First Mid Bancshares (FMBH) 8-K Results of Operations and Financial Condition

Exhibit 99

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We have started the year well with growth in earnings, growth in the balance sheet, and a stronger capital position. Net income for the first quarter of 2011 was $2,845,000 as compared to $2,548,000 for the first quarter of 2010, an increase of 12%. Diluted earnings per share also increased to $.35 for the first quarter of 2011 as compared to $.32 per share for the same period last year.

Net interest income for the first quarter of 2011 amounted to $11.7 million as compared to $9.4 million last year. This was due to growth in the balance sheet with more loans, investments, and deposits than a year ago, reflecting the acquisition of bank branches completed in September 2010. The initial results from the new locations in Peoria, Bloomington, Galesburg, and Quincy have been positive with increases in commercial operating loans and checking account balances in those communities. Our commercial cash management products have been well received in these communities. The balance sheet shows a decline in total loan balances since year-end as the growth in commercial loans has been offset by seasonal paydowns in agricultural operating loans. Our net interest income has also increased as we continue to systematically invest some of the liquidity resulting from the acquisition. At March 31, 2011, we had federal funds sold and interest bearing deposits of $192 million.

With the higher level of liquidity, our net interest margin is lower than last year. The net interest margin was 3.48% for the first quarter of 2011 as compared with 3.76% for the first quarter of 2010. We have a good opportunity to improve the margin by continuing to move some of the liquidity into higher-yielding loans and investments.

Total non-interest income of $4 million for the first quarter of 2011 was higher than the $3.1 million recognized during the same period last year. Revenues from our trust, brokerage, and mortgage banking areas all increased. Also, fees received on debit and ATM transactions increased as we added customers from the new locations. Impairment charges on trust preferred securities we own were lower than last year as the level of community bank defaults slowed slightly.

Operating expenses for the first quarter of 2011 were $10.3 million as compared to $7.8 million for the same period last year. The higher expenses reflect the personnel and operating costs for the 10 new branch locations. The Company’s effective tax rate is also higher with the increase in State of Illinois taxes this year. This tax increase amounted to approximately $100,000 in additional expense for the first quarter.

Economic conditions appear to have improved slightly for some borrowers but a widespread recovery has been constrained by higher fuel prices and operating costs. Our total non-performing assets(non-performing loans and other real estate owned) have improved from a year ago($17.6 million at March 31, 2011 as compared to $18.9 million on March 31, 2010) but were higher than at December 31, 2010. Provision expense for the quarter was $940,000 as compared with $760,000 for the first quarter of last year. Our net charge-offs for the first quarter were essentially the same as last year at $682,000 as compared with $693,000 for the first quarter of 2010. Our coverage ratio, or total loan loss reserve to non-accrual loans, of 94% remains strong when compared to our peer banks. We will continue to monitor these assets closely.

In February, we strengthened our capital position with our planned convertible preferred stock issuance. Thus far, we have issued $13.8 million of preferred stock with $13.7 million more expected to be issued following regulatory approval. At March 31, 2011, our Tier 1 Capital ratio was 13.54% which is well in excess of the regulatory minimums to be considered well-capitalized. The offering not only improves our already strong capital position but puts First Mid in a position to respond to opportunities that may lie ahead.

I mentioned in the last communication that our operating environment in 2011 will likely remain difficult. High levels of unemployment continue to hurt the economic recovery and increased regulation from Dodd-Frank is adding to bank’s operating costs. An environment such as this presents many challenges. That said, I remain convinced that it is also likely to produce many opportunities for banks with strong balance sheets, a solid infrastructure and good management. That is why I remain optimistic about the future.

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

Very Truly Yours,

/s/ William S. Rowland

William S. Rowland

Chairman and Chief Executive Officer

April 27, 2011

First Mid-Illinois Bancshares, Inc.

