Mercantile Bancorp., in the midst of integrating two major mergers, said it would buy a $551 million-asset bank in central Arkansas. The $120 million stock acquisition of Horizon Bancorp of Arkadelphia, Ark., would boost Mercantile's asset size to $1.8 billion in the state and would expand its central Arkansas presence. Mercantile entered Arkansas in May 1995 with the acquisition of $1.3 billion-asset TCBankshares of Little Rock. The Horizon acquisition, expected to close in the first quarter of 1998, would give Mercantile at least third-place market share in four communities, including fast growing Hot Springs. Horizon would be essentially a fill-in acquisition for the $30 billion- asset Mercantile, but the plans come on the heels of two large deals in the company's hometown of St. Louis. Mercantile closed the acquisition of $3.2 billion-asset Mark Twain Bancshares in April, and completed another deal to buy $7.8 billion-asset Roosevelt Financial Group in July. The two acquisitions are being folded into Mercantile faster than expected, according to bank officials, and they earlier hinted to analysts that they would continue to consider deals. "They had suggested they would be 'judiciously opportunistic' if something comes along," said Joseph Roberto, an analyst with Keefe, Bruyette & Woods Inc. "I guess this fits the bill." Relative to its size, the effect of the deal on Mercantile's earnings should be immaterial, Mr. Roberto said. The company said it would issue 1.7 million shares of its stock and account for the deal as a pooling of interest. Mercantile may repurchase up to 170,000 shares of its stock in conjunction with the merger.