UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

Form 10-K/A(Amendment No. 2)

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended December 31, 2007                  
|or                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission file number 033-19694

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FirstCity Financial Corporation(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization) |  | 76-0243729(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------
|6400 Imperial Drive, Waco, TX(Address of Principal Executive Offices)  |  | 76712(Zip Code)                               

(254) 761-2800(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

|Title of Each Class          |  | Name of Each Exchange on Which Registered
|---------------------------- |  | -----------------------------------------
|Common Stock, par value $.01 |  | The NASDAQ Stock Market LLC              

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes o        No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes o        No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.    Yes ý        No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

|Large accelerated filer o |  | Accelerated filer ý |  | Non-accelerated filer o (Do not check if a smaller reporting company) |  | Smaller reporting company o
|------------------------- |  | ------------------- |  | --------------------------------------------------------------------- |  | ---------------------------

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes o        No ý

The aggregate market value of the voting and non-voting common equity held by non-affiliates, based upon the closing price of the common
stock on the NASDAQ Stock Market as of June 30, 2007, was $95,343,164.

The
number of shares of common stock outstanding at April 15, 2008, was 10,378,207.



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EXPLANATORY NOTE

FirstCity Financial Corporation (the "Company") is filing this Amendment No. 2 on Form 10-K/A ("Amendment No. 2 Filing") to amend
its Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as originally filed with the Securities and Exchange Commission ("SEC") on March 17, 2008
("Original Filing"), and subsequently amended by Amendment No. 1 on Form 10-K/A as filed with the SEC on April 29, 2008 ("Amendment No. 1 Filing"), for the sole
purpose of amending the Company's disclosure under Part III, Item 14 in the Amendment No. 1 Filing, and no other information in the Original Filing, as amended by Amendment
No. 1 Filing, is amended hereby. As amended, the aggregate audit fees billed by KPMG LLP in 2007 was $1,575,936.

Except
for the amended information described above, this Amendment No. 2 Filing speaks as of the filing date of the Original Filing and does not update or discuss any other
Company developments after the date of the Original Filing. Accordingly, this Amendment No. 2 Filing should be read in conjunction with the Company's filings made with the SEC after the filing
of the Original Filing on March 17, 2008.

In
addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), new certifications by our principal executive
officer and principal financial officer are filed as exhibits to the Amendment No. 2 Filing under Item 15 of Part IV hereof.

PART III

Item 14.Principal Accountant Fees and Services.

Audit Fees

The aggregate fees billed for professional services by KPMG LLP ("KPMG") in 2007 and 2006 for these various services were:

2007

2006Audit fees(1)

$
1,575,936

$
1,673,000Audit-related fees





Tax fees





All other fees





Total

$
1,575,936

$
1,673,000




Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures for pre-approving all audit and non-audit services performed by the Company's
independent auditor. Except as noted below, no audit services or non-audit services shall be provided to the Company by the independent auditor unless first pre-approved by the
Audit Committee and unless permitted by applicable securities laws and the rules

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and
regulations of the SEC. If the Audit Committee approves an audit service within the scope of the engagement of the independent auditor, such audit service shall be deemed to have been
pre-approved.

Pre-approval
shall not be required for non-audit services provided by the independent auditor, if (i) the aggregate amount of all such
non-audit services provided to the Company constitutes not more than the five percent (5%) of the total amount of revenues paid by the Company to the independent auditor during the fiscal
year in which such non-audit services are provided, (ii) such non-audit services were not recognized by the Company at the time of the independent auditor's engagement
to be non-audit services, and (iii) such non-audit services are promptly brought to the attention of the Audit Committee and approved by the Audit Committee prior to the
completion of the audit.

The
Audit Committee may delegate to one or more members of the Audit Committee the authority to grant pre-approval of certain non-audit services. The decision of
any member to whom such authority is delegated to pre-approve non-audit services shall be presented to the full Audit Committee for its approval at its next scheduled meeting.

