8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
MARCH 31, 2013
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware	0-13368		37-1103704
(State of other jurisdiction	(Commission File Number)		(IRS Employer
of incorporation)			Identification No.)
1421 CHARLESTON AVENUE
MATTOON, IL		61938
(Address of principal executive offices)		(Zip Code)
(217) 234-7454
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

Incorporated by reference is the quarterly stockholder report issued by the Registrant on April 24, 2013, attached as Exhibit 99, providing information concerning the Registrant's financial statements and operations as of March 31, 2013.

Item 9.01. Financial Statements and Exhibits

(d)  Exhibits

Exhibit 99 - Quarterly stockholder report as of and for the period ending March 31, 2013.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

                                                            FIRST MID-ILLINOIS BANCSHARES, INC.

Dated: April 24, 2013

                                                            William S. Rowland

                                                            Chairman and Chief Executive Officer

INDEX TO EXHIBITS

Exhibit
Number	Description
99	Quarterly Report to Stockholders

EX-99

Exhibit 99

[GRAPHIC OMITTED][GRAPHIC OMITTED]

We have started 2013 well with an increase in earnings, a stronger capital position, and continued good asset quality ratios. Net income for the first quarter of 2013 was $3,528,000 compared to $3,390,000 for the first quarter of 2012. Diluted earnings per share was the same for both periods at $.41 per share.

The increase in earnings was the result of greater net interest income with growth in the balance sheet (loans, investments, and deposits) over the past year, a reduction in credit costs with further improvement in our level of non-performing assets, growth in mortgage banking revenue, and operating expenses which were nearly the same as 2012.

Net interest income for the first quarter of 2013 amounted to $12.2 million compared to $12.1 million for the first quarter of last year. Since March 31, 2012, loan balances increased $62 million, investment balances increased $52 million, and deposit balances increased $77 million. The balance sheet shows a decline in total loan balances since year-end, as we have experienced seasonal paydowns in agricultural loans. The growth in the balance sheet over the past year has offset a decline in the net interest margin as the margin for the first quarter was 3.40% compared to 3.50% for the first quarter last year on a tax-equivalent basis. I have mentioned in the past that the flat yield curve and historically low level of interest rates provide an environment that squeezes the spread between yields obtained on assets and those paid on liabilities. This has been the case for many banking companies for several quarters. We monitor and manage our margin closely. It has held up longer than many competitors but the prolonged period of low rates is starting to impact our profitability. Given the environment, I am pleased with the increase in overall net interest income for the first quarter.

I mentioned that our credit costs were lower including the provision for loan losses which was $135,000 less than the first quarter of last year. Our total non-performing assets (non-performing loans and other real estate owned) declined to $9.4 million at March 31, 2013 compared to $11.0 million on March 31, 2012. Our net loan charge-offs for the first quarter were $272,000 compared to $442,000 for the first quarter of last year. The improvement in these two metrics has allowed us to reduce the provision for loan losses. We continue to have a strong coverage ratio of allowance for loan losses to the level of non-accrual loans of 147%.

Total non-interest income of $4.6 million was virtually the same as the first quarter last year. Mortgage banking income increased from $236,000 for the first quarter of 2012 to $286,000 for the first quarter of this year as we continued to have greater refinance activity and an increase in new purchase activity. Revenues from our trust and brokerage areas also increased from the first quarter of last year while insurance revenues declined due to lower contingency income received from carriers based upon claims experience.

Another contributing factor to performance for the first quarter of 2012 was keeping total operating expenses at the same level as the first quarter of 2012. Despite increased regulatory and operating costs, total non-interest expense for the first quarter was $10.6 million, the same as the first quarter of last year.

With the increase in earnings, our capital ratios have also increased and remain quite strong. At March 31, 2012, our Tier 1 Capital ratio was 14.89% which is well in excess of the regulatory minimums to be considered well-capitalized. This capital position provides First Mid the ability to respond to opportunities that may lie ahead.

We continue to refresh and implement our Excellence 2015 plan. This initiative has as its core objective broad-based initiatives that will benefit all of our stakeholders before April 2015, the 150^th anniversary of First Mid-Illinois Bank & Trust, N.A. During the quarter, we finalized plans to begin an enterprise risk management project to ensure that our risk management systems in the various business lines are aligned to our enterprise-wide strategy and that we have the proper forward-looking measurements to identify and manage risk proactively. We also announced plans to add a new facility in Decatur to further serve our customers in that region and we are placing more emphasis on communication between business lines to ensure our customers have the opportunity to learn about the full complement of First Mid's products and services. We are pleased with the progress we are making through the Excellence 2015 initiative.

We have seen some glimmers of positivity with slight economic growth and a high but stable unemployment rate over the past few months. However, many economists continue to predict sluggish economic conditions for 2013 as businesses and consumers are hesitant to invest capital for new projects in this environment. Combined with the flat yield curve I mentioned previously, this continues to make for a difficult environment for bank profitability.

