these are two high quality companies with strong operational risk management and credit cultures.

For purchase accounting purposes, the estimated credit mark of $33 million is approximately 2% of Sterling’s portfolio. Other estimated fair value marks at closing include a mark-up of loans of $14 million, a mark-up of $17 million on Sterling’s investment securities portfolio, and a core deposit intangible of 1.25% of Sterling’s core deposits, which we defined as deposits less all time deposits.

Now I’ll turn it over to Jack.

Jack L. Kopnisky

Thank you, Luis. The combination of these companies will produce a high performing organization. So, firstly, I think of this in maybe a top 10 compelling reasons for this transaction. First, it creates a combined franchise with significant scale to successfully complete in the greater New York City market and I’ll tell you there is no better banking market than greater metro New York City. I’ve looked across the country and the largest concentration of clients and businesses, obviously in the country. So, whatever segment you focus on, there is a lot of opportunity.

Secondly, it puts the combined entity into the top 10 deposit market position among regional banks. So, we have scale. three, it provides compelling opportunity to extract cost savings and materially improve operating efficiency. So, deals like this, we believe are very opportunistic where you have two very strong organizations, bringing them together good deposit-base loan mix, fee income size, but an opportunity to take between 15% to 20% of combined costs out of the organizations and we’ll be very systematic, and procedural in the process to look at that.

Fourth, it has significant growth in cross-selling opportunities. These two companies bring to bear a significant level of products that each other doesn’t have, and in many cases, markets that each other doesn't have.

Fifth, it allows us to leverage small and middle market commercial lending expertise with this team based distribution strategy. so our team based strategy that are managed and monitored and [incentive] based on what they contribute to the bottom line as a team is something that we’re going to implement within the context of the company across the company.

Sixth, it diversifies the loan portfolio and revenue mix and enhances loan origination capabilities. again, I’m not sure you can find a bank out there, especially this size that has the mix and the diversity of loan portfolios and deposit portfolios and the midst of NIM driven revenue and fee income revenue. Seven, we are a 100% committed to maintain very strong levels of liquidity and capital ratios, and we’ve talked to the regulators quite extensively about capital ratios and feeling very comfortable with what we’ve proposed.

Eight, we believe there is significant upside by the nature of this transaction for our shareholders. we think that there is terrific upside as time goes on, especially in an environment that we’re operating in today, which is a very low interest rate and probably extended low interest rate environment, gives us the opportunities to extract cost savings and position ourselves extremely well for increases in rates at some point in time in the future.

Nine, the merger enables us to take best practices and high performing individuals from each company. This is all about taking the best of both worlds from the Sterling side and the Provident side, and identifying those high performing individuals in each organization and creating a high performing organization as a result. It is not about everybody in Sterling going to use the Provident practices or vice versa.

We are going to be very systematic and organized in our process to identify best practices. And frankly, in due diligence, we have identified quite a bit of those best practices, going for our – our go-forward step of strategy. And finally, the leadership team that we are identifying has significant experience in diligence, integration and operating acquisitions. This team has delivered results throughout their career. This level of experience will significantly lower any of the execution risks within the transaction. Look, there’s two big things that we need to do. We have to identify and reduce cost, and we have to increase productivity and grow revenue.

And we, again, will be very systematic in the process to make that happen. This team is very experience in that. I think between Provident and Sterling, there have been nine acquisitions since 2002 and a number of us as senior leaders have led and integrated and managed many acquisitions over our careers.

So in the end, we really look forward to delivering strong results to our shareholders, a great value propositions to our clients and a fantastic work environment for our employees. We want folks that want to come in everyday and be excited about the opportunity before them.

In the final analysis, we’re focused on delivering very strong operating results and look forward to creating this high performing organization that is very effective at execution, in executing this strategy and this plan.

So now I’d like to open this up for questions you may have. Operator, if you wouldn’t mind (inaudible) the message to ask questions.

Question-and-Answer Session

Operator

Okay. (Operator Instructions) Our first question is from Travis Lan of KBW. Please go ahead.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Thanks. Good morning, gentlemen, I’m on for Collyn today, how are you?

Jack L. Kopnisky

Great. How are you?

Louis J. Cappelli

Hi, Travis.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Good, thanks. Jack, I wonder if you could just start and talk about how the integration of this transaction may or may not impact your potential hiring plans with more commercial relationship teams kind of between now and the time the deal closes?

Jack L. Kopnisky

Sure, so we would anticipate to not be hiring teams in the interim unless there is some unique situation where it’s highly opportunistic. But we generally look at kind of freezing the hiring of both companies in the process because we have terrific folks on both teams that, as part of the process, we would identify and integrate.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Okay. And sort of a related question, Luis. So when you think about the $34 million of gross cost saves, do your accretion estimates incorporate any reinvestment of those savings back into the business or those just coming out dollar for dollar?

