Exhibit 99.1

N E W S R E L E A S E

Contact:		Suzy W. Taylor
		866-652-1810

FirstCity Financial Reports Fourth Quarter and Full Year 2007 Results

Waco, Texas March 17, 2008……….

Highlights:

· FirstCity reported 4^th quarter 2007 loss of $1.4 million or ($.12) per diluted share. Earnings for the year 2007 were $2,185,000 or $0.19 per diluted share.

· FirstCity’s total investment level nears $150.0 million for 2007.

· FirstCity liquidity is solid with additional borrowing capacity of $146 million.

Components of the quarterly results are detailed below (dollars in thousands except per share data):

	Three Months Ended						Year Ended
	December 31,						December 31,
	2007			2006			2007			2006
	(unaudited)						(unaudited)
Portfolio Asset Acquisition and Resolution	$	569		$	3,009		$	11,432		$	15,104
Corporate overhead *	(1,929		)	(1,459		)	(9,247		)	(5,227		)
Earnings (loss) from continuing operations	(1,360		)	1,550			2,185			9,877
Loss from discontinued operations, net of taxes	—			—			—			(75		)
Net earnings (loss) to common stockholders	$	(1,360	)	$	1,550		$	2,185		$	9,802
Diluted earnings (loss) per common share	$	(0.12	)	$	0.13		$	0.19		$	0.83

* Corporate overhead includes expenses related to the independent audit committee investigation of $2.2 million in 2007 – comprised of $1.2 million in the first quarter, $0.8 million in the second quarter and $0.2 million in the third quarter. The independent investigation concluded in 2007.

James T. Sartain, President and CEO of FirstCity, said, “While we are disappointed in our 2007 results, FirstCity is well positioned to take advantage of the growing investment opportunities we are seeing in the marketplace. We have liquidity, a well-rounded franchise and talented, seasoned asset managers to create significant value for FirstCity. These are the times we look for, where the growing supply of distressed assets translates into attractive margins. I am enthusiastic about the opportunities I see in 2008.”

Portfolio Asset Acquisition and Resolution

The Company invested $19.4 million in portfolio acquisitions and other investments during the quarter. Earning assets totaled $243.6 million at quarter end.

(more)

Portfolio purchases are detailed below (in millions):

	Portfolio Purchases										FirstCity
					Latin				FirstCity		Investment
	Domestic		Europe		America		Total		Investment		in Other			Total
2007
4^th Quarter	$	5.3	$	14.7	$	4.4	$	24.4	$	15.7	$	3.7		$	19.4
3^rdQuarter	17.4		2.3		—		19.7		16.3		6.3			22.6
2^nd Quarter	27.4		2.4		61.6		91.4		25.2		4.2			29.4
1^st Quarter	71.6		3.8		3.4		78.8		69.5		7.8			77.3
YTD 2007	$	121.7	$	23.2	$	69.4	$	214.3	$	126.7	$	22.0		$	148.7
2006
4^th Quarter	$	34.6	$	101.2	$	2.1	$	137.9	$	70.2	$		16.8	$	87.0
3^rd Quarter	35.4		—		56.1		91.5		31.5		3.7			35.2
2^nd Quarter	24.2		1.0		—		25.2		19.0		7.0			26.0
1^st Quarter	42.4		—		—		42.4		23.3		0.7			24.0
Total Year 2006	$	136.6	$	102.2	$	58.2	$	297.0	$	144.0	$	28.2		$	172.2
Total Year 2005	$	93.4	$	37.2	$	16.0	$	146.6	$	71.4	$	3.2		$	74.6
Total Year 2004	$	91.2	$	9.8	$	73.1	$	174.1	$	59.8	$	—		$	59.8

For the fourth quarter 2007, operating contribution from the Portfolio Asset Acquisition business was $0.6 million. The earnings were comprised primarily of $10.9 million in revenues, $2.6 million in equity in earnings of investments, and $13.0 million of expenses. The business generated 56% of the revenues (including equity in earnings of investments) from domestic investments, 26% from investments in Latin America, 18% from investments in Europe and less than 1% from investments in Canada.

The revenues for the fourth quarter were positively impacted by continued income streams from Portfolio Assets of $6.3 million, equity in earnings of investments of $2.6 million, servicing fees of $2.4 million, and interest income from loans receivable of $0.9 million.

Fourth quarter earnings were negatively impacted by $3.2 million of net provisions – comprised of $1.1 million of provisions recorded to our wholly-owned domestic portfolios, and $2.1 million recorded to portfolio assets held in our partnerships ($1.6 million of net provisions in domestic partnerships and $0.5 million in Latin American partnerships). For the full year, net provisions were $6.4 million – comprised of $2.1 million recorded to our wholly-owned portfolios and $4.3 million to portfolio assets held in our partnerships. The fourth quarter provisions reflected delays and declines in the expected cash flows of certain loan portfolios and real estate assets. Management regularly evaluates the collectibility of the Company’s portfolio assets and may increase or decrease those values in future periods as the cash flows expected from those assets change.

