Mercantile Bancorp., which announced it would buy a sizable thrift in its hometown of St. Louis, was the only major bank to stir the calm of holiday trading last week.

Since announcing Tuesday that it was purchasing $9 billion-asset Roosevelt Financial Group, $18.2 billion-asset Mercantile saw its shares gain just 63 cents to $50.125 as of Friday's close. Over the week, Roosevelt's shares rose just 0.14%, to $20.625.

Banks ended a week of light trading off a bit. The S&P Bank index lost 0.06% to 468.45 while the Nasdaq bank index gained 0.16% to 1,267.4. The Dow Jones industrial average was up 0.22% to 6,560.91.

"The banks are holding up very well in the market, and the mood is still very positive among the banks," said Charles Johnson, head of trading at Blaylock & Associates. "There is some profit taking, but that just presents some opportunities to buy shares in a more favorable way than usual. The first quarter of 1997 will be a good one."

The news of the Mercantile-Roosevelt deal surprised some investors, who suspected St. Louis-based Magna Group Inc. - another active midwestern acquirer - to be a more likely purchaser of Roosevelt. The news of Mercantile's purchase boosted Magna's shares to $28.625.

"A merger with Roosevelt, which would have been a merger of equals, would have doubled Magna's size in Missouri," said Gerard Cronin, an equity analyst with John Hancock Funds.

In the past three years, Magna, a $6.6 billion-asset institution, has acquired 44 banks throughout Missouri and Illinois and recently expanded its reach into Iowa with its purchase of Homeland Bankshares in Waterloo.

"The potential risk is that Missouri banks who want to remain independent feel compelled to acquire under the assumption that size alone will help them do that," said Mr. Cronin.

"The risk in doing that is that it dilutes the ownership position.

G. Thomas Andes, Magna's chief executive, said his bank will continue to grow through acquisitions, and maintained the bank's preference to remain independent for the time being.

"Our strategy is not just to get bigger, but to get better," he said."

Several analysts said several banks outside of Missouri - including Banc One Corp., First Bank System, and Norwest Corp. - are possible purchasers of Magna.

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