Luis Massiani

No, they’re coming out dollar for dollar, Travis. Although, as I mentioned, we are assuming that the cost saves, there is a growth component to them sort of close 2015 at 3.5%, but we are not assuming a reinvestment, it’s just dollar for dollar.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Okay. And then in terms of the merger charges, do you have an idea of what the A, the timing will be of the charges and B, what the breakdown will be between what flows through Provident’s books and flows through Sterling?

Luis Massiani

For modelling purposes what we’ve assumed is that that full $33 million is going to flow through our books. In the end, you kind of get to the same place regardless of they take it before sort of from a tangible book value dilution perspective and so forth. We anticipate that the vast majority of those are going to be in the first year sort of the first 12 months after the close although there may be continue – as we continue to evaluate sort of opportunities facilities consolidation, personnel and so forth. So there maybe for some extended time into the second year after the close for the merger related expenses.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Got you. And then could you just – got you – talk a little bit about your feeling for the securities portfolio once you put them together? I mean, is that kind of a good pro forma run rate in terms of the contribution to earning assets where you see it, I mean, it looks like kind of 27%, 28%. Does that seem to make sense?

Louis J. Cappelli

It does make sense. As you know sort of Sterling’s portfolio is slightly different than ours. However, sort of as we grow and double the size of the company, we’ve discussed, sort of Jack and I, that we obviously have to have a little bit more diversified securities portfolio going forward. So the composition that you would see on a pro forma basis is likely going to be what it will look like going forward for the most part.

So you can expect that yields and sort of the composition as a percentage of total assets (inaudible) the yield will likely be sort of very similar to what it is today from a composition perspective as a percentage of total assets. So we fully intend to become a little bit more efficient from a balance sheet perspective and may decrease the size of the portfolio and reinvest that into most of the Sterling’s than our higher yielding loans. So that part of the strategy that we talked about on a standalone basis will continue to be something that we focus on going forward.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Got you. And then just two more, the first is a little silly. But you’re retaining the Sterling name. But do you have an idea for what the ticker will be? Is it going to continue to be, I mean, just…

Jack L. Kopnisky

It will be Sterling.

Louis J. Cappelli

It will be Sterling.

Jack L. Kopnisky

STL.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Got you, okay. And then finally Lou, I wondered if you could just talk about how – maybe your future outlook for the banking environment impact your decision to kind of combine forces here at this point?

Louis J. Cappelli

We believe that this is the right transaction for the Sterling, its shareholder and its clients. The merger is an opportunity to bring together two outstanding institutions, their complementary sets of products, shared culture, superior service and create a nearly $7 billion asset company, which virtually doubles the size of Sterling and almost the same for our new partner. and it has the potential to deliver very strong results for the shareholders. We are very, very excited and enthusiastic about putting these two companies together and feel very confident that it’s going to be a huge success.

Travis Lan – Keefe, Bruyette & Woods, Inc.

Thank you very much, gentlemen.

Operator

Thank you. Our next question is from Matthew Kelley from Sterne Agee. Please go ahead.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Yeah. Just staying on that question there, question for Lou as well, just where there any other interested parties, and how was this shop? Was it negotiated specifically with Provident, anything you can elaborate on there?

Louis J. Cappelli

This was negotiated directly with Provident.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Was it shop to a broader audience or something you've been working on for a while, just kind of direct negotiations?

Louis J. Cappelli

It was direct negotiation with Provident.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Go you, okay. Just a question for Luis, when the deal closes end of the year, for Q1 of the next year, what do you see the margins shaping out at with the accretable yield baked in?

Luis Massiani

So that’s a good question. so we’re going to have – Jack alluded to sort of kind of A plus B basis what the yield turns out to be and we actually have, we’ve work to do, Matt, to sort of understand exactly sort of how that loan portfolio is going to come and so forth. But we expect that this is going to be sort of 366 without the purchase accounting adjustments, give or take. So you can expect sort of something closer to 4% for the accretable yield and that’s just going to be a factor of sort of how quickly, sort of the Sterling portfolio has acquired, sort of pays down and so forth. So as we finalize the purchase accounting adjustments, we’ll obviously get a much finer points on exactly how – sort of how those marks will flow through back into income. But it will be pretty substantial in that regard.

John W. Tietjen

This is John Tietjen. I would just point out that there is some seasonality in our loan portfolio so that first quarter yields aren’t always representative of what they’ll be for the rest of the year.

Matthew B. Kelley – Sterne Agee & Leach Inc.

How much on your stand-alone operation? Has that impacted the margin historically?

