<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

    For annual and transition reports pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
                                       or
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                         Commission File Number: 0-20677

                           FIRSTCITY LIQUIDATING TRUST
             (Exact name of registrant as specified in its charter)

                 Texas                                   06-6414468
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

         1001 Fannin, Suite 250, Houston, Texas                  77002
        (Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (713) 651-7841

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

                          Class B Beneficial Interests
                          Class C Beneficial Interests
                              (Title of Each Class)

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 [X]  No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

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. [X]

As of December 31, 2003 there were 2,454,310 units of Class B Beneficial
Interests and 387,151 units of Class C Beneficial Interests outstanding.

Documents incorporated by reference: None

<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K may include "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The opinions,
forecasts, projections, guidance or other statements other than statements of
historical fact, are forward-looking statements. When used in this Form 10-K,
words such as "will", "would", "should", "plans", "may", "anticipate",
"believe", "estimate", "expect", "intend", "predict", "project" and similar
expressions, as they relate to the Trust or Trust management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of Trust management as well as information currently available to the
Trust and assumptions made by Trust management that are subject to changes and
other risks. Although the Trust believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Certain risks and uncertainties
inherent in the Trust's business are set forth in the filings of the Trust with
the Securities and Exchange Commission. If one or more of these risks or
uncertainties materialize, or if any underlying assumption proves incorrect,
actual results may vary materially from those anticipated, expected or
projected. All subsequent written and oral forward-looking statements
attributable to us or individuals acting on behalf of the Trust are expressly
qualified in their entirety by this paragraph. The Trust does not undertake any
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

                                     Part I

Item 1.           Business.

                  On July 3, 1995 (the "Effective Date"), the FirstCity
Liquidating Trust (the "Trust") and certain other entities were established
pursuant to and upon consummation of the Joint Plan of Reorganization, dated
December 23, 1994, by First City Bancorporation of Texas, Inc., a Delaware
corporation (the "Debtor"), Official Committee of Equity Security Holders (the
"Equity Committee"), and J-Hawk Corporation ("J-Hawk"), with the participation
of Cargill Financial Services Corporation, under Chapter 11 of Title 11 of the
U.S. Code (the "Bankruptcy Code"), Case No. 392-39474-HCA-11 (the "Plan"). The
Plan was confirmed by order of the U.S. Bankruptcy Court for the Northern
District of Texas, Dallas Division (the "Bankruptcy Court") entered on May 31,
1995.

                  The Debtor was formed as a multi-bank holding company in 1988
for the purpose of reorganizing First City Bancorporation of Texas, Inc., a
Texas corporation. Beginning in the summer of 1990, the financial condition of
the Debtor began to deteriorate and worsened progressively throughout 1990 and
1991. On October 30, 1992, regulatory agencies closed the Debtor's banks. On
October 31, 1992, certain of the Debtor's unsecured creditors filed an
involuntary Chapter 11 bankruptcy petition against the Debtor in the Bankruptcy
Court. On November 23, 1992, the Debtor consented to the entry of an order for
relief against it under Chapter 11 of the Bankruptcy Code. Until July 3, 1995,
the Debtor operated its remaining businesses and managed its property as
debtor-in-possession.

                                       1

<PAGE>

                  The Plan was confirmed by the Bankruptcy Court by an order
entered on May 31, 1995, and became effective on July 3, 1995. Pursuant to the
Plan and an Agreement and Plan of Merger between the Debtor and J-Hawk, on July
3, 1995, J-Hawk was merged (the "Merger") with and into the Debtor, with the
Debtor as the surviving entity. Pursuant to the Merger, (i) the former holders
of common stock of J-Hawk received, in the aggregate, approximately 49.9% of the
outstanding common stock of the surviving entity, in exchange for their shares
of J-Hawk common stock, (ii) approximately 50.1% of the outstanding common stock
of the surviving entity was distributed among former security holders of the
Debtor pursuant to the Plan and (iii) the name of the corporation was changed to
FirstCity Financial Corporation ("FirstCity").

                  The Trust has not and, pursuant to the Liquidating Trust
Agreement dated as of July 3, 1995 by and between First City Bancorporation of
Texas, Inc. and U.S. Bank National Association, successor to State Street Bank
and Trust Company, Fleet National Bank and Shawmut Bank Connecticut, National
Association, as Trustee (the "Trust Agreement"), may not engage in the conduct
of a trade or business apart from the liquidation of Trust assets and the
winding up of the affairs of the Debtor and its subsidiaries. Pursuant to
Article VIII of the Trust Agreement, the Trust shall terminate upon the date
which is three (3) years and six (6) months after the Effective Date; provided,
however, that at least six (6) months prior to such termination, the Portfolio
Committee (as defined herein) may, with the approval of the Bankruptcy Court,
extend the term of the Trust if necessary to the liquidating purpose thereof.
Multiple extensions, if approved by the Bankruptcy Court, are permissible,
although the aggregate of all such extensions shall not exceed five (5) years so
that, in any event, the Trust shall terminate no later than eight (8) years and
six (6) months after the Effective Date. In June 2001, the Bankruptcy Court
extended the life of the Trust to January 3, 2004, and the Trust terminated on
January 4, 2004. In February 2004 the remaining assets of the Trust, consisting
of stock of FCLT Loans Asset Corp., a Texas corporation, were distributed to the
holders of the Class B Beneficial Interests.

                  Pursuant to the Plan, substantially all of the legal and
beneficial interest in the assets of the Debtor, other than $20 million in cash
which was contributed by the Debtor to FirstCity, were transferred to the Trust
or to subsidiaries of the Trust. Such assets have been liquidated over the life
of the Trust pursuant to the terms of the Plan and the Trust Agreement. The
non-cash assets of the Trust consist principally of performing and
non-performing loans, interests in real estate, and miscellaneous other assets
and receivables transferred to the Trust upon the consummation of the Plan.

                  In connection with the sale of the Debtor's banks by the
Federal Deposit Insurance Corporation (the "FDIC") to certain other banks (the
"Loss-Sharing Banks"), the FDIC entered into certain agreements (the
"Loss-Sharing Agreements") to guarantee certain recoveries on loans acquired by
the Loss-Sharing Banks. On July 12, 1995, in order to reduce the uncertain
effect of the Loss-Sharing Agreements on future distributions to the Trust by
the FDIC, subsidiaries of the Trust purchased assets for approximately $206
million from the Loss-Sharing Banks (the "Loss-Sharing Settlement"). With the
purchase of these assets, the Loss-Sharing Banks released the FDIC from its
future obligations under the Loss-Sharing Agreements. The Loss-Sharing
Settlement was significant to the Trust because it allowed the FDIC to eliminate
the loss-sharing reserve that it had maintained to cover the FDIC's obligations
under the loss-sharing guarantees, thereby eliminating the uncertainty

                                       2

<PAGE>

of future reductions from the reserve and increasing the initial distribution
made by the FDIC to the Trust.

