First Savings Bancorp and First Bancorp directors sweetened the deal for shareholders, but a dissident First Savings shareholder expects the proposed merger to fail.

Troy-based First Bancorp announced in a press release that the merger agreement with First Savings Bancorp Inc., holding company for First Savings Bank of Moore County, had been amended to state that First Bancorp’s expected dividend rate after the merger would be 88 cents per share instead of the 76 cents per share previously announced.

The equivalent dividend rate to First Savings shareholders would be $1.10, up from the previously announced 95 cents, and 6 cents more per year than First Savings shareholders now receive.

"We are very excited about the dividend," First Savings President John Burns said, "and we expect First Savings shareholders will be excited."

The agreement announced in December between the two institutions would have reduced First Savings’ dividend from $1.04 to about 95 cents, based on an exchange ratio of 1.2468 First Bank shares for each First Savings share.

A group of dissident First Savings shareholders protested the proposed merger on grounds it would reduce their shares’ book value and bring up First Bank’s, as well as reduce their dividends while improving First Bank shareholders’ dividends.

A joint proxy statement won’t be out until April — and now that merger agreement has been further amended, the statement will be further delayed. Shareholders of both financial institutions will then have an opportunity to vote the proposal up or down.

But dissident First Savings shareholder Bob Rhoads said, "All they’re doing is giving the shareholders their money back. They could double the dividend if they wanted. They can do just about anything they want. They’re afraid the merger won’t go through, and they’re trying to do anything they can to promote it."

Rhoads thinks the merger will be voted down by First Savings shareholders. He said the Committee to Protect First Savings Shareholder Value is obtaining independent opinions as to the fairness to shareholders of the proposed deal.

First Bank, which has branches in 14 counties, would be the surviving bank if the merger with First Savings goes through. First Savings, with all of its six offices in Moore County, is now owned and operated by Moore County residents.

If the merger takes place, the home office of the combined bank would be in Troy, and seven of First Savings’ bank directors would go onto the joint board. Burns and First Savings Chairman and former CEO Bill Samuels would each get an estimated $1 million in "golden parachute" payments, according to statements released earlier by merger analysts.

"We’re going to do everything possible to get shareholders to defeat this proposal," Rhoads said.

A retired stockbroker who lives in Pinehurst, he said a "much fairer" price for the stock would be based on a 1.7 exchange ratio. But, he added, "I don’t see them redoing their agreement at this time."

First Bank Chief Financial Officer Eric Credle declined to comment on Rhoads’ statements, citing the advice of an attorney not to elaborate on anything, but to "stick to facts."

Recently, First Savings announced a 26-cent quarterly cash dividend, which some say may be the highest in the bank’s history.

First Bank’s recently announced quarterly cash dividend was 13 cents a share, an increase over the previous dividend rate of 11.333 cents a share.

The merger partners at First Savings say they want to get First Bank’s technological expertise and skills for improved customer service in the future.