John W. Tietjen

If you looked at our performance on a historic basis, you would find that in the first quarter, it tends to be a down quarter from the fourth quarter as far as volume and yield is concerned. And as we go through the year, it tends to increase.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Okay, got you. And then just looking at the share count, so the 10-K has 30.956 million shares for Sterling times the exchange ratio, which is 39.1. Will there be any gross ups in the actual deal value and shares issued for the SERP retirement plans, option plans et cetera. I mean, what’s the actual shares issued that we’ll see in the S-4?

Jack L. Kopnisky

Not in the – for the SERP and the retirement plans, no. There is a minor sort of a – so there is minor options and restricted stock that will get the 1.2. But if you take our share count plus 39 that you just sort of alluded to, that will get you pretty close to the number that will be sort of in the S-4.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Okay. And for the SERP and retirement plans that’s phased into the deal charge of $33 million or…

Jack L. Kopnisky

Well, the SERP and the deal – so the SERP is essentially fully – liability for the SERP is sort of fully accounted for sort of in Sterling’s financials today. So we’ve gone through it with, sort of with our folks and external advisors. We’re confident that that liability is sort of properly reported on the books and there shouldn’t be a fair value impact there. So when you talk about the SERP, it’s really just sort of catching out the SERP. The liability is there already, so there won’t be a sort of an impact on the fair value of the net assets acquired because of the SERP. What there will be is a decrease in the assets as the SERP is cash out.

Matthew B. Kelley – Sterne Agee & Leach Inc.

And the defined benefit plan?

Jack L. Kopnisky

The defined benefit plan is going to be – we’re going to move to a hard freeze and that’s going to happen sort of shortly prior or immediately prior to the transaction. So that will just be similar to our program which we froze in 2006. We’ll just have a frozen program and sort of that will continue as it goes. Sort of the liability – savings with the SERP, it’s sort of properly accounted for and we do not anticipate any, sort of any fair value adjustments in that regard.

Matthew B. Kelley – Sterne Agee & Leach Inc.

Okay. Great, thank you.

Operator

Thank you. Our next question is from Frank Barkocy from Mendon Capital. Please go ahead.

Frank J. Barkocy – Mendon Capital Advisors Corp.

Thank you. Have any decisions been made of yet regarding divesting or selling any of Sterling’s existing operations?

Luis Massiani

No. We do not intend to divest or sell any of the existing Sterling operations.

Frank J. Barkocy – Mendon Capital Advisors Corp.

Good. Thank you very much.

Luis Massiani

Sure.

Operator

Thank you. The next question is from Jon Ashe of Wellington Management. Please go ahead.

Jon C. Ashe – Wellington Management Co. LLP

Hi, good morning. Regarding the, again regarding the merger expense, can you just elaborate a little bit on the components and what type of change of control payments are involved? Thank you.

Jack L. Kopnisky

Well, there is sort of with the $33 million – sort of a portion of that is related to sort of the management contracts and change of control, substantial portion of it as well as sort of accruing for potential severance and so forth that we’ll incur on a go-forward basis. and then we have also included in there sort of our estimates of what we intend (inaudible) we talked about sort of branch closures and facility consolidations and so forth. We’re also sort of taking a view on what that’s going to cost as well as sort of technology sort of terminations and so forth.

From a management perspective, there is $11 million, give me one second to give you the exact numbers. Sorry, but from a management contract (inaudible) change of control at close, there is $11.2 million of that merger related charge that represents the sort of the change of control payments. And when we talk about sort of the other expenses I alluded to the severance and there is also a portion that goes in. As we think about how we’re going to integrate the two businesses, we’re going to have somewhere in the range of a combined basis, 450,000 square feet in the city. there is going to be sort of we anticipate that we need about 400,000 to 375,000 square feet of sort of office space. So there will be a [confident] charge to being able to sort of exit some locations, and enter new ones and so forth. So that’s also being captured in the $33 million.

Luis Massiani

Yeah. Maybe from a macro level, I think the professional fees are about $10 million severance and change of control and although people related it about $20 million.

Jack L. Kopnisky

That’s right.

Luis Massiani

And $3 million is other change of contracts, things like that. So hopefully that gives you enough of a breakdown.

Jon C. Ashe – Wellington Management Co. LLP

Thank you.

Luis Massiani

Yeah.

Operator

Thank you. We have no further questions. I will now turn the call back over to Jack Kopnisky.

Jack L. Kopnisky

Thank you very much for everyone, to everyone that has joined the call. We’re again, excited about the opportunities that come together and see a tremendous opportunity for the future. So Lou, anything?

Louis J. Cappelli

I’m fine. I’m just thrilled about this combination and excited and feel very confident that it’s going to be a huge success for all of us.

Jack L. Kopnisky

Great, thank you everyone.

Operator

Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.

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