                  In 1996, the FDIC closed the Receiverships of the Debtor's
banks (the "Receiverships") and distributed the surplus cash ($17.6 million on
December 23, 1996) of the Receiverships to the Trust. In accordance with that
certain Conveyance and Indemnification Agreement (the "Conveyance and
Indemnification Agreement"), dated December 23, 1996 and extended in April 1999,
the Trust is required, among other things, to provide indemnity to the FDIC
against any known or unknown liabilities, obligations or actual expenses
associated with the Receiverships, in an aggregate amount up to $10 million
until the termination of the Trust.

Item 2.           Properties.

                  The Trust does not have any material physical properties,
except for such properties that are held for sale.

Item 3.           Legal Proceedings.

                  In November 2003 the Trust settled, at no cost to the Trust, a
lawsuit brought by Gordonville Corporation, N.V. and others. As part of the
settlement, 338,578 Class C Certificates were surrendered to the Trust and
cancelled.

                  The Trust is involved in various other legal proceedings in
the ordinary course of business. In the opinion of management of the Trust, the
resolution of such matters will not have a material adverse impact on the
consolidated financial position, results of operations or liquidity of the
Trust.

Item 4.           Submission of Matters to a Vote of Security Holders.

                  As the Trust has no outstanding voting securities, no matters
were submitted to a vote of security holders during the fourth quarter ended
December 31, 2003.

                                     Part II

Item 5.           Market For Registrant's Common Equity and Related Stockholder
                  Matters.

                  The Class A Certificate was held by FirstCity. Through
December 31, 1997, the Trust had distributed $188 million to FirstCity as the
sole Class A Certificate holder, retiring the Class A Certificate in full.

                  The Class B Beneficial Interests (traded under the symbol
"FCFCL") and Class C Beneficial Interests (traded under the symbol "FCFCZ") have
been traded over the counter since July 3, 1995. The number of Class B
Certificate holders and Class C Certificate holders of record as of December 31,
2003, was 54 and 824, respectively. The registration of the Class B and Class

                                       3

<PAGE>

C Certificates was terminated on February 2, 2004. High and low trade prices as
compiled by Bloomberg Financial Markets Services, an online service, are
displayed in the following tables:

<TABLE>
<CAPTION>
                                                            Class B Beneficial Interests
                               -------------------------------------------------------------------------------------
                                                  2003                                        2002
                               -------------------------------------------    --------------------------------------
                                    Market Price       Cash Distributions        Market Price     Cash Distributions
                               ---------------------                          -----------------
Quarter Ended                    High          Low            Paid              High      Low           Paid
-------------                  --------     --------       -----------        -------   -------     ------------
<S>                            <C>          <C>            <C>                <C>       <C>          <C>
March 31.....................  $ 14.05      $ 13.05        $      -           $ 13.80   $ 12.50          $  -
June 30......................    14.00        12.45               -             14.50     13.70             -
September 30.................    12.50         1.20           11.00             14.20     13.80             -
December 31..................     1.85          .55            1.00             14.30     13.90             -
</TABLE>

<TABLE>
<CAPTION>
                                                            Class C Beneficial Interests
                                            -------------------------------------------------------------
                                                      2003                                  2002
                                            ------------------------             ------------------------
                                                  Market Price                          Market Price
                                            ------------------------             ------------------------
Quarter Ended                                 High             Low                 High             Low
-------------                               --------          ------             --------          ------
<S>                                         <C>              <C>                  <C>              <C>
March 31........................            $    .10         $   .05              $ 1.55           $ 1.28
June 30.........................                 .05             .05                1.35              .01
September 30....................                   -               -                 .05              .01
December 31.....................                   -               -                 .10              .05
</TABLE>

                  No distributions were made to Class B Certificate holders
through December 31, 1997. In 1998, $67.5 million, or $27.50 per Class B
Certificate, was distributed to Class B Certificate holders. In 1999, $23.3
million, or $9.50 per Class B Certificate, was distributed to Class B
Certificate holders. In 2000, $9.8 million, or $4.00 per Class B Certificate,
was distributed to Class B Certificate holders. In 2001, $2.5 million, or $1.00
per Class B Certificate, was distributed. In 2002, no distributions were made.
In 2003, $29.5 million, or $12.00 per Class B Certificate, was distributed. No
distributions have been made to Class C Certificate holders.

                  The Trust is required to apply all proceeds from liquidation
and disposition of its assets first to the payment of normal operating expenses.
Second, Trust proceeds totaling $188 million were distributed to FirstCity to
retire the Class A Certificate in December 1997. The third order of distribution
of Trust proceeds is payments pursuant to employment and bonus agreements with
certain former employees of the Debtor. The bonus pool and executive long-term
incentive plan provides for the payment of bonuses equal to 4.76% of additional
distributions to Class B Certificate holders and (if any) Class C Certificate
holders.

                  Fourth, Class B Certificate holders are entitled to
distributions up to the Pour-Over Level. The Pour-Over Level (approximately $28
million at December 31, 2003) is the liquidation preference on July 3, 1995 of
the Debtor's Series B and Series E preferred stock, less the nominal stated
value of FirstCity special preferred stock and the book value of FirstCity
common stock issued to the Series B and Series E holders, plus interest at an
annual rate of 6.5% from July 3, 1995. The Pour-Over Level is reduced for
distributions to Class B Certificate holders.

                                       4

<PAGE>

                   Lastly, Class C Certificate holders receive distributions (if
any) after any remaining payments to Class B Certificate holders up to the
Pour-Over Level (approximately $11.55 per unit as of December 31, 2003).

Item 6.           Selected Financial Data.

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                               ----------------------------------------------------------------
(Dollars in thousands)                            2003         2002          2001          2000          1999
                                               ---------     ---------     --------      -------       --------
<S>                                            <C>           <C>           <C>           <C>           <C>
Income (loss) (1)..........................    $   4,397     $  (5,293)    $ (4,968)     $ 5,952       $ 24,323
Expenses...................................        3,124         1,507        1,778        2,679          3,844
Net income (loss) (1)......................        1,273        (6,800)      (6,746)       3,273         20,479
Distributions on Class "B" Certificate.....       29,452             -        2,454        9,817         23,316

At year end:
         Total assets......................        2,075        31,631       38,581       48,028         54,421
         Class "B" Certificate.............        1,921        30,100       36,900       46,100         52,400
</TABLE>

----------------
(1)  Net of $7 million and $7 million, respectively, reduction in value of 67%
     partnership interest in First City Tower in 2002 and 2001.

Item 7.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.