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PART IV

Item 15.Exhibits and Financial Statement Schedules.



Incorporated
by reference to FirstCity's Annual Report on Form 10-K for the year ended December 31, 2007, filed on March 17, 2008.



Incorporated
by reference to FirstCity's Annual Report on Form 10-K for the year ended December 31, 2007, filed on March 17, 2008.



|Exhibit
Number |  |   |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-------------- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            |  |  |  | Joint Plan of Reorganization by First City Bancorporation of Texas, Inc., Official Committee of Equity Security Holders and J-Hawk Corporation, with the Participation of Cargill Financial Services Corporation, Under Chapter 11 of the United
States Bankruptcy Code, Case No. 392-39474-HCA-11 (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 3, 1995 filed with the Commission on July 18, 1995).
|2.2            |  |  |  | Agreement and Plan of Merger, dated as of July 3, 1995, by and between First City Bancorporation of Texas, Inc. and J-Hawk Corporation (incorporated herein by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K
dated July 3, 1995 filed with the Commission on July 18, 1995).                                                                                                                                                            
|3.1            |  |  |  | Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated July 3, 1995 filed with the Commission on July 18,
1995).                                                                                                                                                                                                                                  
|3.2            |  |  |  | Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated December 30, 2005 filed with the Commission on December 30, 2005).                                                                                                                                                                                                                                               
|10.1           |  |  |  | Contribution and Assumption Agreement by and between Funding LP and Drive dated as of August 18, 2000. (incorporated herein by reference to Exhibit 10.42 of the Company's Form 8-K dated August 25, 2000, filed with the
Commission on September 11, 2000).                                                                                                                                                                                                   
|10.2           |  |  |  | Separation Agreement and Release, dated March 31, 2004, by and between G. Stephen Fillip, FirstCity Servicing Corporation and FirstCity Financial Corporation (incorporated herein by reference to Exhibit 10.19 of the Company's Form 10-Q
dated May 14, 2004).                                                                                                                                                                                               
|10.3           |  |  |  | Consultant Agreement, dated April 1, 2004, by and between FirstCity Servicing Corporation and G. Stephen Fillip (incorporated herein by reference to Exhibit 10.20 of the Company's Form 10-Q dated May 14, 2004).                                                                                                                                                                                                                                             
|10.4           |  |  |  | Securities Purchase Agreement dated as of September 21, 2004 by and among FirstCity Financial Corporation and certain affiliates of FirstCity and IFA Drive GP Holdings LLC, IFA Drive LP Holdings LLC, Drive Management LP
and certain affiliates of those persons. (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K dated September 27, 2004)                                                                                     