Considering the recent deterioration of credit quality experienced by many banks, management believes that acquisition opportunities at attractive margins are on the rise. FirstCity’s total investment level approximated $150.0 million in 2007, and the Company is currently evaluating 27 different transactions representing over $1.8 billion in face value of assets, although there can be no assurance that FirstCity will be able to consummate any of these transactions on acceptable terms.

The following tables detail the impact of net foreign currency gains (losses) on corporate earnings:

	Three Months Ended						Year Ended
Illustration of the Effects of Currency	December 31,						December 31,
Fluctuations (dollars in thousands)	2007			2006			2007			2006
	(unaudited)						(unaudited)
Net earnings (loss) to Common Stockholders	$	(1,360	)	$	1,550		$	2,185		$	9,802
Foreign currency gains (losses):
Euro	97			287			882			1,068
Mexican Peso	127			(274		)	(63		)	(585		)
Argentine Peso	(14		)	29			(38		)	(30		)
Canadian Dollar	4			(106		)	247			(112		)
Chilean Peso	32			—			60			—

Exchange rate at valuation date:
Euro	0.68			0.76
Mexican Peso	10.87			10.88
Argentine Peso	3.15			3.07
Canadian Dollar	0.98			1.17
Chilean Peso	497.70			532.6

Other Corporate Matters

Share Repurchase Program

FirstCity initiated a stock repurchase program in 2006 providing for the repurchase of up to 1,000,000 shares of its common stock. Recently, the program was increased by 500,000 shares. To date, the Company has purchased 845,030 shares at an average cost of $9.60 per share (including 40,400 shares repurchased during the fourth quarter of 2007 and 264,530 shares repurchased since
year-end). Share repurchases continue and signify management’s assessment that the shares are undervalued in the market and represent a good investment alternative to enhance long term shareholder value.

Liquidity

FirstCity’s ability to obtain financing for investment opportunities is strong and remains unhindered by the negative conditions witnessed recently in the financial services sector, as evidenced by FirstCity’s ability to secure $125.0 million of total increases in its Bank of Scotland credit facilities during 2007. Management believes that the prospects for continued growth are strong based on existing acquisition opportunities and the stability of the Company’s credit providers and availability under its lines of credit.

Conference Call

A conference call will be held on Monday, March 17, 2008 at 9:00 a.m. Central Time to discuss fourth quarter and fiscal year 2007 results. A question and answer session will follow the prepared remarks. Details to access the call and webcast are as follows:

Event:	FirstCity Financial Corporation Fourth Quarter 2007 Conference Call
Date:	Monday, March 17, 2008
Time:	9:00 a.m. Central Time
Host:	James T. Sartain, FirstCity’s President and Chief Executive Officer


Web Access:	FirstCity’s web page-	www.fcfc.com/invest.htm or,
	CCBN’s Investor websites-	www.streetevents.com and,
		www.fulldisclosure.com

Dial In Access:	Domestic	800-329-9097
	International	617-614-4929

	Pass code	63177991

Replay	Available on FirstCity’s web page (www.fcfc.com/invest.htm)

Forward Looking Statements

Certain statements in this press release, which are not historical in fact, including, but not limited to, statements relating to future performance, may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, statements based on management’s expectations and statements regarding revenues, earnings guidance and future projected cash collections, as well as any statement that may project, indicate or imply future results, performance or achievements, and may contain the words “expect,” “intend,” “plan,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” “indication” and similar expressions. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. There are many important factors that could cause the Company’s actual results to differ materially.

These factors include, but are not limited to, the performance of the Company’s subsidiaries and affiliates; availability of portfolio assets and other investment opportunities; the Company’s ability to consummate portfolio acquisitions ad other investment transactions on acceptable terms; assumptions underlying portfolio asset performance; risks associated with start up of new businesses and entry into new foreign markets, risks associated with foreign operations; currency exchange rate fluctuations; interest rate risk; credit risk; risks of declining value of loans, collateral or assets; the degree to which the Company is leveraged; the Company’s continued need for financing; availability of the Company’s credit facilities; ability to obtain additional financing from the Bank of Scotland or any other lender; the impact of certain covenants in loan agreements of the Company and its subsidiaries; the ability of the Company to utilize net operating loss carry forwards; general economic, business and market conditions; foreign social and economic conditions; changes (legislative and otherwise) in the asset securitization industry; regulatory and accounting changes; fluctuation in residential and commercial real estate values; capital markets conditions, including the markets for asset-backed securities; uncertainties of any litigation arising from discontinued operations; factors more fully discussed and identified under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and risk factors and other risks identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on March 17, 2008, as well as in the Company’s other filings with the SEC.

Many of these factors are beyond the Company’s control. In addition, it should be noted that past financial and operational performance of the Company is not necessarily indicative of future financial and operational performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements.

The forward-looking statements in this release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

The Company is a diversified financial services company with operations dedicated to portfolio asset acquisition and resolution with offices in the U.S. and with affiliate organizations in Europe and Latin America. Its common stock is listed on the NASDAQ Global Select Market under the symbol “FCFC.”