                  The operations of the Trust are summarized below:

<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                        -------------------------------------
(Dollars in thousands)                                     2003           2002         2001
                                                        -----------     --------     --------
<S>                                                     <C>             <C>          <C>
Changes in fair value of trust assets.......            $     4,356     $ (5,350)    $ (5,077)
Interest income on short-term investments...                     41           57          109
Administrative expense......................                 (3,124)      (1,507)      (1,778)
                                                        -----------     --------     --------
         Net income (loss)...................           $     1,273     $ (6,800)    $ (6,746)
                                                        ===========     ========     ========
</TABLE>

                              2003 COMPARED TO 2002

         The estimated fair value of the net trust assets increased $4.4 million
in 2003, including $1.3 million of liability reductions, as compared to a
decrease of $5.4 million in 2002. Factors which contributed to the enhancement
of the net asset value of the Trust's assets in 2003 include the increase in the
estimated market value of the Trust's assets that naturally occurs as the
remaining life of the Trust (and concomitantly the discount factor applied in
calculating net asset value) decreases and as estimated future expenses are
incurred.

         Interest income on short-term investments decreased in 2003 as compared
to 2002 because of lower money market yields.

                                       5

<PAGE>

         Administrative expense totaled $3.1 million in 2003 as compared to $1.5
million in 2002. A $1.4 million bonus, based on distributions to Class B
Certificate holders, was paid to certain former employees of the Debtor in 2003
as compared to no bonus paid to such employees in 2002.

         Net collections on Trust assets in 2003 totaled $29.8 million
(primarily the sale of the 67% partnership interest in First City Tower) as
compared to $2.5 million in 2002. The Class B Certificates were valued at $1.9
million at December 31, 2003. In 2003, $29.5 million, or $12.00 per Certificate,
was distributed to Class B Certificate holders and a $1.4 million bonus was paid
to certain former employees of the Debtor. The remaining net asset value of the
Trust as reflected in the value of the Class B Certificates is estimated to be
between $.50 and $1.00 per Certificate. The actual valuation will be determined
by the remaining asset liquidations and expenses of closing out the Trust, as
well as the outcome of certain litigation. From the inception of the Trust in
1995, the net asset valuation has never shown any value to the Class C
Certificates. With the liquidation of the Trust assets nearly complete,
management of the Trust has determined that no value will be apportioned to the
Class C interests and no distribution will be made to the holders of the Class C
Certificates.

         Non-cash trust assets at December 31, 2003 and 2002 were comprised of
the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                   -----------------------------
Estimated Gross Cash Flow by Type of Asset                             2003            2002
------------------------------------------                         ------------    -------------
<S>                                                                <C>             <C>
Borrowers' obligation on outstanding balance of:
    Performing loans...........................                    $         50    $         438
    Nonperforming loans........................                               3                6
Real estate and other assets...................                             810           31,616
                                                                   ------------    -------------
    Total......................................                             863           32,060
                                                                   ------------    -------------
    Discount required to reflect trust assets at
         estimated fair value..................                            (268)          (4,655)
                                                                   ------------    -------------
Trust assets, net..............................                    $        595    $      27,405
                                                                   ============    =============
</TABLE>

         For each asset, estimates of income, expense and net cash flow on a
monthly basis through the expected final disposition date are prepared by
management of the Trust. The individual asset budget is developed based upon
factors which include physical inspection of the asset or the collateral
underlying the related loan, local market conditions, contractual payments or
rents, and discussions with the relevant borrower. The Trust's management and
the Portfolio Committee periodically reevaluate and revise projected monthly
cash flows on an asset by asset basis. At December 31, 2003 and 2002, the
projected monthly cash flows were discounted at 7% to reflect the Trust assets
at estimated fair value. The Trust assets are highly concentrated in Texas.

         In the second quarter of 2003, the Trust sold its 67% partnership
interest in First City Tower for approximately $29 million. At December 31,
2003, the discount required to reflect trust assets at estimated fair value
included estimated future expenses of closing out the Trust.

                                       6

<PAGE>

                              2002 COMPARED TO 2001

         The estimated fair value of the Trust's assets decreased $5.4 million
in 2002 compared to $5.1 million in 2001. The 2002 decrease was attributable to
a $7 million reduction in value of the 67% partnership interest in First City
Tower. Offsetting factors which contributed to the enhancement of the net asset
value of the Trust's assets in 2002 include (i) the appreciation in value of
certain assets attributable to a favorable interest rate environment and the
effect of such favorable interest rates on the marketability of real estate and
(ii) the increase in the estimated market value of the Trust's assets that
naturally occurs as the remaining life of the Trust (and concomitantly the
discount factor applied in calculating net asset value) decreases.

         Interest income on short-term investments decreased in 2002 as compared
to 2001 due to lower money market yields.

         Administrative expense totaled $1.5 million in 2002 as compared to $1.8
million in 2001. A $112,000 bonus, based on distributions to Class B Certificate
holders, was paid to certain former employees of the Debtor in 2001 as compared
to no bonus paid to such employees in 2002. Professional fees totaled $.5
million in 2002 as compared to $.6 million in 2001.

         Net collections on Trust assets in 2002 totaled $2.5 million as
compared to $4.1 million in 2001.

                          CRITICAL ACCOUNTING POLICIES

         The Trust believes the following represent its critical accounting
policies. The Trust determined that these accounting policies were significant
due to their impact on the presentation of the consolidated financial
statements, the impact on the operating results and financial position of the
Trust, and the estimates inherent in the policies.

         Valuation of Trust Assets

         The net assets of the Trust are carried at estimated fair values which
are the results of discounting, at appropriate discount rates, the currently
estimated cash flows projected to be realized from the collection, liquidation
and disposition of the non-cash assets held by the Trust. Such assets consist
principally of performing and non-performing loans, interests in real estate,
and miscellaneous other assets and receivables transferred to the Trust upon the
consummation of the Plan of Reorganization. The estimates of the future cash
flows from which the net asset values of the Trust were derived are made under
the direction of the management of the Trust and the Portfolio Committee based
upon information available and are believed to be reliable. There can be no
assurance, however, that the estimates resulting from such reviews or the net
asset values derived from such estimates will ultimately be realized due to the
highly judgmental assumptions which were made in developing estimates of the
amount and timing of future cash flows to be realized upon the liquidation of
the types of assets such as those held by the Trust.

                                       7

<PAGE>

         Use of Estimates

         Management of the Trust has made certain estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare the consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America. Actual results could differ from those estimates.

Item 7A.          Quantitative and Qualitative Disclosures About Market Risk.

                  The Trust does not engage in trading market risk sensitive
instruments and does not purchase as investments, as hedges, or for purposes
"other than trading" instruments that are likely to expose the Trust to market
risk, whether it be from interest rate, foreign currency exchange, commodity
price or equity price risk. The Trust has issued no debt instruments, entered
into no forward or futures contracts, purchased no options and entered into no
swaps.

                                       8

<PAGE>

Item 8.           Financial Statements and Supplementary Data.

