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):
JULY 22, 2014
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 report to stockholders issued by First Mid-Illinois Bancshares, Inc. (the "Company") on July 24, 2014, attached as Exhibit 99, providing information concerning the Company's financial statements and operations as of June 30, 2014.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 22, 2014, Benjamin I. Lumpkin informed the Board of Directors (the “Board of Directors”) of First Mid-Illinois Bancshares, Inc. (the “Company”) of his decision to resign, effective immediately, as director the Company and as a member of the Audit Committee and the Compensation Committee of the Board of Directors.

On July 22, 2014, the Board of Directors adopted a resolution increasing the size of the Board of Directors from seven (7) directors to eight (8) directors and appointed Robert S. Cook and James E. Zimmer to serve as directors of the Company to fill the vacancy created by Mr. Lumpkin’s resignation and by the increase in the size of the Board of Directors.

Mr. Cook was appointed to serve until the expiration of the current Class III term in 2016, or until his successor is duly elected and qualified, unless he shall earlier resign or be removed. The Board of Directors has determined that Mr. Cook will serve on the Audit Committee and the Compensation Committee of the Board of Directors. Mr. Cook will be compensated for his service as a director under the Company’s standard compensation program for non-employee directors. There is no arrangement or understanding between Mr. Cook and any other person pursuant to which Mr. Cook was selected as a director and there are no related party transactions involving Mr. Cook that are reportable under Item 404(a) of Regulation S-K.

Mr. Zimmer was appointed to serve until the expiration of the current Class III term in 2016, or until his successor is duly elected and qualified, unless he shall earlier resign or be removed. The Board of Directors has determined that Mr. Zimmer will serve on the Audit Committee and the Compensation Committee of the Board of Directors. Mr. Zimmer will be compensated for his service as a director under the Company’s standard compensation program for non-employee directors. There is no arrangement or understanding between Mr. Zimmer and any other person pursuant to which Mr. Zimmer was selected as a director and there are no related party transactions involving Mr. Zimmer that are reportable under Item 404(a) of Regulation S-K.

Item 9.01.     Financial Statements and Exhibits.

(d)  Exhibits

Exhibit 99.1     Quarterly Report to Stockholders as of and for the period ending June 30, 2014

Exhibit 99.2    Press Release dated July 24, 2014

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: July 24, 2014

Joseph R. Dively

Chairman and Chief Executive Officer

INDEX TO EXHIBITS

Exhibit
Number	Description
99.1	Quarterly Report to Stockholders
99.2	Press Release dated July 24, 2014

EX-99.1

Exhibit 99.1

QUARTERLY REPORT TO STOCKHOLDERS

2014 SECOND QUARTER

First Mid Announces:

* NASDAQ Global Exchange Listing Begins

* Record Quarterly Earnings and Earnings Per Share

* Strength in Asset Quality Metrics

* Trust and Brokerage Assets Top $1 Billion

• Community Banking and SBA Lending Awards

I mentioned in our last quarterly report that First Mid-Illinois Bancshares, Inc. had been approved for listing on The NASDAQ Stock Market LLC (“NASDAQ”) under the ticker symbol “FMBH”. First Mid did begin trading on NASDAQ on May 12, 2014. This marked a historic event for the Company and another step in our ongoing strategy to enhance long-term shareholder value. We believe that utilizing this platform can increase the universe of potential investors and liquidity in the stock. We learned that our stock was added to the Russell MicroCap Index at the end of June. The Russell MicroCap is comprised of the smallest 1,000 stocks in the Russell 2,000 Index plus the next smallest 1,000 stocks.

The primary tenet of enhancing shareholder value is ensuring that our financial performance continues to be strong. We have completed the first half of 2014 and I am pleased to report that the financial results for First Mid were solid with an increase in earnings and earnings per share, strong asset quality ratios, and an increase in book value per share. Net income for the first six months of 2014 was $7,636,000 compared to $7,193,000 for the same period last year. Diluted earnings per share were $.91 per share for the first six months of 2014 compared to $.84 for the first six months of 2013. For the second quarter of 2014, net income was $4,029,000 compared to $3,665,000 for the second quarter of 2013, while diluted earnings per share for the second quarter 2014 was $.48 compared to $.43 for the same period last year. Net income for the second quarter of 2014 was the highest that we have ever had for a quarter. The quarterly performance included one-time security gains and was strong from an operating perspective.

