Exhibit 99.1

N E W S   R E L E A S E

FirstCity Financial Corporation Reports Fourth Quarter and Full Year 2010 Results

Waco, Texas   March 24, 2011……….

Highlights:

·                  FirstCity reported fourth quarter 2010 earnings of $1.8 million or $0.17 per diluted share, and fiscal year 2010 earnings of $12.5 million or $1.23 per diluted share.

·                  FirstCity invested $29.0 million during the quarter, consisting of $14.5 million of portfolio assets and $14.5 million in non-portfolio debt and equity investments. FirstCity invested $123.7 million during 2010, consisting of $67.7 million of portfolio assets and $56.0 million in non-portfolio debt and equity investments.

Overview of Fourth Quarter 2010

FirstCity reported net earnings of $1.8 million for the fourth quarter of 2010 (“Q4 2010”), compared to $8.4 million reported for the fourth quarter of 2009 (“Q4 2009”). The Company recorded diluted net earnings per common share of $0.17 in Q4 2010, compared to $0.80 of diluted net earnings per common share for the same period last year.

During Q4 2010, FirstCity and its investment partners jointly acquired $51.1 million of domestic portfolio assets with a face value of $107.8 million — of which FirstCity’s investment acquisition share was $14.5 million. FirstCity’s non-portfolio investments in Q4 2010 included $7.3 million of SBA loan advances and originations; $0.2 million of equity investments in privately-held middle-market companies; $6.5 million of equity investments in foreign partnerships; and $0.5 million of other investments.

In addition, during Q4 2010, the Company’s consolidated coal mine operation (special situations platform investment) completed performance on its coal supply and purchase agreements (which expired in December 2010). As a result, the coal mine subsidiary was dissolved, and its results of operations for Q4 2010 and fiscal year 2010 were reclassified from the Company’s special situations business segment and presented as discontinued operations.

The Company’s unrealized future gross profit associated with its core portfolio business assets totaled $149.0 million at December 31, 2010. Unrealized future gross profit is a non-GAAP measure. Refer to the Schedule of Estimated Unrealized Gross Profit from Portfolio Assets on page 12 of this release for a reconciliation of this measure with the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles.

Items impacting comparability of results from continuing operations for Q4 2010 are as follows:

Total assets of FirstCity increased to $460.4 million at the end of December 2010 from $445.2 million at the end of September 2010. The Company’s earning assets also experienced an increase to $400.5 million at the end of December 2010 from $386.2 million at the end of September 2010.

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Revenues in Q4 2010 decreased to $19.1 million compared to $24.7 million in Q4 2009. The Company’s revenues in Q4 2010 included $11.7 million of income and gains from portfolio assets, $2.7 million of fee income attributable to our loan servicing platform; $1.5 million of interest income and gains from loans receivable; and $1.3 million of revenues from our consolidated railroad subsidiary.

Revenues in Q4 2010 decreased as a result of a $6.9 million decrease in income and gains from portfolio assets in Q4 2010 compared to Q4 2009. A decline in collections from consolidated portfolio assets was the primary factor for the portfolio assets revenue decline in Q4 2010 compared to Q4 2009. In addition, this revenue decrease corresponds to a shift in the income-recognition methods used by the Company for certain of its existing and newly-acquired loan portfolio assets to non-accrual income methods (cost-recovery or cash basis) from the interest-accrual income method over the past 12-18 months. We apply non-accrual income-recognition methods to portfolio assets, as applicable, due to uncertainties related to estimating the timing and/or amount of collections as a result of the current economic environment.

The Company incurred $5.0 million of combined net impairment provisions in Q4 2010 from its consolidated and unconsolidated portfolio assets and loans compared to $5.5 million of combined net impairment provisions in Q4 2009. The provisions in Q4 2010 were recorded primarily to reflect changes in management’s estimates as to the timing and amount of projected future collections and declines in domestic real estate values. The global distribution of our Q4 2010 net impairment provisions included $1.7 million related to U.S. assets, $2.9 million related to European assets (primarily as a result of fair value measurements related to the German partnership step-acquisition transaction described below), and $0.4 related to Latin American assets. Net provisions in Q4 2010 were allocated between consolidated assets ($0.9 million) and FirstCity’s share of net provisions from unconsolidated subsidiaries ($4.1 million).

The Company’s share of foreign currency transaction losses from its consolidated and unconsolidated foreign operations was $0.5 million for both Q4 2010 and Q4 2009. Our combined foreign currency exchange loss in Q4 2010 related primarily to our consolidated Mexico operations.