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                            ------------------------------------
                                                                                 2003                  2002
                                                                            ---------------        -------------
               Assets, at estimated fair value
<S>                                                                         <C>                    <C>
Cash and cash equivalents................................................   $         1,480        $       4,226
Trust assets, net.......................................................                595               27,405
                                                                            ---------------        -------------
       Total assets......................................................             2,075               31,631
                                                                            ---------------        -------------
               Less liabilities at face or estimated amount

Payables and accrued liabilities.........................................               154                1,531
                                                                            ---------------        -------------
       Total liabilities.................................................               154                1,531
                                                                            ---------------        -------------
Commitments and contingencies............................................                 -                    -

               Trust net asset value attributable to:

Class "B" Certificate, 2,454,310 units outstanding.......................             1,921               30,100
Class "C" Certificate, 387,151 units in 2003 and 725,729 units
               in 2002 outstanding.......................................                 -                    -
                                                                            ---------------        -------------
       Total net asset value.............................................   $         1,921        $      30,100
                                                                            ===============        =============
</TABLE>

See accompanying notes to consolidated financial statements.

                    CONSOLIDATED STATEMENTS OF OPERATIONS AND
                    CHANGES IN NET ASSET VALUE IN LIQUIDATION
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                             -------------------------------------------
                                                                 2003            2002             2001
                                                              -----------     ----------       ---------
<S>                                                           <C>             <C>              <C>
Changes in fair value of net trust assets............         $     4,356     $   (5,350)      $  (5,077)
Interest income on short-term investments............                  41             57             109
Administrative expense...............................              (3,124)        (1,507)         (1,778)
                                                              -----------     ----------       ---------
       Net income (loss).............................               1,273         (6,800)         (6,746)
                                                              -----------     ----------       ---------
Net asset value, beginning of period.................              30,100         36,900          46,100
Distributions on Class "B" Certificate...............             (29,452)             -          (2,454)
                                                              -----------     ----------       ---------
Net asset value, end of period.......................         $     1,921     $   30,100       $  36,900
                                                              ===========     ==========       =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       9

<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                YEAR ENDED DECEMBER 31,
                                                                    ----------------------------------------------
                                                                       2003              2002             2001
                                                                    -----------      ------------      -----------
<S>                                                                 <C>              <C>               <C>
Cash flows from operating activities:
    Net income (loss)............................................   $     1,273      $     (6,800)     $    (6,746)
    Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
       Changes in fair value of trust assets....................         (4,356)            5,350            5,077
       Collections on trust assets, net of advances..............        29,769             2,456            4,063
       Increase (decrease) in payables and accrued liabilities ..            20               (45)            (231)
                                                                    -----------      ------------      -----------
          Net cash provided by operating activities..............        26,706               961            2,163
                                                                    -----------      ------------      -----------
Cash flows from financing activities:
    Distributions on Class "B" Certificate.......................       (29,452)                -           (2,454)
                                                                    -----------      ------------      -----------
          Net cash used in financing activities..................       (29,452)                -           (2,454)
                                                                    -----------      ------------      -----------
    Net increase (decrease) in cash and cash equivalents.........   $    (2,746)     $        961      $      (291)
    Cash and cash equivalents, beginning of period...............         4,226             3,265            3,556
                                                                    -----------      ------------      -----------
    Cash and cash equivalents, end of period.....................   $     1,480      $      4,226      $     3,265
                                                                    ===========      ============      ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       10

<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                        December 31, 2003, 2002 and 2001

(A)      Summary of Significant Accounting Policies

         (1)      Description of Business

         The Joint Plan of Reorganization by First City Bancorporation of Texas,
         Inc. (the "Debtor"), Official Committee of Equity Security Holders, and
         J-Hawk Corporation ("J-Hawk"), with the participation of Cargill
         Financial Services Corporation, under Chapter 11 of the United States
         Bankruptcy Code, Case No. 392-39474-HCA-11 (the "Plan of
         Reorganization"), was confirmed by the Bankruptcy Court for the
         Northern District of Texas, Dallas Division (the "Bankruptcy Court"),
         by an order entered on May 31, 1995, and became effective on July 3,
         1995. Pursuant to the Plan of Reorganization, and an Agreement and Plan
         of Merger between the Debtor and J-Hawk, on July 3, 1995, J-Hawk was
         merged (the "Merger") with and into First City Bancorporation of Texas,
         Inc., and the name of the corporation was changed to FirstCity
         Financial Corporation ("FirstCity").

         Pursuant to the Plan, substantially all of the legal and beneficial
         interests in the assets of the Debtor, other than $20 million in cash
         contributed to FirstCity, were transferred to FirstCity Liquidating
         Trust (the "Trust"), or to subsidiaries of the Trust. Such assets were
         liquidated over the life of the Trust pursuant to the terms thereof. In
         June 2001, the Bankruptcy Court extended the life of the Trust to
         January 3, 2004, and the Trust terminated on January 4, 2004.
         FirstCity, as the sole holder of the Class A Certificate under the
         Trust, received from the Trust amounts sufficient to retire the Class A
         Certificate in December 1997. Additional distributions were paid to
         certain of the former security holders of the Debtor pursuant to the
         terms of the Class B and the Class C certificates of beneficial
         interests in the Trust. The Trust was administered by a four-person
         portfolio committee (the "Portfolio Committee"). The net assets of the
         Debtor transferred to the Trust on July 3, 1995, consisted of the
         following (dollars in thousands):

<TABLE>
<S>                                                  <C>
Cash and cash equivalents......................      $135,360
Trust assets...................................        61,514
Estimated claims and accrued liabilities.......       (14,002)
                                                     --------
                                                     $182,872
                                                     ========
</TABLE>

         In connection with the sale of the Debtor's banks by the FDIC to
         third-party acquirers (the "Loss-Sharing Banks"), the FDIC guaranteed
         certain recoveries on loans acquired by the Loss-Sharing Banks. (These
         agreements are referred to as "Loss-Sharing Agreements".) On July 12,
         1995, in order to reduce the uncertain effect of the Loss-Sharing
         Agreements on future distributions to the Trust by the FDIC,
         subsidiaries of the Trust purchased assets (the "Loss-Sharing
         Settlement") for approximately $206 million from the Loss-Sharing
         Banks. With the purchase of these assets, the Loss-Sharing Banks
         released the FDIC from its future obligations under the Loss-Sharing
         Agreements.

                                       11
<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)

         (2)      Principles of Consolidation

         The accompanying consolidated financial statements include the accounts
         of FirstCity Liquidating Trust and its subsidiaries (collectively
         referred to as the "Trust"). All significant intercompany transactions
         and balances have been eliminated in consolidation. Certain amounts in
         the financial statements for prior periods have been reclassified to
         conform with current financial statement presentation.