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|10.5  |  |  |  | Revolving Credit Agreement, dated November 12, 2004, among FirstCity Financial Corporation as Borrower and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to Exhibit 10.12 of the
Company's Form 10-Q dated November 15, 2004)                                                                                                                                                                   
|----- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6  |  |  |  | 1995 Stock Option and Award Plan (incorporated herein by reference to Exhibit A of the Company's Schedule 14A, Definitive Proxy Statement, dated March 27, 1996)                                                                                                                                                                                                                                                                                          
|10.7  |  |  |  | 1996 Stock Option and Award Plan (incorporated herein by reference to Exhibit C of the Company's Schedule 14A, Definitive Proxy Statement, dated March 27, 1996)                                                                                                                                                                                                                                                                                          
|10.8  |  |  |  | 2004 Stock Option and Award Plan (incorporated herein by reference to Appendix A of the Company's Schedule 14A, Definitive Proxy Statement, dated October 21, 2003)                                                                                                                                                                                                                                                                                       
|10.9  |  |  |  | Revolving Credit Agreement, dated August 26, 2005, among FH Partners, L.P., as Borrower, and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to Exhibit 10.1 of the Company's
Form 8-K dated September 1, 2005).                                                                                                                                                                                  
|10.10 |  |  |  | Guaranty Agreement, dated August 26, 2005, executed by FirstCity Financial Corporation, FirstCity Commercial Corporation, FirstCity Europe Corporation, FirstCity Holdings Corporation, FirstCity International Corporation, FirstCity Mexico,
 Inc., and FirstCity Servicing Corporation for the benefit of Bank of Scotland, as agent, and lenders (incorporated herein by reference to Exhibit 10.2 of the Company's Form 8-K dated September 1, 2005).
|10.11 |  |  |  | Sixth Amendment to Right Of First Refusal Agreement And Due Diligence Reimbursement Agreement dated effective as of February 1, 2006 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K dated February 6,
2006)                                                                                                                                                                                                                  
|10.12 |  |  |  | Asset Purchase Agreement, dated June 30, 2006, by and among FirstCity Financial Corporation and its subsidiaries, FirstCity Business Lending Corporation and American Business Lending, Inc.; and AMRESCO SBA Holdings, Inc. and NCS I,
 LLC (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K dated July 7, 2006)                                                                                                              
|10.13 |  |  |  | 2006 Stock Option and Award Plan (incorporated herein by reference to Appendix A of the Company's Schedule 14A, Definitive Proxy Statement, dated June 26, 2006)                                                                                                                                                                                                                                                                                          
|10.14 |  |  |  | Interest Purchase and Sale Agreement, dated August 8, 2006, by and among Bidmex Holding, LLC, and Strategic Mexican Investment Partners, L.P. and Cargill Financial Services International, Inc. and certain other parties
(incorporated herein by reference to Exhibit 10.14 of the Company's Form 10-Q dated November 9, 2006)                                                                                                                          
|10.15 |  |  |  | Put Option Agreement dated August 8, 2006, by and among Bidmex Holding, LLC, Recuperacion de Carteras Mexicanas, S. de R.L. de C.V., Bidmex 6, LLC, Strategic Mexican Investment Partners 2, L.P. and Cargill Financial Services
International, Inc. (incorporated herein by reference to Exhibit 10.15 of the Company's Form 10-Q dated November 9, 2006)                                                                                                
|10.16 |  |  |  | Guarantee dated August 8, 2006, executed by FirstCity Financial Corporation for the benefit of Bidmex Holding, LLC, Residencial Oeste 2 S. de R.L. de C.V., National Union Fire Insurance Company of Pittsburg, P.A., American General Life
Insurance Company, and American General Life and Accident Insurance Company (incorporated herein by reference to Exhibit 10.15 of the Company's Form 10-Q dated November 9, 2006)                             