Equity in earnings of unconsolidated subsidiaries was $0.6 million in Q4 2010 compared to losses of $1.7 million for Q4 2009. This increase was due to additional equity earnings of $2.0 million from our foreign servicing entities in Q4 2010 compared to Q4 2009, and $2.8 million of additional equity earnings from our special situations platform in Q4 2010 compared to Q4 2009 (we recorded $1.9 million in equity earnings in Q4 2010 from our special situations equity-method investment in a prefabricated building manufacturer — see below for additional discussion). This increase was off-set partially by $2.4 million of lower equity earnings from our domestic and foreign acquisition partnerships recorded in Q4 2010 compared to Q4 2009.

In Q4 2010, the Company also recognized a $3.7 million gain attributable to a step-acquisition transaction in which the Company gained a controlling interest in eight German acquisition partnerships. FirstCity owned noncontrolling equity interests in these entities prior to the transaction. Under business combination accounting guidance, FirstCity’s previously-held noncontrolling equity interests in these entities were re-measured to fair value — which resulted in the Company’s recognition of the gain. In February 2011, FirstCity sold a substantial majority of its interests in the portfolio assets held by these entities (and its equity interest in another German acquisition partnership) to a European acquisition partnership entity for approximately $22.5 million. FirstCity has a noncontrolling 13% beneficial interest in this European acquisition partnership that purchased the portfolio assets and German entity (the remaining 87% beneficial interest is owned by a subsidiary of Värde Investment Partners, L.P.). FirstCity’s net investment in Germany approximated $12.3 million at December 31, 2010, which was subsequently reduced to approximately $6.6 million in February 2011 upon FirstCity’s sale transaction described above.

Q4 2009 included $6.1 million of other income in connection with FirstCity’s settlement of a lawsuit.

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Selected other financial data from continuing operations for Q4 2010:

The Company’s total operating costs and expenses (excluding provision, interest and income tax expenses) decreased to $11.7 million for Q4 2010 from $12.2 million in Q4 2009, due primarily to $0.5 million of costs and expenses recorded by the Company’s consolidated wireless communications equipment manufacturing subsidiary (a special situations platform investment) in Q4 2009 compared to $-0- in Q4 2010 (the Company deconsolidated this subsidiary in June 2010 — see discussion below).

Total interest expense increased to $4.4 million in Q4 2010 from $3.7 million in Q4 2009. FirstCity’s average debt holdings were $294.6 million at a 6.0% average cost of funds for Q4 2010, compared to its average debt holdings of $310.1 million at a 4.8% average cost of funds for Q4 2009. Our increased cost of funds primarily relates to the higher interest and fees charged on our Reducing Note Facility with Bank of Scotland (closed in June 2010) compared to the loan facilities we had in place with Bank of Scotland in 2009.

The Company recorded $1.1 million of income tax expense in Q4 2010 compared to $0.2 million of income tax expense in Q4 2009. Income tax expense in Q4 2010 was composed primarily of foreign and state income taxes, and fluctuates regularly depending on the timing and amount of taxable revenues generated from our domestic and foreign acquisition partnerships, and our operating and servicing entities.

Noncontrolling interest expense increased to $3.2 million in Q4 2010 from $2.4 million in Q4 2009. Noncontrolling interest expense represents the portions of net earnings that are attributed to our co-investors in our consolidated subsidiaries. This increase was a result of an increase in net earnings from certain of our consolidated subsidiaries in Q4 2010 compared to Q4 2009 — primarily our consolidated European acquisition partnerships and special situations platform.

Results of discontinued operations for Q4 2010:

The Company’s discontinued operations, consisting of its consolidated coal mine subsidiary, reported a $0.3 million net loss in Q4 2010 (comprised of $13.9 million in operating revenues and $14.2 million in operating costs and expenses). The Company did not recognize any consolidated revenues, costs or expenses from its coal mine operation in Q4 2009 (the Company consolidated its investment in the coal mine operation in April 2010).