         (3)      Cash Equivalents

         For purposes of the consolidated statements of cash flows, the Trust
         considers all highly liquid debt instruments with original maturities
         of three months or less to be cash equivalents. At December 31, 2003
         and 2002, substantially all cash balances were in excess of federally
         insured limits. In accordance with the Liquidating Trust Agreement, all
         cash balances are maintained at institutions with at least $100 million
         of capital stock and surplus and whose short-term debt obligations are
         rated by at least two nationally recognized rating agencies in one of
         the two highest categories.

         (4)      Trust Assets

         The net assets of the Trust are carried at estimated fair values which
         are the results of discounting, at appropriate discount rates, the
         currently estimated cash flows projected to be realized from the
         collection, liquidation and disposition of the non-cash assets held by
         the Trust. Such assets consist principally of performing and
         non-performing loans, interests in real estate, and miscellaneous other
         assets and receivables transferred to the Trust upon the consummation
         of the Plan of Reorganization. The estimates of the future cash flows
         from which the net asset values of the Trust were derived are made
         under the direction of the management of the Trust and the Portfolio
         Committee based upon information available and are believed to be
         reliable. There can be no assurance, however, that the estimates
         resulting from such reviews or the net asset values derived from such
         estimates will ultimately be realized due to the highly judgmental
         assumptions which were made in developing estimates of the amount and
         timing of future cash flows to be realized upon the liquidation of the
         types of assets such as those held by the Trust.

         Trust assets are revalued at least quarterly and adjustments to
         estimated fair values are included in operating results in the period
         in which they become known. Loans are considered performing if debt
         service payments are made in accordance with the original or
         restructured terms of the notes. Interest on loans is recognized as
         part of the proceeds from disposition of trust assets. Impairment of
         loans is measured based on the present value of the expected future
         cash flows discounted at the loan's effective interest rate, or the
         fair value of the collateral, less estimated selling costs, if the loan
         is collateral dependent and foreclosure is probable.



                                       12

<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)

         Foreclosed assets acquired in settlement of notes are recorded at
         estimated fair value. Costs relating to the development and improvement
         of property and holding costs are considered in the development of
         estimated fair values.

         (5)      Income Taxes

         Under current federal and state laws, the Trust shall be treated as a
         grantor trust owned by the beneficiaries holding beneficial interest
         therein. For tax purposes, any item of income or loss is allocated
         among the certificate holders. Therefore, no provision has been made
         for income taxes in the accompanying consolidated financial statements.

         (6)      Use of Estimates

         Management of the Trust has made certain estimates and assumptions
         relating to the reporting of assets and liabilities and the disclosure
         of contingent assets and liabilities to prepare these consolidated
         financial statements in conformity with accounting principles generally
         accepted in the United States of America. Actual results could differ
         from those estimates.

                                       13

<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)

(B)      Trust Assets

         Trust assets are comprised of the following:

         (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                             ------------------------
Estimated Gross Cash Flow by Type of Asset                                      2003           2002
------------------------------------------                                   ----------      --------
<S>                                                                          <C>             <C>
Borrowers' obligation on outstanding balance of:
     Performing loans...........................................             $       50      $    438
     Nonperforming loans .......................................                      3             6
Real estate and other assets....................................                    810        31,616
                                                                            -----------      --------
     Total......................................................                    863        32,060
                                                                            -----------      --------
     Discount required to reflect trust assets at
          estimated fair value..................................                   (268)       (4,655)
                                                                             ----------      --------
Trust assets, net...............................................             $      595      $ 27,405
                                                                             ==========      ========
</TABLE>

         For each asset, estimates of income, expense and net cash flow on a
         monthly basis through the expected final disposition date are prepared
         by management of the Trust. The individual asset budget is developed
         based upon factors which include physical inspection of the asset or
         the collateral underlying the related loan, local market conditions,
         contractual payments or rents, and discussions with the relevant
         borrower. The Trust's management and the Portfolio Committee
         periodically reevaluate and revise projected monthly cash flows on an
         asset by asset basis. At December 31, 2003 and 2002, the projected
         monthly cash flows were discounted at 7% to reflect the Trust assets at
         estimated fair value. The Trust assets are highly concentrated in
         Texas.

         In the second quarter of 2003, the Trust sold its 67% partnership
         interest in First City Tower for approximately $29 million. At December
         31, 2003 the discount required to reflect Trust assets at estimated
         fair value included estimated future expenses of closing out the Trust.

(C)      Distribution Priorities

         The Trust is required to apply all proceeds from liquidation and
         disposition of its assets first to payment of normal operating
         expenses. Second, Trust proceeds totaling $188 million were distributed
         to FirstCity to retire the Class A Certificate in December 1997. The
         third order of distribution of Trust proceeds is payments pursuant to
         employment and bonus agreements with certain former employees of the
         Debtor. The bonus pool and executive long-term incentive plan provides
         for the payment of bonuses equal to 4.76% of additional distributions
         to Class B Certificate holders and (if any) Class C Certificate
         holders.

                                       14

<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)

         Fourth, Class B Certificate holders are entitled to distributions up to
         the Pour-Over Level. The Pour-Over Level (approximately $28 million at
         December 31, 2003) is the liquidation preference on July 3, 1995 of the
         Debtor's Series B and Series E preferred stock, less the nominal stated
         value of FirstCity special preferred stock and the book value of
         FirstCity common stock issued to the Series B and Series E holders,
         plus interest at an annual rate of 6.5% from July 3, 1995. The
         Pour-Over Level is reduced for distributions to Class B Certificate
         holders. In 2003, $29.5 million, or $12.00 per Certificate, was
         distributed to Class B Certificate holders and a $1.4 million bonus was
         paid to certain former employees of the Debtor. In 2001, $2.5 million,
         or $1.00 per Certificate, was distributed to Class B Certificate
         holders and a $112,000 bonus was paid to certain former employees of
         the Debtor.

         Lastly, Class C Certificate holders receive distributions (if any)
         after any remaining payments to Class B Certificate holders up to the
         Pour-Over Level (approximately $11.55 per unit as of December 31,
         2003).

         The ultimate amounts to be distributed to the holders of the B and C
         Certificates will result from the cash flow actually realized from the
         liquidation of the non-cash Trust assets. The determination of the net
         asset value of the Trust in the accompanying consolidated statements of
         net assets in liquidation is based upon estimates of future cash flows.
         The actual cash flows and the timing of such cash flows may vary
         significantly from those estimates, thus affecting the final
         distributions to the Certificate holders.

(D)      Commitments and Contingencies

         In November 2003 the Trust settled, at no cost to the Trust, a lawsuit
         brought by Gordonville Corporation, N.V. and others. As part of the
         settlement, 338,578 Class C Certificates were surrendered to the Trust
         and cancelled.

         The Trust is involved in various other legal proceedings in the
         ordinary course of business. In the opinion of management of the Trust,
         the resolution of such matters will not have a material adverse impact
         on the consolidated financial position, results of operations or
         liquidity of the Trust.

