FirstCity Financial Corporation Announces Common Stock Repurchase Plan

FirstCity Financial Corporation announced today that its Board of Directors has authorized a stock repurchase plan providing for the purchase of up to one million shares of the company’s common stock. Purchases may be made over a period of twelve months. The timing, price and volume of repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchases may be made from time to time on the open market or in privately negotiated transactions. The stock repurchase program does not require the company to repurchase any specific number of shares, and the company may terminate the repurchase program at any time.

FirstCity currently has 11,314,451 shares of common stock outstanding. The closing price of its common stock on August 11, 2006, as reported by NASDAQ Stock Market was $9.00 per share.

James T. Sartain, President and CEO, said, “We believe that our common shares represent an attractive investment opportunity, and that a repurchase program represents the best alternative to achieve our strategy of building long term stockholder value. Our available resources will allow the company to repurchase these shares, while at the same time preserve adequate liquidity to continue growing our earning asset base. Investment opportunities for FirstCity remain very positive and we will continue to pursue both domestic and international portfolio investments.”