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|10.17 |  |  |  | Amendment No. 4 to Revolving Credit Agreement, dated as of October 31, 2006, among FirstCity Financial Corporation as Borrower and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated November 7, 2006)  
|----- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.18 |  |  |  | Management Employment Contract dated November 30, 2006, between FirstCity Business Lending Corporation, American Business Lending, Inc.,and Charles P. Bell, Jr. (incorporated herein by reference to
Exhibit 10.2 of the Company's Form 8-K dated December 7, 2006)                                          
|10.19 |  |  |  | Management Employment Contract dated November 30, 2006, between FirstCity Business Lending Corporation, American Business Lending, Inc.,and Joe N. Smith (incorporated herein by reference to
Exhibit 10.3 of the Company's Form 8-K dated December 7, 2006)                                                  
|10.20 |  |  |  | Amendment No. 5 to Revolving Credit Agreement, dated as of December 14, 2006, among FirstCity Financial Corporation as Borrower and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated December 20, 2006)
|10.21 |  |  |  | Loan Agreement, dated as of December 15, 2006 by and between American Business Lending, Inc., as Borrower, and Wells Fargo Foothill, LLC, as lender (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K
dated December 28, 2006)                                                      
|10.22 |  |  |  | Amendment No. 1 to Loan Agreement, dated as of February 27, 2007, by and between American Business Lending, Inc., as Borrower, and Wells Fargo Foothill, LLC, as lender (incorporated herein by reference to Exhibit 10.22 of the
Company's Form 10-K dated July 24, 2007)                                    
|10.23 |  |  |  | Amendment No. 9 to Revolving Credit Agreement, dated as of June 29, 2007, among FirstCity Financial Corporation as Borrower and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to
Exhibit 10.23 of the Company's Form 10-Q dated August 10, 2007)    
|10.24 |  |  |  | Amendment No. 1 to Revolving Credit Agreement, dated June 29, 2007, among FH Partners, L.P., as Borrower, and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to Exhibit 10.24
of the Company's Form 10-Q dated August 10, 2007)                      
|10.25 |  |  |  | Amendment No. 2 to Loan Agreement, dated as of July 30, 2007, by and between American Business Lending, Inc., as Borrower, and Wells Fargo Foothill, LLC, as lender (incorporated herein by reference to Exhibit 10.1 of the
Company's Form 8-K dated August 3, 2007)                                         
|10.26 |  |  |  | Amendment No. 10 to Revolving Credit Agreement, dated as of August 22, 2007, among FirstCity Financial Corporation as Borrower and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated August 28, 2007)   
|10.27 |  |  |  | Amendment No. 3 and Consent to Revolving Credit Agreement, dated August 22, 2007, among FH Partners, L.L.C., as Borrower, and the Lenders named therein, as Lenders, and Bank of Scotland, as Agent (incorporated herein by reference to
Exhibit 10.2 of the Company's Form 8-K dated August 28, 2007)        

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|10.28  |  |  |  | Subordinated Delayed Draw Credit Agreement, dated as of September 5, 2007, among FirstCity Financial Corporation, as Borrower, and the Lenders named therein, as Lenders, and BoS (USA), Inc., as agent (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated September 10, 2007)                                         
|------ |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.29  |  |  |  | Letter agreement between FirstCity Financial Corporation and Bank of Scotland extending time period for closing of subordinate credit facility to be provided by BoS (USA,) Inc. to October 2, 2007 (incorporated herein by reference to
Exhibit 10.2 of the Company's Form 8-K dated September 10, 2007)                                             
|10.30  |  |  |  | Letter agreement between FirstCity Financial Corporation and BoS (USA), Inc. extending time period for closing of subordinate credit facility to be provided by BoS (USA), Inc. to October 31, 2007 (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated October 5, 2007)                                                
|10.31  |  |  |  | Letter agreement between FirstCity Financial Corporation and Bank of Scotland extending time period for closing of subordinate credit facility to be provided by BoS (USA), Inc. to October 31, 2007 (incorporated herein by reference to
Exhibit 10.2 of the Company's Form 8-K dated October 5, 2007)                                               
|10.32  |  |  |  | Letter agreement between FirstCity Financial Corporation and BoS (USA), Inc. extending time period for closing of subordinate credit facility to be provided by BoS (USA), Inc. to November 16, 2007 (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated November 8, 2007)                                              
|10.33  |  |  |  | Letter agreement between FirstCity Financial Corporation and Bank of Scotland which amended the Revolving Credit Agreement to extend time period for closing of subordinate credit facility to be provided by BoS (USA), Inc. to November 16,
2007 (incorporated herein by reference to Exhibit 10.2 of the Company's Form 8-K dated November 8, 2007)
|21.1*  |  |  |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                        
|23.1*  |  |  |  | Consent of KPMG LLP.                                                                                                                                                                                                                                                                                                                                  
|23.2*  |  |  |  | Consent of KPMG LLP.                                                                                                                                                                                                                                                                                                                                  
|31.1** |  |  |  | Certification of James T. Sartain, Chief Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                 
|31.2** |  |  |  | Certification of J. Bryan Baker, Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                   

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|                   |  | FIRSTCITY FINANCIAL CORPORATION
|------------------ |  | -------------------------------
|Date: May 12, 2008 |  | By:                            
|                   |  |                                

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