BankUnited gets nod to buy Herald National Bank

* Expects acquisition to be completed on Feb. 29

* Says thrift unit gets OCC approval to become national bank

Feb 22 (Reuters) - BankUnited Inc's plans to enter the New York market got a shot in the arm after regulators gave it their approval to buy Herald National Bank.

In June, Florida-based BankUnited agreed to buy the tiny New York lender for $72 million, in what was its first acquisition move since the company's $800 million IPO in January 2011.

The acquisition, however, faced trouble a month after the announcement, when BankUnited Chief Executive John Kanas was sued by his former employer Capital One Financial Corp for violating his non-compete agreement through the deal -- a charge denied by Kanas.

The approval from the Federal Reserve Bank of Atlanta and the Office of the Comptroller of the Currency comes as a major boost for the lender, which till only a month back was scouting for buyers.

The sale process was abruptly called off by its private equity owners after it drew offers below expectations.

BankUnited, which was taken over and recapitalized by private investors like Wilbur Ross's WL Ross & Co, Blackstone Group LP and Carlyle Group during the financial crisis, also said its wholly owned thrift subsidiary has received OCC approval to become a national bank.

The holding company expects the acquisition and the bank conversion to be completed on Feb. 29.

Shares of the company closed at $23.71 on Wednesday on the New York Stock Exchange.