More than a decade ago, a pair of expansion-minded competitors, Mid-State Bank & Trust and Pacific Capital Bancorp, parent of Santa Barbara Bank & Trust, rewrote the rules for the banking game.

• Simpler structures will be the name of the game. Bank of America is selling off First Republic, a longtime player in South Coast private banking, because it no longer fits with the Bank of America-Merrill Lynch combination. The expected sale of Bank of Santa Barbara (no relation to SBBT) is the direct result of Michigan-based Capitol Bancorp’s consolidation and simplification strategy.

• Doing your homework will count for a lot. In mid-June the normally sharp analysts at Keefe Bruyette & Woods upgraded Pacific Capital stock and then looked like idiots when it suspended its TARP and other dividends a couple of weeks later. Ditto many in the local media who made a big deal out of the dividend suspension and speculated wildly about what might happen on June 30. Anyone who carefully read Pacific Capital’s most recent financial statements and Securities and Exchange Commission filings would have not been surprised and would have acted with more restraint.

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