         In 1996, the FDIC closed the receiverships of the Debtor's banks and
         distributed the remaining surplus of those receiverships to the Trust.
         In accordance with a conveyance and indemnification agreement, the
         Trust is required, among other things, to provide indemnity to the FDIC
         against any known or unknown liabilities, obligations or actual
         expenses associated with the receiverships, in an aggregate amount up
         to $10 million until the termination of the Trust. Management of the
         Trust does not believe that, to the extent the Trust is obligated to
         pay certain claims or expenses associated with the past obligations of
         the Debtor's banks, such payments will have a material adverse impact
         on the consolidated financial position, results of operations, or
         liquidity of the Trust.



                                       15

<PAGE>

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)

(E)      Subsequent Event

         On February 2, 2004, the Trust distributed in kind its remaining assets
         to the holders of its Class B Certificates. The distribution consisted
         of shares of common stock of FCLT Loans Asset Corp. which will own all
         of the remaining assets of the Trust. One share of FCLT Loans Asset
         Corp. common stock was distributed for each Class B Certificate held by
         the certificate holders.

         From the inception of the Trust in 1995, the net asset valuation has
         never shown any value whatsoever to the Class C Certificates and no
         distributions will be made to the holders of the Class C Certificates.
         In connection with the termination of the Trust, the registration of
         the Trust's Class B Certificates and Class C Certificates under the
         Securities Exchange Act of 1934 was terminated on February 2, 2004.

         The shares of FCLT Loans Asset Corp. that were distributed will not be
         registered under the Securities Exchange Act of 1934, as amended. No
         market is expected to exist for such shares and they will not be freely
         tradeable. It is anticipated that the assets of FCLT Loans Asset Corp.
         will be liquidated and the proceeds distributed to its shareholders in
         2004. The Board of Directors of FCLT Loans Asset Corp. will consist of
         Robert W. Brown and Richard E. Bean, both members of the former
         FirstCity Liquidating Trust Portfolio Committee.

                                       16

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Portfolio Committee and Certificate Holders
FirstCity Liquidating Trust:

         We have audited the accompanying consolidated statements of net assets
in liquidation of FirstCity Liquidating Trust and subsidiaries (the "Trust") as
of December 31, 2003 and 2002, and the related consolidated statements of
operations and changes in net asset value in liquidation, and cash flows for
each of the years in the three-year period ended December 31, 2003. These
consolidated financial statements are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of FirstCity
Liquidating Trust and subsidiaries as of December 31, 2003 and 2002, and the
results of their operations and changes in net asset value in liquidation and
their cash flows for each of the years in the three-year period ended December
31, 2003, in conformity with accounting principles generally accepted in the
United States of America.

         As discussed in Note E to the financial statements, the Trust was
terminated in February 2004 and distributed its remaining assets, consisting of
shares of common stock of FCLT Loans Asset Corp., to the holders of its Class B
Certificates.

                                    KPMG LLP

Houston, Texas
March 2, 2004

                                       17

<PAGE>

                           FIRSTCITY LIQUIDATING TRUST
                   SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                 2003                                           2002
                                 ----------------------------------------------    --------------------------------------------
                                   First        Second       Third      Fourth      First      Second       Third      Fourth
                                  Quarter       Quarter     Quarter     Quarter    Quarter     Quarter     Quarter     Quarter
                                 ---------    ---------    --------    --------    -------    --------    --------    ---------
<S>                              <C>          <C>          <C>         <C>         <C>        <C>         <C>         <C>
Changes in fair value of
    trust assets (1)........     $  (1,679)   $   2,974    $  2,022    $  1,039    $   448    $    336    $    314    $  (6,448)
Interest income on
    short-term investments..            11            9          15           6         14          13          16           14
Administrative expense......          (332)        (383)     (1,940)       (469)      (462)       (349)       (330)        (366)
                                 ---------    ---------    --------    --------    -------    --------    --------    ---------
Net income (loss) (1).......     $  (2,000)   $   2,600    $     97    $    576    $     -    $      -    $      -    $  (6,800)
                                 =========    =========    ========    ========    =======    ========    ========    =========
</TABLE>

------------------
(1)  Net of $2 million and $7 million, respectively, reduction in value of 67%
     partnership interest in First City Tower in first quarter of 2003 and
     fourth quarter of 2002.

Item 9.           Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure.

                  None.

                                    Part III

Item 10.          Directors and Executive Officers of the Registrant.

                  Role of the Portfolio Committee

                  Pursuant to Article IV of the Trust Agreement, except where
expressly limited by the terms of the Trust Agreement, all of the management and
executive authority over the Trust resides in the four-member Portfolio
Committee (subject to increase and reduction). The Trust Agreement provides that
such four members are initially Rick R. Hagelstein (the "Chief Credit Officer
Member Position"), Robert W. Brown (the "Robert W. Brown Member Position"), and
Richard E. Bean and R. David Palmer, as the two members designated by the Equity
Committee (the "Equity Committee Member Positions"). All have been members of
the Portfolio Committee since the Effective Date. Mr. Hagelstein resigned in the
second quarter of 1998 and Joe S. Greak was appointed to replace Mr. Hagelstein.
Background information and the employment histories of Messrs. Bean, Brown,
Greak and Palmer are set forth below.

                  Richard E. Bean, 60, has been Executive Vice President and
Chief Financial Officer of Pearce Industries, Inc. since 1976, which company,
through its subsidiaries, markets a variety of oilfield equipment and machinery.
Prior to the Effective Date, Mr. Bean was Chairman of the Equity Committee. Mr.
Bean is currently a director of FirstCity.

                                       18

<PAGE>

                  Robert W. Brown, 55, has been President of FCLT Loans Asset
Corp., a wholly-owned subsidiary of the Debtor, since the Effective Date. As of
the Effective Date, Mr. Brown served as Executive Vice President and Secretary
of FirstCity. After the Effective Date he resigned from FirstCity to devote
substantially all of his time to the Trust. Mr. Brown was Chief Financial
Officer of the Debtor beginning in 1991. He served as Executive Vice President
of the Debtor from 1990 to 1992, became a member of the Debtor's Board of
Directors in 1992 and served as President of the Debtor from 1993 through the
Effective Date. Mr. Brown was a director and officer of the Debtor when the
Debtor filed a plan of reorganization under the federal bankruptcy laws in
December 1994.

                  Joe S. Greak, 55, has been Senior Vice President and Tax
Director of FirstCity since the Effective Date. Mr. Greak was the Tax Manager of
the Debtor from 1993 to the Effective Date.

                  R. David Palmer, 61, has been a private investor for the past
25 years. Prior to the Effective Date, Mr. Palmer was a member of the Equity
Committee. From 1970 to 1995, Mr. Palmer was a Professor of Philosophy at the
State University of New York, Fredonia, New York. Mr. Palmer is currently a
director of Sensatex, Inc.

