BankUnited's Kanas: Confident Herald Buy Will Proceed

BankUnited Inc. (BKU) Chairman and Chief Executive John Kanas said Tuesday he is confident the Florida bank's acquisition of Herald National Bank (HNB) of New York will proceed despite a challenge from Capital One Financial Corp. (COF).

McLean, Va.-based Capital One filed suit in federal court in Virginia earlier this month, alleging Kanas and John Bohlsen, BankUnited's chief lending officer, violated a noncompete agreement. Both had been executives with Capital One before joining BankUnited.

Bohlsen and Kanas "have been fully compliant" with the obligations set forth in the separation agreement, Kanas said in his statement Tuesday. "The Herald transaction has been structured to fall squarely within an explicit exception to the non-compete provisions in our agreements."

"We are very confident ... we will prevail in this lawsuit and that our proposed transaction with Herald and our expansion strategy in the Northeast will proceed as planned," Kanas said.

"We fully support legitimate competition in the banking industry, but we expect non-compete agreements negotiated in good faith to be honored in full," a Capital One spokeswoman said earlier this month. On Tuesday, the bank declined to comment further.

Kanas and Bohlsen joined Capital One when the bank in 2006 bought their employer North Fork Bancorp, which Kanas served as chairman and chief executive.

Kanas led a group of private-equity investors who bought BankUnited in 2009, after it failed and was auctioned off by the Federal Deposit Insurance Corp.

-By Matthias Rieker, Dow Jones Newswires; 212-416-2471; [e-mail]