Based upon the strength of our performance, the Board of Directors increased the common stock dividend paid for the first half of 2014. Our common stock dividends paid through June 30, 2014 were $.26 per share compared to $.21 for the same period last year.

Year-to-date net income increased due to higher net interest income with growth in loans and an increase in the net interest margin, lower provision for loan loss expense with a reduction in net charge-offs and decreased non-performing assets, and increased fee income. Comparing the second quarter of 2014 to the second quarter last year, net income increased due to greater net interest income, reduced provision expense, and higher gains recognized on the sale of securities.

Year-to-date net interest income totaled $25.4 million compared to $24.5 million for the same period last year while the second quarter was $12.8 million compared to $12.3 million for the second quarter of 2013. Loan balances have increased over the past year with total loans at $1.02 billion as of June 30, 2014 compared to $983 million at year-end 2013 and $916 million as of June 30, 2013. The growth in loans has been a mixture of commercial operating, commercial real estate, and agricultural real estate across our market area. Deposit balances have also increased since year-end at $1.291 billion as of June 30, 2014 compared to $1.288 billion at December 31, 2013 and $1.271 billion at June 30, 2013. With changing the mix of balance sheet assets from investments to higher-yielding loans and maintaining our low deposit costs, we continue to see an improvement in the net interest margin. The year-to-date net interest margin on a tax equivalent basis was 3.53% for the first six months of 2014 compared to 3.42% for the same period in 2013. The quarterly trend in net interest margin was also positive as the margin for the second quarter of 2014 was 3.54% compared to 3.44% for the second quarter of 2013.

Our year-to-date provision for loan losses declined to $451,000 for the first six months of 2014 compared to $732,000 for the first six months of 2013 while the provision for the second quarter of 2014 was $128,000 compared to $252,000 for the second quarter of 2013. During the first half of 2014, our net charge-offs were $19,000 compared to $377,000 for the same period last year. Also, our non-performing loans and other real estate owned declined to $5.2 million at June 30, 2014 compared to $7.0 million at December 31, 2013 and $7.8 million at June 30, 2013. The continued positive trend in these two metrics allowed us to reduce the provision for loan losses in 2014. We also continue to have a strong coverage ratio of the allowance for loan losses to the level of non-performing loans of 283% as of June 30, 2014.

Non-interest income for the first six months of 2014 was $9.5 million as compared to $9.3 million for the same period last year. Non-interest income for the second quarter of 2014 was $5.0 million as compared to $4.7 million for the second quarter of 2013. Year-to-date revenues from the trust and wealth management area were $176,000 higher than the first six months of last year as we had greater revenue from our retirement services area and higher brokerage fees. We reached a significant milestone during the second quarter as total trust and brokerage assets reached $1 billion. Fees from electronic services were $145,000 greater than last year as we have seen an increase in the number of electronic transactions. The quarterly trends in revenue are similar to the year-to-date comparisons. The increases in revenue offset the decline in mortgage banking revenue that we have experienced as refinances have slowed with higher interest rates. Year-to-date mortgage banking revenue is $335,000 lower than last year. As with many banks, we expected mortgage revenues would decline from their peak and we are pleased that the strength and diversity of our revenue sources have offset this decline.

Operating expenses for the first six months of 2014 were $22.2 million compared to $21.5 million for the first six months of last year and operating expenses for the second quarter of 2014 were $11.2 million compared to $10.9 million for the second quarter of 2013. Year-to-date salaries and benefits expense increased by $338,000 from the first six months of 2013. Total occupancy costs were $118,000 higher for the first six months of 2014 than the same period last year primarily due to higher building maintenance expenses from weather related costs. Other expenses included NASDAQ listing fee expenses during the second quarter of 2014.

Our regulatory capital ratios remain strong and in excess of the regulatory minimums to be considered well-capitalized. Each of our four regulatory capital ratios increased during the second quarter and were higher at June 30, 2014 compared to December 31, 2013. Our Tier 1 Capital and Total Capital Ratios at June 30, 2014 were slightly below last June primarily due to an increase in risk-weighted assets (which is the denominator of these ratios) due to the growth in loan balances that have a higher capital requirement. I mentioned that our book value per share also increased and was $18.08 at June 30, 2014 compared to $16.54 at year-end and $16.27 last June.