                  Others

                  C. Ivan Wilson, 76, was Chairman of the Board and Chief
Executive Officer of the Debtor from 1991 until the Effective Date and has been
Vice Chairman of the Board of FirstCity since that date.

                  Role of the Trustee

                  Although all of the management and executive authority over
the Trust resides in the Trustee, the Trustee functions as a directed Trustee
under the sole and absolute discretion of the Portfolio Committee and may not
exercise discretion in the management and conduct of the liquidation of the
Trust assets. The Trustee has no authority or right to refuse to act when so
ordered or directed to do so by the Portfolio Committee. The Trustee is U.S.
Bank National Association, formerly State Street Bank and Trust Company, Fleet
National Bank and Shawmut Bank Connecticut, N.A. There have been no changes in
the Trustee through the date of this Form 10-K.

Item 11.          Executive Compensation.

                  Compensation of the Trustee

                  The compensation paid by the Trust to the Trustee consisted of
administrative fees aggregating $10,250 in 2003 and $20,500 in each of 2002 and
2001.

                                       19

<PAGE>

                  Compensation of the Portfolio Committee

                  Pursuant to the terms of Article X of the Trust Agreement, the
Portfolio Committee consists of the following four members: Joe S. Greak in the
Chief Credit Officer Member Position, Robert W. Brown in the Robert W. Brown
Member Position, and two members as designated by the Equity Committee, who at
present are Richard E. Bean and R. David Palmer. Pursuant to Section 10.1.1 of
the Trust Agreement, Messrs. Bean and Palmer, or their respective successors,
each receives compensation for his services as a member of the Portfolio
Committee in an amount equal to $12,000 per annum, payable in $3,000 increments
on the first day of each calendar quarter. In addition, pursuant to a resolution
of the Board of Directors of Loans Asset Corp., Messrs. Bean and Palmer each
receive $1,000 for each Portfolio Committee meeting which they attend. The other
two members are not separately compensated for their services as members of the
Portfolio Committee.

                  Compensation of Executive Officers and Others

                  Executive officers and others of the Trust received
compensation during the last three years as set forth in the following table:

<TABLE>
<CAPTION>
            NAME AND                                  ANNUAL COMPENSATION (1)
                                                 -------------------------------
      PRINCIPAL POSITION            YEAR           SALARY                BONUS
-------------------------------     ----         ----------            ---------
<S>                                 <C>          <C>                   <C>
Robert W. Brown                     2003         $  250,000            $ 489,000
-        President of FCLT          2002            250,000                    -
         Loans Asset Corp.          2001            250,000               39,225

C. Ivan Wilson                      2003         $        -            $ 489,000
-        Vice Chairman of           2002                  -                    -
         FirstCity                  2001                  -               39,225

Joe S. Greak                        2003         $        -            $ 243,036
-        Senior Vice President of   2002                  -                    -
         FirstCity                  2001                  -               19,495
</TABLE>

---------------
(1)  Amounts reported for Mr. Wilson and Mr. Greak relate only to Exhibit O to
     the Plan.

                  Mr. Brown's compensation is determined as set forth in that
certain employment agreement (the "Brown Employment Agreement"), effective as of
July 3, 1995, as amended May 1, 1996, by and between FCLT Loans Asset Corp. and
Mr. Brown. The Brown Employment Agreement provides for Mr. Brown's employment
with FCLT Loans Asset Corp. and his duties to the Trust for a term commencing on
July 3, 1995 and terminating on dissolution of the Trust. Mr. Brown's duties
include his membership on the Portfolio Committee of the Trust, the management
and payment of creditor claims and the liquidation of the assets of the Trust
pursuant to the terms of the Trust Agreement. In compensation for such services,
Mr. Brown is paid an annual salary of $250,000. Through December 31, 2003, Mr.
Brown was paid $1.9 million in performance-oriented bonuses pursuant to Exhibit
O to the Plan. The Brown Employment Agreement provides for a conditional bonus
in an amount equal to 1.67% of all additional aggregate payments to the holders
of the Class B Certificates and the Class C Certificates. The payment of such
conditional bonus to Mr. Brown is to be determined by the Portfolio Committee.
In the event that the Brown Employment Agreement is terminated by the Portfolio
Committee prior to the termination date of the Trust, or upon the death or
disability of Mr. Brown, Mr. Brown or his estate is entitled to continue to
receive certain bonuses pursuant to the terms set forth in the Brown Employment
Agreement. Mr. Brown's unpaid bonuses will be forfeited in the event that he
terminates the Brown Employment Agreement or is terminated for cause by FCLT
Loans Asset Corp. prior to the date of the expiration of the Brown Employment
Agreement.



                                       20

<PAGE>
                  Pursuant to Section 9.8 of the Plan, Mr. Brown (as described
in the previous paragraph), along with C. Ivan Wilson, Joe S. Greak, former
employees of the Debtor and certain employees of the Trust, share in a bonus
pool and executive long-term incentive plan, the provisions of which are set
forth in Exhibit O to the Plan. In 2003, bonuses totaling $1.4 million ($.5
million to Mr. Brown) were paid pursuant to Exhibit O. No bonuses were paid in
2002. In 2001, bonuses totaling $112,000 ($39,225 to Mr. Brown) were paid
pursuant to Exhibit O.

Item 1 (A)        Security Ownership of Certain Beneficial Owners
                  and Management.

         (A)      Since the Trust has no outstanding "voting securities" within
               the meaning of the Exchange Act and the regulations thereunder,
               the disclosure requirements of Form 10-K pertaining to 5% holders
               of voting securities are not applicable.

         (B)      The following table sets forth certain information with
               respect to the beneficial ownership of the Class B and Class C
               Beneficial Interests, as of December 31, 2003, by the members of
               the Portfolio Committee and executive officers. The Trustee is
               not the beneficial owner of any Class B or Class C Beneficial
               Interests.

<TABLE>
<CAPTION>
                                                        NUMBER OF CLASS B BENEFICIAL INTERESTS
                                                             AND PERCENTAGE OF OUTSTANDING
                                                             CLASS B BENEFICIAL INTERESTS
                                                               AS OF DECEMBER 31, 2003
                                                        --------------------------------------
                                                              BENEFICIAL           PERCENT
NAME OF OWNER OR IDENTITY OF GROUP                            OWNERSHIP            OF CLASS
----------------------------------                            ---------            --------
<S>                                                           <C>                  <C>
Robert W. Brown....................................                  -                 -
Richard E. Bean....................................             98,100               4.0
Joe S. Greak.......................................                  -                 -
R. David Palmer....................................                  -                 -
C. Ivan Wilson.....................................                  -                 -

All Portfolio Committee members and
  executive officers as a group (5 persons)........             98,100               4.0
</TABLE>

