SecProbe.io

November 8, 2013

Via E -mail
Mr. Michael L. Taylor
Chief Financial Officer
First Mid -Illinois Bancshares, Inc.
1421 Charleston Avenue
Mattoon, Illinois 61938

Re: First Mid -Illinois Bancshares, Inc.
 Form 10-K for the Fiscal Year Ended December 31, 2012
Filed March 7, 2013
File No. 000 -13368

Dear Mr. Taylor :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not  believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, w e may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2012

Financial Statements

Note 4 – Investment Securities, page 63

1. You have a significant unrealized loss on your PreTSL XXVIII trust preferred
collateralized debt obligation security at December 31, 2012 and September 30,
2013.  The unrealized loss on this security represents 98% and 95% of its book value
at December 31,  2012 and September 30, 2013.  Please tell us why you believe the
security was not other -than-temporarily impaired based on the assumptions utilized
on page 30 and revise future filings to more fully explain why you believe your

Mr. Michael L. Taylor
First Mid -Illinois Bancshares, Inc.
November 8, 2013
Page 2

 current accounting is corre ct.  Please be sure to address each of the points below in
your proposed response:

 Why only 2% of the original collateral has been repaid since your investment and
why this level of repayment is so low in comparison to the two trust preferred
security inv estments sold in 2013 that had repayments of over 55%;
 How you determine the discount rate and why this discount rate was significantly
lower than the discount rates used for your other two trust preferred securities;
 How you developed your estimate of the  expected defaults and deferrals as a
percentage of the remaining collateral of 34.3%.  Why is this estimate so much lower
than the actual defaults and deferrals as a percentage of remaining collateral of
2,570%;
 The estimated loss severity on the securiti es that default and the specific factors that
you considered in developing the estimated loss severity;
 How you determine the projected losses on performing collateral;
 How you consider the specific credit characteristics of the collateral in developing
your estimate of future deferrals and defaults, including  the  earnings and capital
ratios of each financial institution in the pool, the Texas Ratio, the number of quart ers
that interest has been deferred and the cumulative dividend amount owed to investors;
and
 How you determined your recovery rate assumption of 10% .

Business Strategy

2. In each of your quarterly reports in 2013, you discuss the progress of changes to
your risk management programs implemented through a project named Excellence
2015.   In future filings, please discuss this project, including the costs and likely
benefits to First Mid -Illinois.   Also, please tell us whether the Excellence 2015
project was un dertaken as a result of any weaknesses or deficiencies identified as
part of your controls assessments.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the d isclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

Mr. Michael L. Taylor
First Mid -Illinois Bancshares, Inc.
November 8, 2013
Page 3

  staff comments or changes to d isclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Chris Harley  at (202) 551 -3695  or me at (202) 551 -3752  if you have
questions regarding comments on the financial statements and related matters.  Please contact
Chris topher  Dunham  at (202) 551 -3783 or Christian Windsor  at (202) 551 -3419  with any other
questions.

Sincerely,

 /s/ Gus Rodriguez

 Gus Rodriguez
Accounting Branch Chief