During the second quarter, First Mid received some acknowledgments that are noteworthy and we made a significant addition to our management team. American Banker Magazine ranked First Mid-Illinois Bank and Trust, N.A. as one of the Top 200 community banks in the United States based upon our financial performance. In addition, First Mid-Illinois Bank and Trust, N.A. was recently named the Community Lender of the Year by the U.S. Small Business Administration’s Illinois District Office. Each year the Illinois District Office honors small businesses and small business advocates for their contributions to Illinois’ economy and society. We were honored to receive this award. Also during the quarter, we added a professional to further strengthen our management team. Danielle Niebrugge was hired as Senior Vice-President & Director of Human Resources. Danielle brings eighteen years of experience in human resource and employee benefit management to the company and we are pleased to add someone with her expertise and passion to our exceptional team.

Thank you for your continued support of First Mid-Illinois Bancshares, Inc. and please contact me if you should have any questions.

Sincerely,

Joseph R. Dively

Chairman and Chief Executive Officer

217-258-9520

jdively@firstmid.com

July 24, 2014

Second Quarter 2014 Financial Results
FIRST MID-ILLINOIS BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)	(unaudited)						(unaudited)
	June 30,			December 31			June 30,
	2014			2013			2013
Assets
Cash and cash equivalents	$	57,535		$	65,102		$	31,865
Investment securities	439,190			488,724			535,827
Loans (including loans held for sale)	1,022,251			982,804			915,813
Less allowance for loan losses	(13,681		)	(13,249		)	(12,131		)
Net loans	1,008,570			969,555			903,682
Premises and equipment, net	27,868			28,578			29,094
Goodwill and intangibles, net	27,915			28,240			28,573
Other assets	21,774			25,299			26,074
Total assets	$	1,582,852		$	1,605,498		$	1,555,115
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	226,544		$	235,448		$	231,526
Interest bearing	1,064,353			1,052,168			1,039,608
Total deposits	1,290,897			1,287,616			1,271,134
Repurchase agreements with customers	95,159			119,187			94,694
Other borrowings	10,000			20,000			12,500
Junior subordinated debentures	20,620			20,620			20,620
Other liabilities	7,552			8,694			7,220
Total liabilities	1,424,228			1,456,117			1,406,168
Total stockholders’ equity	158,624			149,381			148,947
Total liabilities and stockholders’ equity	$	1,582,852		$	1,605,498		$	1,555,115

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'EQUITY
(in thousands)(unaudited)
	Six months ended
	June 30,
	2014			2013
Balance at beginning of period	$	149,381		156,687
Net income	7,636			7,193
Dividends on preferred stock and common stock	(3,731		)	(3,456		)
Issuance of preferred and common stock	1,148			1,157
Purchase of treasury stock	(902		)	(1,593		)
Deferred compensation and other adjustments	10			52
Changes in accumulated other comprehensive income	5,082			(11,093		)
Balance at end of period	$	158,624		$	148,947

