To the Shareholders                                        August 5, 1998
First Mid-Illinois Bancshares, Inc.



     We are pleased to announce that the Board of Directors has  approved
the repurchase of up to 3% of the Company's common stock.  The repurchase
program  demonstrates  the Board's confidence in the long-term future  of
the Company as well as its  commitment  to  improve  the overall level of
services  to shareholders.  The shares will be repurchased  at  the  most
recent market  price  of  the  stock.  Shareholders who are interested in
selling their shares to the Company  should  contact Ms. Christie Burich,
Manager of Shareholder Services at 217/258-0493.

     Another noteworthy item to report is the establishment of First Mid-
Illinois Insurance Services, Inc. which recently  began  operations  as a
wholly  owned  subsidiary  of First Mid-Illinois Bank & Trust.  First Mid
Insurance will operate as part  of  the Bank's Trust and Investment Group
under the direction of Bank Executive  Vice  President,  Jack  Kuzcynski.
This area of the Bank offers a wide range of investment advisory,  estate
and   retirement  planning,  retail  brokerage  and  now  life  insurance
services.  Kuczynski noted, "This area of our business is growing rapidly
as our  customers  look  to  the Bank for assistance with their long-term
financial planning.  We are enthusiastic  about  the  opportunity  to add
life  insurance  to  our product mix as it is a natural compliment to the
other services the Group  offers."   Shareholders who have an interest in
these services should contact Jack Kuzcynski at 217/258-0652.



Daniel E. Marvin, Jr.                     William S. Rowland
President and Chief Executive Officer     Executive Vice President and
                                          Chief Financial Officer