We have a plan that is working, a strong team that is incredibly committed to this institution and all of our stakeholders, and we have strategic strengths that give us confidence that, despite the headwinds that our industry faces, we are well-positioned for the years to come.

Thank you for your continued support of First Mid-Illinois Bancshares, Inc.

Very Truly Yours,

William S. Rowland

Chairman and Chief Executive Officer

April 24, 2013

First Mid-Illinois Bancshares, Inc.

1421 Charleston Avenue

Mattoon, Illinois 61938

217-234-7454

www.firstmid.com

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)	March 31			Dec 31
	2013			2012
Assets
Cash and due from banks	$	27,135		$	38,110
Federal funds sold and other interest-bearing deposits	40,069			44,602
Certificates of deposit investments	5,424			6,665
Investment securities:
Available-for-sale, at fair value	535,120			508,309
Loans	902,965			911,065
Less allowance for loan losses	(11,984		)	(11,776		)
Net loans	890,981			899,289
Premises and equipment, net	29,268			29,670
Goodwill, net	25,753			25,753
Intangible assets, net	2,991			3,161
Other assets	20,972			22,473
Total assets	$	1,577,713		$	1,578,032
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	251,233		$	263,838
Interest bearing	1,058,936			1,010,227
Total deposits	1,310,169			1,274,065
Repurchase agreements with customers	76,372			113,484
Other borrowings	5,000			5,000
Junior subordinated debentures	20,620			20,620
Other liabilities	8,453			8,176
Total liabilities	1,420,614			1,421,345
Stockholders’ Equity:
Preferred stock (no par value, authorized 1,000,000 shares;
issued 10,427 shares in 2013 and 2012)	52,035			52,035
Common stock ($4 par value; authorized 18,000,000 shares;
issued 7,686,477 shares in 2013 and 7,682,535 shares in 2012)	30,813			30,730
Additional paid-in capital	32,227			31,685
Retained earnings	81,410			78,986
Deferred compensation	2,730			2,953
Accumulated other comprehensive income (loss)	3,233			4,544
Treasury stock at cost, 1,754,182 shares in 2013 and
and 1,711,646 in 2012	(45,349		)	(44,246		)
Total stockholders’ equity	157,099			156,687
Total liabilities and stockholders’ equity	$	1,577,713		$	1,578,032

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
For the period ended March 31,	2013		2012
Interest income:
Interest and fees on loans	$	10,435	$	10,960
Interest on investment securities	2,741		2,952
Interest on certificates of deposit	8		18
Interest on federal funds sold & other deposits	18		18
Total interest income	13,202		13,948
Interest expense:
Interest on deposits	796		1,427
Interest on repurchase agreements with customers	15		45
Interest on other borrowings	57		277
Interest on subordinated debt	130		146
Total interest expense	998		1,895
Net interest income	12,204		12,053
Provision for loan losses	480		615
Net interest income after provision for loan losses	11,724		11,438
Non-interest income:
Trust revenues	893		860
Brokerage commissions	171		142
Insurance commissions	486		647
Services charges	1,140		1,101
Securities gains (losses), net	353		384
Mortgage banking revenues	286		236
ATM / debit card revenue	883		879
Other	338		331
Total non-interest income	4,550		4,580
Non-interest expense:
Salaries and employee benefits	5,797		5,673
Net occupancy and equipment expense	2,043		2,010
FDIC insurance	222		234
Amortization of intangible assets	170		245
Legal and professional expense	548		611
Other	1,832		1,844
Total non-interest expense	10,612		10,617
Income before income taxes	5,662		5,401
Income taxes	2,134		2,011
Net income	$	3,528	$	3,390
Per Share Information
For the period ended March 31,	2013		2012
Basic earnings per common share	$	0.41	$	0.41
Diluted earnings per common share	$	0.41	$	0.41
Book value per share at Mar 31	$	17.71	$	16.58
OTCBB market price of stock at Mar 31	$	23.95	$	23.00

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands)
For the period ended March 31,	2013			2012
Balance at beginning of period	$	156,687		$	140,967
Net income	3,528			3,390
Dividends on preferred stock and common stock	(6,778		)	(5,989		)
Issuance of preferred and common stock	463			665
Purchase of treasury stock	(1,158		)	(617		)
Deferred compensation and other adjustments	(6		)	72
Changes in accumulated other comprehensive income	(1,311		)	28
Balance at end of period	$	157,099		$	143,566

CONSOLIDATED CAPITAL RATIOS
Primary Capital Measurements	2013		2012
For the period ended March 31,
Leverage ratio	9.78	%	9.18	%
Tier 1 capital to risk-weighted assets	14.89	%	13.85	%
Total capital to risk-weighted assets	16.06	%	14.99	%