Fiscal year ending December 31, 2010

The Company’s fiscal year ended December 31, 2010 produced net earnings of $12.5 million or $1.23 per diluted share compared to net earnings of $18.7 million or $1.83 per diluted share for the fiscal year ended December 31, 2009. The decrease in earnings for 2010 compared to 2009 was driven primarily by the following: (1) a $7.9 million decline in income accretion from consolidated loan portfolio assets in 2010; (2) $6.2 million of additional net impairment provisions recorded by the Company in 2010 compared to 2009; (3) a $7.9 million increase in noncontrolling interest expense in 2010; and (4) $6.1 million of lawsuit settlement income recognized in 2009 (compared to $-0- in 2010). These factors that decreased earnings in 2010 compared to 2009 were off-set partially by the following: (1) a $14.9 million increase in equity earnings from unconsolidated subsidiaries in 2010; (2) $2.3 million of additional business combination gains recognized in 2010 compared to 2009; (3) a $3.3 million gain recognized in 2010 from the sale of an investment security; and (4) $4.0 million of net earnings from our consolidated coal mine operation (reported as discontinued operations); Additional information related to these factors is discussed below.

During 2010, FirstCity and its investment partners jointly acquired $225.8 million of domestic portfolio assets with a face value of $420.4 million — of which FirstCity’s investment acquisition share was $67.7 million. FirstCity’s non-portfolio investments in 2010 included $20.6 million of SBA loan advances and originations; $13.2 million of equity and debt investments in privately-held middle-market companies; $15.3 million of equity investments in foreign partnerships and other investments; and $6.9 million of equity investments in domestic partnerships and other investments.

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Items impacting comparability of results from continuing operations for the year are as follows:

Total assets at the end of 2010 remained relatively steady at $460.4 million compared to $465.1 million a year ago (a 1% decrease). However, the Company’s earning assets increased to $400.5 million at the end of 2010 from $366.2 million a year ago — due primarily to a $26.2 million increase in the Company’s equity-method investments in domestic unconsolidated acquisition partnerships (increased investment activity under the Company’s investment agreement with Värde Investment Partners, L.P.) and a $13.8 million increase in the Company’s equity-method investments in its special situations platform (discussed below).

Revenues in 2010 increased to $85.6 million compared to $79.8 million last year. The Company’s revenues in 2010 included $46.0 million of income and gains from portfolio assets, $6.0 million of interest income and gains from loans receivable, $8.7 million of fee income attributable to our loan servicing platform, and $15.2 million of revenues from our consolidated manufacturing and railroad subsidiaries.

Increased revenues in 2010 are primarily a result of $10.5 million of revenue from our consolidated wireless communications equipment manufacturing subsidiary in 2010 (acquired in December 2009). Our manufacturing subsidiary’s operating agreement was amended in June 2010, with the consent of its owners, and the change resulted in FirstCity ceasing to have a controlling interest, but retaining a noncontrolling interest, in the manufacturing entity. As such, since July 1, 2010, the Company recorded its share of the manufacturing subsidiary’s net earnings as “equity in earnings of unconsolidated subsidiaries” instead of reporting the subsidiary’s consolidated results of operations. Revenues also increased as a result of a $3.3 million gain from an investment security sale.

The revenue increases described above were off-set partially by a $7.9 million decrease in income and gains from portfolio assets in 2010 compared to 2009. This decrease corresponds to a shift in the income-recognition methods used by the Company for its loan portfolio assets (as described above). A decline in consolidated collections also contributed to the portfolio assets revenue decline in 2010 compared to 2009.

The Company incurred $17.0 million of combined net impairment provisions in 2010 from its consolidated and unconsolidated portfolio assets and loans compared to $10.8 million in 2009. The provisions in 2010 were recorded primarily to reflect changes in management’s estimates as to the timing and amount of projected future collections and declines in domestic real estate values. The global distribution of the $17.0 million of net impairment provisions in 2010 includes $10.5 million for domestic assets, $1.3 million related to Latin American assets, and $5.2 million related to European assets. Net provisions in 2010 were allocated between consolidated assets ($9.3 million) and FirstCity’s share of net provisions from unconsolidated subsidiaries ($7.7 million).

The Company’s share of foreign currency transaction losses from its consolidated and unconsolidated foreign operations was $0.9 million in 2010, compared to $47,000 of foreign currency transactions gains in 2009.

Equity in earnings of unconsolidated subsidiaries was $14.6 million in 2010 compared to losses of $0.3 million for 2009. This increase was due to additional equity earnings of $15.4 million and $5.1 million from our special situations platform subsidiaries and foreign servicing entities, respectively, recorded in 2010 compared to 2009. This increase was off-set partially by $5.5 million of lower equity earnings from our domestic and foreign acquisition partnerships recorded in 2010 compared to 2009. In 2010, we recorded $16.2 million in equity earnings from our equity-method investment related to a prefabricated building manufacturer (an unconsolidated subsidiary of our special situations platform). This entity reported significantly higher net earnings in 2010 related to building orders and a short-term lease agreement with a single customer. The entity’s business dealings with this customer were completed in 2010.

