UnionBanCal Could See Higher Bid: Analysts

UnionBanCal has $60.5 billion in assets and 337 branches along the West Coast. It holds the sixth largest deposit market share in the state of California, according to BMO Capital Markets.

Through its conservative lending standards, UnionBanCal has been able to avoid many of the problems associated with residential mortgages and construction loans that other mortgage-heavy banks in California like Washington Mutual(WM Quote), Countrywide Financial and IndyMac Bancorp have struggled with, analysts say.

WaMu, technically headquartered in Seattle, resorted to a $7.2 billion capital infusion led by TPG and other large institutional investors this spring. Countrywide Financial was acquired by Bank of America(BAC Quote) in early July, while just a week later IndyMac was seized by regulators after it was no longer considered well-capitalized.

At the end of the second quarter, nonperforming assets to total assets were 0.37% last quarter, while net charge-offs totaled 0.28% to average loans. UnionBanCal's Tier-1 capital level was at 7.96%, according to its Web site.

The Bank of Tokyo-Mitsubishi UFJ has owned a majority stake in UnionBanCal since 1996, according to its own press release regarding the offer. It says the decision to acquire the remaining outstanding shares is a "first step of our growth strategies in the United States, and we will achieve greater management flexibility and aim to further strengthen our presence in the United States."

The tender offer this week was Mitsubishi's second try at buying its remaining stake in UnionBanCal. The company proposed in April to buy the shares at $58 a share, which was rejected at the time.