First Citizens Bancshares of Raleigh gussied up its offer to acquire North Carolina's largest independent thrift after its initial unsolicited takeover attempt was rejected.

First Citizens hiked its original bid of $30.50 a share for RS Financial Corp.'s stock to $34.51 a share. The deal would be worth about $96 million.

RS Financial, an $810 million-asset company also based in Raleigh, responded that it is continuing the process that it began on March 24 - when it rejected First Citizens's initial offer - to explore a merger with other financial institutions, including First Citizens.

"That process is not complete," a press release said. "RS Financial plans no comment or announcement until after the completion of the process."

The revamped bid from First Citizens expires June 9.

Stanley E. Wright, president and chief executive of RS Financial, would not say when his company will respond. He also would not comment on whether he has received merger offers from other financial institutions.

Also, in a filing with the Securities and Exchange Commission, First Citizens said it would make a commitment to retain RS Financial employees if the merger occurs, and it would place four non-employee board members of RS Financial on the boards of both First Citizens' holding company and lead bank.

Observers said that the new offering price is probably still not high enough.

"The way the stock is trading, I think investors have decided that the offer is not adequate," said Merrill H. Ross, equity analyst at Wheat First Butcher Singer in Richmond, Va. "There seems to be an indication that people feel there is more value than the offer suggests."

RS Financial stock has been trading in the $34-to-$35 range in recent weeks, up slightly after the new offer was announced, but not up enough to suggest that investors believe the deal with First Citizens will go through, observers said.

The First Citizens offer consists of a choice of all cash, stock, or unsecured subordinated debentures. In a stock deal, 0.74 share of First Citizens would be exchanged for each share of RS Financial.

The largest shareholder of RS Financial is in fact First Citizens and its principal owners, the Frank B. Holding family. Mr. Holding, who is executive vice chairman of First Citizens, controls 9.5% of RS Financial stock. Those holdings include 62,000 shares bought at $30.75 a share, mostly after the initial merger offer of $30.50 a share.

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