1515 Charleston Avenue

Mattoon, Illinois 61938

217-234-7454

www.firstmid.com

CONDENSED CONSOLIDATED BALANCE SHEETS
	(unaudited)
(in thousands, except share data)	Mar			Dec 31
	2011			2010
Assets
Cash and due from banks	$	25,537		$	21,008
Federal funds sold and other interest-bearing deposits		192,275			210,485
Certificates of deposit investments		10,000			10,000
Investment securities:
Available-for-sale, at fair value		387,196			342,816
Held-to-maturity, at amortized cost (estimated fair value of $53
at March 31, 2011 and December 31, 2010, respectively)		50			50
Loans		795,097			804,581
Less allowance for loan losses		(10,651	)		(10,393	)
Net loans		784,446			794,188
Premises and equipment, net		28,331			28,544
Goodwill, net		25,753			25,753
Intangible assets, net		4,782			5,068
Other assets		29,473			30,333
Total assets	$	1,487,843		$	1,468,245
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	198,745		$	183,932
Interest bearing		1,017,620			1,028,778
Total deposits		1,216,365			1,212,710
Repurchase agreements with customers		94,670			94,057
Other borrowings		19,750			22,750
Junior subordinated debentures		20,620			20,620
Other liabilities		7,529			5,843
Total liabilities		1,358,934			1,355,980
Stockholders’ Equity:
Preferred stock (no par value, authorized 1,000,000 shares; issued
7,679 shares in 2011 and 4,927 shares in 2010)		38,395			24,635
Common stock ($4 par value; authorized 18,000,000 shares; issued
7,496,801 shares in 2011 and 7,477,132 shares in 2010)		29,987			29,909
Additional paid-in capital		28,528			28,223
Retained earnings		68,494			66,356
Deferred compensation		2,885			2,929
Accumulated other comprehensive loss		(1,321	)		(2,066	)
Treasury stock at cost, 1,439,143 shares in 2011
and 1,418,456 in 2010		(38,059	)		(37,721	)
Total stockholders’ equity		128,909			112,265
Total liabilities and stockholders’ equity	$	1,487,843		$	1,468,245

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
For the period ended March 31,	2011			2010
Interest income:
Interest and fees on loans	$	11,463		$	9,914
Interest on investment securities		2,444			2,235
Interest on certificates of deposit		21			30
Interest on federal funds sold & other deposits		101			31
Total interest income		14,029			12,210
Interest expense:
Interest on deposits		1,819			2,186
Interest on repurchase agreements with customers		33			30
Interest on other borrowings		211			343
Interest on subordinated debt		261			260
Total interest expense		2,324			2,819
Net interest income		11,705			9,391
Provision for loan losses		940			760
Net interest income after provision for loan losses		10,765			8,631
Non-interest income:
Trust revenues		781			624
Brokerage commissions		155			129
Insurance commissions		608			644
Services charges		1,096			1,076
Securities gains (losses), net		181			241
Impairment losses on securities		(185	)		(623	)
Mortgage banking revenues		116			96
ATM / debit card revenue		832			624
Other		421			257
Total non-interest income		4,005			3,068
Non-interest expense:
Salaries and employee benefits		5,434			4,368
Net occupancy and equipment expense		1,967			1,278
FDIC insurance		434			318
Amortization of intangible assets		286			176
Legal and professional expense		567			429
Other		1,604			1,221
Total non-interest expense		10,292			7,790
Income before income taxes		4,478			3,909
Income taxes		1,633			1,361
Net income	$	2,845		$	2,548
Per Share Information (unaudited)
For the period ended March 31,		2011			2010
Basic earnings per common share	$	0.35		$	0.32
Diluted earnings per common share	$	0.35		$	0.32
Book value per share at Mar 31	$	14.94		$	14.66
Market price of stock at Mar 31	$	18.65		$	16.50

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands) (unaudited)
For the period ended March 31,	2011			2010
Balance at beginning of period	$	112,265		$	111,221
Net income		2,845			2,548
Dividends on preferred stock and common stock		(707	)		(577	)
Issuance of preferred and common stock		14,111			4221
Purchase of treasury stock		(382	)		(102	)
Deferred compensation and other adjustments		32			45
Changes in accumulated other comprehensive income		745			504
Balance at end of period	$	128,909		$	114,081

CONSOLIDATED CAPITAL RATIOS				Threshold
	As of			for “Well-
First Mid-Illinois Bancshares, Inc.	Mar 31			Capitalized”
Primary Capital Measurements (unaudited):	2011			Designation
Leverage ratio		8.56	%		5	%
Tier 1 capital to risk-weighted assets		13.54	%		6	%
Total capital to risk-weighted assets		14.70	%		10	%