BankUnited buys Herald National for $71M

Herald National Bank, a small private bank with an office in Melville, is being acquired by Florida-based BankUnited Inc. in a $71.4-million deal.

Herald National has branches in Manhattan and Brooklyn, in addition to the Melville office. BankUnited has 80 branches in Florida.

BankUnited said Randy Nielsen, the chairman and chief executive of Herald National, will remain in his job after the transaction closes later this year.

In May 2009, former North Fork Bancorp head John Kanas, along with several high-profile investors, bought BankUnited, then a failing Coral Gables, Fla.-based bank. Kanas became BankUnited's chairman and chief executive.

American Banker on Friday reported that Kanas has a noncompete pact with Capital One, which bought North Fork, meaning he will have to let Herald National operate independently until the pact expires in 2012.

The purchase has been approved by the boards of both banks, with the value of each share of Herald National set at $4.13. Herald National shareholders will receive $22.9 million in cash and the remainder in the form of 1.7 million shares of BankUnited stock.

Newsday reported in 2009 that Herald was "a private client bank, founded to serve small- and medium-sized companies, their managers and hardly anyone else." A bank official told Newsday that "the business model works . . . Herald has no bad loans, plenty of capital and is the fastest-growing new bank in the country."

Rajinder P. Singh, chief operating officer of BankUnited, said in a Friday announcement, "The acquisition of Herald is an important step toward expanding the reach of BankUnited into the New York market."