FirstCity Financial Corporation

Summary of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2007			2006			2007			2006
Revenues:
Servicing fees	$	2,382		$	2,724		$	10,390		$	12,906
Income from Portfolio Assets	6,291			3,436			22,754			10,987
Gain on sale of SBA loans held for sale, net	65			—			723			—
Interest income from SBA loans	474			—			2,140			—
Interest income from affiliates	147			309			560			1,498
Interest income from loans receivable - other	306			559			3,822			576
Other income	1,367			574			3,267			2,420
Total revenues	11,032			7,602			43,656			28,387
Expenses:
Interest and fees on notes payable - other	4,394			2,856			18,060			8,289
Interest and fees on notes payable to affiliates	—			—			—			22
Salaries and benefits	4,629			3,721			16,932			14,831
Provision (recovery) for loan and impairment losses	1,125			170			2,061			271
Occupancy, data processing, property protection and other	4,249			3,043			14,789			9,236
Total expenses	14,397			9,790			51,842			32,649
Equity in earnings of investments	2,629			3,712			10,944			11,756
Gain on sale of subsidiaries and equity investments	—			54			207			2,459
Earnings (loss) from continuing operations before income taxes and minority interest	(736		)	1,578			2,965			9,953
Income taxes	(415		)	(61		)	(781		)	(173		)
Minority interest	(209		)	33			1			97
Earnings (loss) from continuing operations	(1,360		)	1,550			2,185			9,877
Discontinued operations
Loss from operations of discontinued components	—			—			—			(75		)
Income taxes	—			—			—			—
Loss from discontinued operations	—			—			—			(75		)
Net earnings	$	(1,360	)	$	1,550		$	2,185		$	9,802

Basic earnings per common share are as follows:
Earnings (loss) from continuing operations	$	(0.14	)	$	0.14		$	0.20		$	0.89
Discontinued operations	$	—		$	—		$	—		$	(0.01	)
Net earnings (loss) per common share	$	(0.14	)	$	0.14		$	0.20		$	0.88
Wtd. avg. common shares outstanding	10,778			10,787			10,786			11,125

Diluted earnings per common share are as follows:
Earnings (loss) from continuing operations	$	(0.12	)	$	0.13		$	0.19		$	0.84
Discontinued operations	$	—		$	—		$	—		$	(0.01	)
Net earnings (loss) per common share	$	(0.12	)	$	0.13		$	0.19		$	0.83
Wtd. avg. common shares outstanding	11,362			11,415			11,392			11,759

Selected Unaudited Balance Sheet Data

	December 31,			December 31,
	2007			2006
Cash	$	23,546		$	18,472
Earning Assets:
Portfolio Assets, net	122,001			108,696
Loans and interest receivable	26,574			29,311
Equity investments	87,622			112,357
Railroad assets	7,403			—
Deferred tax asset, net	20,101			20,101
Service fees receivable and other assets	10,872			8,726
Total assets	$	298,119		$	297,663

Notes payable - other	$	177,329		$	187,811
Minority interest and other liabilities	13,967			5,959
Total liabilities	191,296			193,770
Total equity	106,823			103,893
Total liabilities and equity	$	298,119		$	297,663

FirstCity Financial Corporation

Supplemental Information

(Dollars in thousands)

(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2007			2006			2007			2006
Portfolio Asset Acquisition and Resolution:
Summary Operating Statement Data
Revenues	$	10,945		$	7,470		$	43,217		$	27,522
Equity in earnings of investments	2,629			3,712			10,944			11,756
Gain on sale of subsidiaries and equity investments	—			54			207			2,459
Expenses	(11,880		)	(8,057		)	(40,875		)	(26,362		)
Operating contribution before provision for loan and impairment losses	1,694			3,179			13,493			15,375
Provision for loan and impairment losses	1,125			170			2,061			271
Operating contribution, net of direct taxes	$	569		$	3,009		$	11,432		$	15,104

Aggregate purchase price of portfolios acquired:
Acquisition partnerships
Domestic	$	5,309		$	34,653		$	121,679		$	136,596
Latin America	4,496			2,132			69,455			58,236
Europe	14,661			101,132			23,199			102,158
Total	$	24,466		$	137,917		$	214,333		$	296,990

	Purchase		FirstCity’s
	Price		Investment
Historical Acquisitions - Annual:
2007	$	214,333	$	126,714
2006	296,990		144,048
2005	146,581		71,405

Delaware		033-19694		76-0243729
(State of incorporation)		(Commission File No.)		(IRS Employer Identification No.)

(d)	Exhibits:

	99.1	Press release dated March 17, 2008.

	FIRSTCITY FINANCIAL CORPORATION


Date: March 17, 2008	By:	/s/ J. Bryan Baker
		J. Bryan Baker
		Senior Vice President and Chief Financial Officer

Exhibit No.		Description

99.1		Press release dated March 17, 2008.