A parish in south central Louisiana has one of the fastest growing populations in the state, as well as in the nation, and bankers there are struggling to keep pace.

Lafayette Parish, whose 170,000 citizens suffered through an economic downturn a decade ago that was considered worse than Great Depression of the 1930s, is home to a handful of banks fighting over a swiftly expanding market.

Several local banks have made acquisitions recently to beef up their presence in an effort to keep out-of-town banks at bay.

Just last week MidSouth Bancorp, a $102 million-asset holding company with nine offices, signed a letter of intent to acquire $17 million-asset Sugarland Bancshares.

"We're just trying to keep pace with our rapidly growing hometown," said C.R. "Rusty" Cloutier, president of MidSouth.

According to the Census Bureau's projections, Lafaayette Parish's population will grow to 177,101 this year - up 7.5% jump from 1990. It is expected to grow by 13% - to about 187,000 - by the year 2000.

Bankers attribute the economic upswing to the area's conscious shift away from its previous dependence on the oil industry.

Since the oil industry collapse in the mid-1980s and the ensuing numerous local bank failures, the county has diversified through new businesses such as retail and health care.

"It was miserable," said Jerry G. Reaux, executive vice president of the $50 million-asset Bank of Lafayette. "But amazingly enough we have recovered from all of that. The last two years have been really good."

Mr. Reaux's bank is involved in one of the largest deals of late - it will merge with the $228 million-asset LBA Savings Bank.

The deal, expected to be completed by the second quarter of 1995, will make the new LBA Bank the largest financial institution based in Lafayette.

These local bankers can hear the out-of-towners knocking. Several nearby institutions recently have bought branches of failed banks in Lafayette, but for a princely sum. One bank just paid a 16% premium for local deposits, which four years ago fetched premiums of just 1% to 2%.

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