Second Quarter 2014 Financial Results
FIRST MID-ILLINOIS BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)(unaudited)
	Three months ended				Six months ended
	June 30,				June 30,
	2014		2013		2014		2013
Interest income:
Interest and fees on loans	$	11,039	$	10,390	$	21,851	$	20,825
Interest on investment securities	2,545		2,798		5,068		5,539
Interest on federal funds sold & other deposits	16		18		43		44
Total interest income	13,600		13,206		26,962		26,408
Interest expense:
Interest on deposits	583		664		1,192		1,460
Interest on repurchase agreements with customers	10		10		22		25
Interest on other borrowings	66		60		134		117
Interest on subordinated debt	129		131		255		261
Total interest expense	788		865		1,603		1,863
Net interest income	12,812		12,341		25,359		24,545
Provision for loan losses	128		252		451		732
Net interest income after provision for loan losses	12,684		12,089		24,908		23,813
Non-interest income:
Trust revenues	848		806		1,781		1,699
Brokerage commissions	233		218		483		389
Insurance commissions	441		410		999		896
Service charges	1,353		1,215		2,497		2,355
Securities gains (losses), net	543		482		734		835
Mortgage banking revenues	158		305		256		591
ATM / debit card revenue	1,002		947		1,975		1,830
Other	412		331		746		669
Total non-interest income	4,990		4,714		9,471		9,264
Non-interest expense:
Salaries and employee benefits	6,054		5,972		12,107		11,769
Net occupancy and equipment expense	2,114		2,102		4,263		4,145
Amortization of intangible assets	163		171		325		341
Legal and professional expense	677		614		1,239		1,162
Other	2,206		2,059		4,240		4,113
Total non-interest expense	11,214		10,918		22,174		21,530
Income before income taxes	6,460		5,885		12,205		11,547
Income taxes	2,431		2,220		4,569		4,354
Net income	$	4,029	$	3,665	$	7,636	$	7,193
Per Share Information
Basic earnings per common share	$	0.49	$	0.43	$	0.92	$	0.84
Diluted earnings per common share	$	0.48	$	0.43	$	0.91	$	0.84
Dividends per common share	$	0.26	$	0.21	$	0.26	$	0.21

Second Quarter 2014 Financial Results
FIRST MID-ILLINOIS BANCSHARES, INC.
SELECTED FINANCIAL HIGHLIGHTS	As Of
	(unaudited)				(unaudited)
	June 30,		December 31,		June 30,
	2014		2013		2013
SHARE AND PER COMMON SHARE DATA
Book value per common share	$18.08		$16.54		$16.27
Tangible book value per common share	$13.34		$11.75		$11.48
Common shares outstanding	5,896,331		5,883,780		5,954,966
Market price of stock	$20.80		$22.00		$22.29
REGULATORY CAPITAL RATIOS
Leverage ratio	10.43	%	10.12	%	9.97	%
Total capital to risk-weighted assets	15.81	%	15.58	%	16.21	%
Tier 1 capital to risk-weighted assets	14.58	%	14.37	%	15.03	%
Common equity tier 1 capital to risk weighted assets	8.11	%	7.78	%	8.01	%
Preferred stockholders' equity	$52,030,000		$52,035,000		$52,035,000
Common stockholders' equity	$106,594,000		$97,346,000		$96,912,000
ASSET QUALITY
Allowance for loan losses to non-performing loans	283.1	%	204.8	%	177.5	%
Allowance for loan losses to total loans outstanding	1.34	%	1.35	%	1.33	%
Total YTD net charge-offs (1)	$19,000		$720,000		$377,000
Total non-performing loans and other real estate owned	$5,229,000		$7,037,000		$7,849,000

	Quarter ended						Six months ended
	June 30,		March 31,		June 30,		June 30,		June 30,
(unaudited)	2014		2014		2013		2014		2013
PERFORMANCE RATIOS (1)
Return on average assets (2)	1.02	%	0.91	%	0.94	%	0.96	%	0.91	%
Return on average common equity (2)	11.30	%	9.96	%	9.69	%	10.84	%	9.45	%
Net interest margin (3)	3.54	%	3.50	%	3.44	%	3.53	%	3.42	%

(1) Financial information is provided as of the date listed except Performance Ratios and Total Net charge-offs which are as of the period ending on the date listed

(2) Annualized net income for period

(3) On a tax equivalent basis (TE), assuming a federal income tax rate of 35%

Corporate Profile

FIrst Mid-Illinois Bancshares, Inc. is the parent company of First Mid-Illinois Bank & Trust, N.A. ("First Mid Bank"), Mid-Illinois Data Services, Inc., and First Mid Insurance Group. Our mission is to satisfy the broad financial needs of our customers, provide value for our shareholders, career opportunities for employees, and contribute to the well-being of our communities. We distinguish ourselves by our actions and by our results. Our talented team is comprised of over 400 men and women who take great pride in First Mid, their work and their ability to serve our customers.

First Mid Bank was first chartered in 1865 and has since grown into a more than $1.5 billion community-focused organization that provides financial services through a network of 37 banking centers in 25 communities.

