SOURCE: FirstCity Financial

May 01, 2007 14:24 ET

FirstCity Financial Corporation and Crestone Capital Announce Formation of FirstCity Crestone

WACO, TX -- (MARKET WIRE) -- May 1, 2007 --FirstCity Financial Corporation (NASDAQ: FCFC) announced today that it has entered into a joint venture with Crestone Capital to create FirstCity Crestone, headquartered in Greenwood Village Colorado. FirstCity Crestone is a special situations platform with a broad mandate to invest in a variety of assets. Initially, the company will buy or finance distressed debt and companies, originate junior and senior bridge loans, and execute lower middle market buyouts. The company will be managed by the existing principals of Crestone Capital -- Richard Horrigan, Stephen Schmeltekopf, and Jim Miller, who will devote full time duties to the FirstCity Crestone platform. The company will target transactions of $1-$10 million on a stand alone basis, and seek to partner with other investors on larger transactions.

"The formation of FirstCity Crestone marks an exciting and natural expansion of FirstCity's core business of buying loan portfolios," said FirstCity Financial's CEO, Jim Sartain. "Over the past twenty years FirstCity has emerged as the buyer of choice for financial institutions seeking to sell their under-performing assets. Our partnership with Crestone Capital will expand our client base to include undercapitalized companies seeking capital to fund turnarounds, performing companies seeking bridge financing to support growth, and real estate developers and operators seeking capital to develop or reposition property. Rich Horrigan and his staff are seasoned asset originators and we are fortunate to partner with them to diversify and enhance the existing asset sourcing capabilities of FirstCity."

Rich Horrigan, Managing Director of Crestone Capital, added, "Crestone Capital is delighted to partner with FirstCity in this new venture. We think there's an underserved need in the lower middle market and by leveraging the resources of FirstCity, we think we can be become the capital provider of choice for turnaround advisors, equity funds, and entrepreneurs."

Forward-Looking Statement

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. Forward-looking statements include, without limitation, 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," 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, risks related to the start up of a business, including FirstCity Crestone's ability to implement its business plan and strategy to generate sufficient revenues necessary to avoid losses common to start up companies, the availability of opportunities for investment in the markets to be served by FirstCity Crestone, assumptions underlying loan performance, general economic conditions; factors more fully discussed and identified under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," risk factors and other risks identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 16, 2006, 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.

FirstCity Financial 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 System under the symbol "FCFC."

Contact Information

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    Suzy W. Taylor
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