-----------
*  Less than 1%

                                       21

<PAGE>

<TABLE>
<CAPTION>
                                                        NUMBER OF CLASS C BENEFICIAL INTERESTS
                                                             AND PERCENTAGE OF OUTSTANDING
                                                             CLASS C BENEFICIAL INTERESTS
                                                               AS OF DECEMBER 31, 2003
                                                        --------------------------------------
                                                              BENEFICIAL           PERCENT
NAME OF OWNER OR IDENTITY OF GROUP                            OWNERSHIP            OF CLASS
----------------------------------                            ---------            --------
<S>                                                           <C>                  <C>
Robert W. Brown....................................                197                 *
Richard E. Bean....................................                  -                 -
Joe S. Greak.......................................                  -                 -
R. David Palmer....................................                  -                 -
C. Ivan Wilson.....................................                 15                 *

All Portfolio Committee members and
   executive officers as a group (5 persons).......                212                 *
</TABLE>

------------
*  Less than 1%

         (c) Pursuant to the terms of the Trust Agreement, all of the management
and executive authority over the Trust resides in the four-member Portfolio
Committee. The Trust has no knowledge of any arrangements which may result in a
change of control of the Trust. However, in the event that the position on the
Portfolio Committee held by Robert W. Brown is vacated for any reason, the
number of Portfolio Committee members will be permanently reduced to three. In
such instance, two of the three current remaining members of the Portfolio
Committee will be affiliated with FirstCity and, as a result, FirstCity may be
deemed to have some control over Portfolio Committee decisions.

Item 13.          Certain Relationships and Related Transactions.

                  None.

Item 14.          Controls and Procedures.

                  Under the supervision and with the supervision of the
management of the Trust, including our principal executive officer and our
principal financial officer, we have performed an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this Annual Report, pursuant
to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934. Based on that
evaluation, management of the Trust concluded that the disclosure controls and
procedures of the Trust were effective. There have been no significant changes
in the Trust's internal controls or in other factors that could significantly
affect internal controls subsequent to the date of their evaluation.

                                       22
<PAGE>

                                     Part IV

Item 15.          Exhibits, Financial Statement Schedules, and Reports on
                  Form 8-K.

          (a)     1.       Financial Statements

                  The consolidated financial statements of the Trust are
incorporated by reference to Item 8 "Financial Statements and Supplementary
Data" of this report.

                  2.       Financial Statement Schedules

                  Financial statement schedules have been omitted because the
information is either not required, not applicable, or is included in Item 8 -
"Financial Statements and Supplementary Data."

                  3.       Exhibits

                  Exhibit
                    No.                       Description

                  2.1(1)   Joint Plan of Reorganization for
                           First City Bancorporation of Texas, Inc., as
                           modified, under Chapter 11 of the United States
                           Bankruptcy Code, as confirmed by the U.S. Bankruptcy
                           Court for the Northern District of Texas, Dallas
                           Division, on May 31, 1995.

                  2.2(5)   Order To Extend Term of FirstCity Liquidating Trust,
                           dated June 11, 2001.

                  2.3(6)   Purchase and Sale Contract between Financial Center,
                           Inc., FCLT Tower, L.P., Parkway Properties FCT
                           Limited Partner LP and Parkway Properties FCT General
                           Partner dated April 30, 2003.

                  2.4(6)   Notice of exercise of right of first  refusal by UIDC
                           Management, Inc. and UIDC of Texas Co. dated May 28,
                           2003.

                  3.1(1)   The Liquidating Trust Agreement, dated as of July 3,
                           1995, by and between First City Bancorporation of
                           Texas, Inc. and Shawmut Bank Connecticut, National
                           Association (subsequently Fleet National Bank, State
                           Street Bank and Trust Company, now U.S. Bank National
                           Association), as Trustee.

                  10.1(3)  Employment Agreement, effective as of July 3, 1995,
                           by and between FCLT Loans Asset Corp. and Robert W.
                           Brown, as amended May 1, 1996.

                  10.2(2)  Settlement Agreement, dated as of June 22, 1994, as
                           amended as of January 30, 1995, by and among
                           FDIC-Corporate, the FDIC-Receivers and the First City
                           Parties.

                  10.3(3)  Conveyance and Indemnification Agreement, dated
                           December 23, 1996, between FDIC-Corporate, the
                           FDIC-Receivers, FCLT Loans, L.P. and the Trust.

                  10.4(4)  Extension of Conveyance and Indemnification
                           Agreement, dated in April 1999, between
                           FDIC-Corporate, the FDIC-Receivers, FCLT Loans, L.P.
                           and the Trust.

                  31.1     Rule 13a-14(a)/15d-14(a) Certification.

                  31.2     Rule 13a-14(a)/15d-14(a) Certification.

                                       23
<PAGE>

                  32.1     Principal Executive Officer Certification pursuant to
                           18 U.S.C. Section 1350, as adopted pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.

                  32.2     Principal Financial Officer Certification pursuant to
                           18 U.S.C. Section 1350, as adopted pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.
----------------------------

                  (1) Filed as the exhibit indicated to the Registration
                  Statement on Form 10 filed with the Securities and Exchange
                  Commission on May 1, 1996 and incorporated herein by
                  reference.

                  (2) Filed as the exhibit indicated to the Registration
                  Statement on Form 10/A filed with the Securities and Exchange
                  Commission on July 10, 1996 and incorporated herein by
                  reference.

                  (3) Filed as the exhibit indicated to the Form 10-K for the
                  fiscal year ended December 31, 1996 filed with the Securities
                  and Exchange Commission and incorporated herein by reference.

                  (4) Filed as the exhibit indicated to the Form 10-Q for the
                  quarter ended March 31, 1999 filed with the Securities and
                  Exchange Commission and incorporated herein by reference.

                  (5) Filed as the exhibit indicated to the Form 10-Q for the
                  quarter ended June 30, 2001 filed with the Securities and
                  Exchange Commission and incorporated herein by reference.

                  (6) Filed as Exhibits 2.1 and 2.2 to the Form 8-K filed with
                  the Securities and Exchange Commission on July 14, 2003 and
                  incorporated herein by reference.

                  (b) Reports on Form 8-K. No report on Form 8-K was filed by
                  the Registrant with the Commission during the quarterly period
                  ended December 31, 2003.

                                       24
<PAGE>

                                    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.

                                           U.S. Bank National Association,
                                           as Trustee

Date: March 18, 2004                       /s/ Cauna Silva
                                           ---------------------------------
                                           Name: Cauna Silva
                                           Title: Vice President

                                       25
<PAGE>

                           Exhibit Index

                  31.1     Rule 13a-14(a)/15d-14(a) Certification.

                  31.2     Rule 13a-14(a)/15d-14(a) Certification.

                  32.1     Principal Executive Officer Certification pursuant to
                           18 U.S.C. Section 1350, as adopted pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.

                  32.2     Principal Financial Officer Certification pursuant to
                           18 U.S.C. Section 1350, as adopted pursuant to
                           Section 906 of the Sarbanes-Oxley Act of 2002.