More information about the Company is available on our website at www.firstmid.com. Our stock is traded in The NASDAQ Stock Market LLC under the ticker symbol "FMBH."

Note Concerning Forward-looking Statements

This presentation may contain certain forward-looking statements, such as discussions of the Company's pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1955. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including those described in Item 1A - "Risk Factors" and other sections of the Company's Annual Report on Form 10-K and the Company's other filings with the SEC. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

First Mid-Illinois Bancshares, Inc.

1421 Charleston Avenue

Mattoon, Illinois 61938

217-234-7454

www.firstmid.com

EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE
July 24, 2014
Media Contact:  Mandy Lewis	Investor Contact: Lee Ann Perry
VP, Director of Marketing	VP, Shareholder Services
217-258-0675	217-258-0493
mlewis@firstmid.com	lperry@firstmid.com

FIRST MID-ILLINOIS BANCSHARES NAMES ROBERT COOK AND JAMES ZIMMER TO

BOARD OF DIRECTORS AND ANNOUNCES RESIGNATION OF BENJAMIN LUMPKIN

FROM THE BOARD OF DIRECTORS

MATTOON, IL - First Mid-Illinois Bancshares, Inc. (the “Company”) announced today that Robert Cook and James Zimmer have been selected to serve on the Company’s Board of Directors with their initial terms expiring in 2016. Both Cook and Zimmer will also serve on the Board of Directors of First Mid-Illinois Bank & Trust, which is a subsidiary of the Company.

Robert Cook is Managing Partner of TAR CO Investments LLC, a private investment company. Prior to joining TAR CO, Cook was a vice-president at FIG Partners, LLC, a financial services firm that serves community banks. Cook’s professional background encompasses a variety of roles in community bank capital markets including: corporate finance, institutional sales and trading, and asset management. He graduated Summa Cum Laude from University of Missouri-Columbia with a Bachelor of Science in Finance and Banking and resides in Hinsdale, Illinois.

James Zimmer is the owner of Zimmer Real Estate Properties LLC, providing residential housing for families & students. He is also the owner of Bio-Enzyme, an agricultural business focused on solutions for farmers. Beginning in 1992, Zimmer had an 18-year career with Monsanto Company, holding a variety of senior sales and marketing positions, most recently was vice-president of U.S sales & marketing leading the DEKALB & Asgrow seed businesses through the largest growth in their history and was CEO of a subsidiary, Channel Bio LLC. He is a native of Central Illinois with a background in agriculture having grown up on a 700-acre corn, wheat, and soybean farm. Zimmer holds an Executive Masters of Business Administration from Washington University and resides in Mattoon, Illinois.

The Company also announced the resignation of Board member, Benjamin Lumpkin, who has served on the Board since 2009. He is the owner of Big Toe Press, LLC, a video content production company. Joe Dively, Chairman and Chief Executive Officer stated, “While we will miss the insights that Ben brought to our Board, we wish him all the best in pursuing his professional objectives. We thank Ben for his hard work and contributions to First Mid.”

Dively also stated, “First Mid-Illinois management and shareholders will benefit from the expanded expertise in community banking, capital markets, real estate management and agriculture that Rob and Jim bring to the Board. Their diverse backgrounds and depth of experience will provide tremendous benefits to the Board and I am delighted they are members of the First Mid team.” The Company’s Board now consists of Joseph Dively, Anthony (Tony) Sparks, Gary Melvin, William Rowland, Steven Grissom, Holly Bailey, Robert Cook and Jim Zimmer.

About First Mid-Illinois Bancshares, Inc.:

First Mid-Illinois Bancshares, Inc. (“First Mid”) is the parent company of First Mid-Illinois Bank & Trust, N.A. (“First Mid Bank”), Mid-Illinois Data Services, Inc., and First Mid Insurance Group. First Mid Bank is a community bank with over $1.5 billion in assets headquartered in Mattoon, IL. First Mid offers comprehensive banking, trust and wealth management services, and insurance services. First Mid’s vision is to be the best financial institution in the region, where service is provided at a level above expectation, and to be recognized as such by customers, employees and the communities it serves. First Mid stock is traded on the NASDAQ under the symbol “FMBH”. More information about First Mid is available at www.firstmid.com.

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