The Company recognized $4.6 million of business combination gains in 2010 in connection with the following transactions: (1) $3.7 million related to its step-acquisition of eight German acquisition partnerships (discussed above), and (2) $0.9 million related to a step-acquisition transaction involving three domestic acquisition partnerships in March 2010.

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2009 included $6.1 million of other income in connection with FirstCity’s settlement of a lawsuit.

Selected other financial data from continuing operations for the year:

The Company’s total operating expenses (excluding provision, interest and income tax expenses) increased to $54.9 million for 2010 from $41.9 million for 2009 — due primarily to $10.8 million of consolidated costs and expenses from our manufacturing subsidiary in 2010 (refer to discussion above), and a $1.4 million increase in asset-level expenses incurred in 2010 compared to 2009 (these expenses generally represent costs incurred by the Company to manage its portfolio assets, support foreclosed properties and protect its security interests in loan collateral).

Total interest expense increased to $16.3 million in 2010 from $14.3 million for 2009 (FirstCity’s average debt holdings increased to $300.9 million in 2010 from $295.6 million in 2009). The interest expense increase is attributable to the Company’s higher average cost of funds of 5.4% during 2010 compared to 4.8% for 2009. Our increased cost of funds primarily relates to the higher interest and fees charged on our Reducing Note Facility with Bank of Scotland (closed in June 2010) compared to the loan facilities we had in place with Bank of Scotland in 2009.

Noncontrolling interest expense increased to $13.4 million in 2010 from $5.6 million in 2009. Noncontrolling interest expense represents the portions of net earnings that are attributed to our co-investors in our consolidated subsidiaries. This increase was a result of a significant increase in net earnings from certain of our consolidated subsidiaries in 2010 compared to 2009 — primarily our consolidated European acquisition partnerships and special situations platform.

Results of discontinued operations for the year:

The Company’s discontinued operations, consisting of its consolidated coal mine subsidiary, reported $4.0 million of net earnings in 2010 (comprised of $42.3 million in operating revenues, $43.2 million in operating costs and expenses, and a $4.8 million business combination gain). The Company recognized the business combination gain, in connection with a step-acquisition transaction, when it increased its stake in the coal mine subsidiary to a controlling interest from a noncontrolling interest in April 2010.

Conference Call

A conference call will be held on Thursday, March 24, 2011 at 9:00 a.m. Central Time to discuss Q4 2010 and full year 2010 results. A question and answer session will follow the prepared remarks. Details to access the call and webcast are as follows:

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

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FirstCity Financial Corporation is a diversified financial services company with operations dedicated primarily to distressed asset acquisitions and special situations investments. FirstCity has offices in the U.S. and affiliate organizations in Europe and Latin America. FirstCity common stock is listed on the NASDAQ Global Select Market (NASDAQ: FCFC).

Cautionary Statement Regarding Forward-Looking Statements

FirstCity may from time to time make written or oral forward-looking statements, including statements contained in this press release, FirstCity’s filings with the Securities and Exchange Commission (“SEC”), in its reports to stockholders and in other FirstCity communications. These statements relate to FirstCity’s or management’s intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future and 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. The forward-looking statements in this press release are based upon management’s beliefs, assumptions and expectations of the Company’s future operations and economic performance, taking into account currently available information. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ from those expressed or implied in any such forward-looking statements as a result of various factors and risks, including unfavorable conditions and negative trends in U.S. and global economies, financial markets and real estate markets; adverse fluctuations in the underlying values of real estate and other assets securing our loan portfolios; sufficiency of funds generated from our operations, existing cash and available liquidity sources, combined with our ability to access the credit and capital markets, to finance our operations and investment activities; our ability to project future cash collections and develop critical assumptions and estimates surrounding the liquidation of our portfolio assets; and other factors and risks that are described from time to time in the Company’s filings with the SEC including but not limited to its annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K, filed with the SEC and available through the Company’s website, which contain a more detailed discussion of the Company’s business, including risks and uncertainties that may affect future results. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the SEC or otherwise. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

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FirstCity Financial Corporation

Summary of Operations

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Portfolio Purchases and Other Investments: