<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, 2002
                                       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 1070, 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 February 28, 2003 there were 2,454,310 units of Class B Beneficial
Interests and 725,729 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 our behalf are expressly qualified
in their entirety by this paragraph. We do 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.

      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 and will continue to be
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, income producing real estate and 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 of future
reductions from the reserve and increasing the initial distribution made by the
FDIC to the Trust.

                                        2
<PAGE>
      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 July 2002, Gordonville Corporation, N.V., New Coronado Investment
Corp., N.V. and Corona Investments, N.V., companies which claim to own
approximately 46% of the 725,729 Class C Certificates (acquired in various
tender offers at prices varying from approximately $1.00 to $1.50) filed a
lawsuit against the Trustee and individual members of the Portfolio Committee of
the Trust in the U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division (Gordonville Corporation, et al. vs. State Street Bank and Trust
Company et al., Case No. 392-39474-HCA-11). The complaint alleges, among other
things, that the Trustee and the individual members of the Portfolio Committee
breached their fiduciary duties to the Class C Certificate holders in a manner
which would prevent the Class C Certificate holders from realizing any value.
The complaint seeks $14 million in actual damages, plus punitive damages and
attorneys' fees. Management of the Trust and the members of the Portfolio
Committee believe that the lawsuit is entirely without merit and intend to
vigorously defend against the action. In November 2002, the Bankruptcy Court
granted the Trust's motion to dismiss the lawsuit without prejudice. In February
2003, the lawsuit was re-filed in the District Court of Harris County, Texas.

      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, 2002.

                                        3
<PAGE>
                                     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, 2002, was 55 and
810, respectively. 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
                                     -------------------------------------------------------------------------------
                                                      2002                                   2001
                                     -------------------------------------- ----------------------------------------
                                          Market Price            Cash          Market Price               Cash
                                     ---------------------    Distributions ---------------------      Distributions
Quarter Ended                           High        Low           Paid        High         Low             Paid
-------------                        ---------   ---------   -------------- ---------   ---------         -------
<S>                                  <C>         <C>         <C>            <C>         <C>                <C>
March 31 ........................    $   13.80   $   12.50   $    --        $   15.00   $   12.00          $1.00
June 30 .........................        14.50       13.70        --            15.00       12.00            --
September 30 ....................        14.20       13.80        --            14.00       11.00            --
December 31 .....................        14.30       13.90        --            13.75       11.25            --
</TABLE>

<TABLE>
<CAPTION>
                                                       Class C Beneficial Interests
                                        ------------------------------------------------------------
                                                   2002                            2001
                                        --------------------------        --------------------------
                                               Market Price                      Market Price
                                        --------------------------        --------------------------
Quarter Ended                             High              Low             High              Low
-------------                           --------          --------        --------          --------
<S>                                     <C>               <C>             <C>               <C>
March 31 .............................. $   1.55          $   1.28        $   2.00          $    .71
June 30 ...............................     1.35               .01            2.40               .60
September 30 ..........................      .05               .01            2.40              1.40
December 31 ...........................      .10               .05            1.50              1.40
</TABLE>

      No distributions were made to Class B or Class C 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.

      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.

                                       4
<PAGE>
      Fourth, Class B Certificate holders are entitled to distributions up to
the Pour-Over Level. The Pour-Over Level (approximately $55 million at December
31, 2002) 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.

      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 $22.43 per unit as of December 31, 2002).

Item 6. Selected Financial Data.

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                       -----------------------------------------------------------
(Dollars in thousands)                                   2002          2001          2000       1999        1998
                                                       --------      --------      -------     -------     -------
<S>                                                    <C>           <C>           <C>         <C>         <C>
Income (loss)(1) ....................................  $ (5,293)     $ (4,968)     $ 5,952     $24,323     $38,534
Expenses ............................................     1,507         1,778        2,679       3,844       6,859
Net income (loss)(1) ................................    (6,800)       (6,746)       3,273      20,479      31,675
Distributions on Class "B" Certificate ..............      --           2,454        9,817      23,316      67,494

At year end:
            Total assets ............................    31,631        38,581       48,028      54,421      57,489
            Class "B" Certificate ...................    30,100        36,900       46,100      52,400      55,300
</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)                                             2002             2001             2000
                                                                 -------          -------          -------
<S>                                                              <C>              <C>              <C>
Changes in fair value of trust assets ......................     $(5,350)         $(5,077)         $ 5,719
Interest income on short-term investments ..................          57              109              233
Administrative expense .....................................      (1,507)          (1,778)          (2,679)
                                                                 -------          -------          -------
            Net income (loss) ..............................     $(6,800)         $(6,746)         $ 3,273
                                                                 =======          =======          =======
</TABLE>

                                       5
<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. The Class B Beneficial Interests were valued at $30.1
million at December 31, 2002.

        Non-cash trust assets at December 31, 2002 and 2001 were comprised of
the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                                        December 31,
                                                                --------------------------------
Estimated Gross Cash Flow by Type of Asset                        2002                    2001
------------------------------------------                      -------                 --------
<S>                                                             <C>                     <C>
Borrowers' obligation on outstanding balance of:
   Performing loans .....................................       $   438                 $  1,867
   Nonperforming loans ..................................             6                       32
Real estate and other assets ............................        31,616                   38,651
                                                                -------                 --------
   Total ................................................        32,060                   40,550
                                                                -------                 --------
   Discount required to reflect trust assets at
        estimated fair value ............................        (4,655)                  (5,234)
                                                                -------                 --------
Trust assets, net .......................................       $27,405                 $ 35,316
                                                                =======                 ========
</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, 2002 and 2001, 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.

                                       6
<PAGE>
        On March 15, 2002, two subsidiaries of the Trust settled all existing
litigation with UIDC Management, Inc. ("UIDC") et al. The Trust and UIDC are
partners in FC Tower Property Partners, L.P., an entity which owns the First
City Tower building in Houston, Texas. The dispute between the parties traces to
a "right of first refusal" issue occurring in 1997.

        The settlement allows the Trust to market its interest in the
partnership. UIDC will retain its right of first refusal and may exercise that
right at a discount from the purchase price. The discount is equal to 50% of the
amount by which a third party offer exceeds $31 million. The Trust's share of
any sale proceeds would be $31 million plus 50% of the price in excess of $31
million. Further, if the Trust is unsuccessful in (a) obtaining a qualified
offer by June 2003 and (b) executing on a sale of the interest by December 2003,
its 67% interest in the partnership will be reduced to 45% and UIDC's 33%
interest will increase to 55%.

        The Trust is currently in negotiations with potential buyers. As a
result of the deteriorating commercial real estate market in Houston, at
December 31, 2002, the value of the partnership interest was adjusted to $31
million from $38 million at September 30, 2002. The consolidated statements of
net assets in liquidation have never reflected any value for the Class C
Certificates, and it is highly unlikely that the Class C Certificates will have
any value.

                              2001 COMPARED TO 2000

        The estimated fair value of the Trust's assets decreased $5.1 million in
2001 as compared to an increase of $5.7 million in 2000. The 2001 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 2001 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 2001 as compared
to 2000 because less excess funds were available.

        Administrative expense totaled $1.8 million in 2001 as compared to $2.7
million in 2000. 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 a $.4 million bonus paid to such employees in 2000. Professional fees totaled
$.6 million in 2001 as compared to $.7 million in 2000.

        In 2001, the Trust distributed $2.5 million, or $1.00 per Certificate,
to Class B Certificate holders. This distribution was made possible principally
by $4.1 million in net collections on Trust assets in 2001 and cash held at
December 31, 2000.

        In June 2001, the Bankruptcy Court extended the life of the Trust from
January 3, 2002 to January 3, 2004 in order to continue the orderly disposal of
assets and the settlement of claims and obligations of the Trust.

                                       7
<PAGE>
                          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, income producing real estate
and 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.

        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,
                                                                         ------------------------------
                                                                           2002                   2001
                                                                         -------                -------
<S>                                                                      <C>                    <C>
             Assets, at estimated fair value
Cash and cash equivalents ..........................................     $ 4,226                $ 3,265
Trust assets, net ..................................................      27,405                 35,316
                                                                         -------                -------
      Total assets .................................................      31,631                 38,581
                                                                         -------                -------

             Less liabilities at face or estimated amount
Payables and accrued liabilities ...................................       1,531                  1,681
                                                                         -------                -------
      Total liabilities ............................................       1,531                  1,681
                                                                         -------                -------
Commitments and contingencies ......................................        --                     --

             Trust net asset value attributable to:
Class "B" Certificate, 2,454,310 units outstanding .................      30,100                 36,900
Class "C" Certificate, 725,729 units outstanding ...................        --                     --
                                                                         -------                -------
      Total net asset value ........................................     $30,100                $36,900
                                                                         =======                =======
</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,
                                                     ----------------------------------------------
                                                       2002               2001               2000
                                                     --------           --------           --------
<S>                                                  <C>                <C>                <C>
Changes in fair value of trust assets .............  $ (5,350)          $ (5,077)          $  5,719
Interest income on short-term investments .........        57                109                233

Administrative expense ............................    (1,507)            (1,778)            (2,679)
                                                     --------           --------           --------
      Net income (loss) ...........................    (6,800)            (6,746)             3,273
                                                     --------           --------           --------
Net asset value, beginning of period ..............    36,900             46,100             52,400
Distributions on Class "B" Certificate ............      --               (2,454)            (9,830)
Eliminate liability for distributions on
   unsurrendered Class "B" Certificates ...........      --                 --                  257
                                                     --------           --------           --------
Net asset value, end of period ....................  $ 30,100           $ 36,900           $ 46,100
                                                     ========           ========           ========
</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,
                                                                         --------------------------------------------
                                                                          2002              2001               2000
                                                                         -------           -------           --------
<S>                                                                      <C>               <C>               <C>
Cash flows from operating activities:
   Net income (loss) ...............................................     $(6,800)          $(6,746)          $  3,273
   Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
      Changes in fair value of trust assets ........................       5,350             5,077             (5,719)
      Collections on trust assets, net of advances .................       2,456             4,063             10,382
      Increase (decrease) in payables and accrued liabilities ......         (45)             (231)               166
                                                                         -------           -------           --------
        Net cash provided by operating activities ..................         961             2,163              8,102
                                                                         -------           -------           --------
Cash flows from financing activities:
   Distributions on Class "B" Certificate ..........................        --              (2,454)            (9,817)
                                                                         -------           -------           --------
        Net cash used in financing activities ......................        --              (2,454)            (9,817)
                                                                         -------           -------           --------
   Net increase (decrease) in cash and cash equivalents ............     $   961           $  (291)          $ (1,715)
   Cash and cash equivalents, beginning of period ..................       3,265             3,556              5,271
                                                                         -------           -------           --------
   Cash and cash equivalents, end of period ........................     $ 4,226           $ 3,265           $  3,556
                                                                         =======           =======           ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       10
<PAGE>
                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                        December 31, 2002, 2001 and 2000

(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 will
        be 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. 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 shall be 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 is
        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)


        By order of the Bankruptcy Court, unsurrendered securities of the Debtor
        were required to be submitted for exchange into Class B or Class C
        Certificates by May 31, 2000. As of that date, securities representing
        2,454,310 Class B Certificates and 725,729 Class C Certificates had been
        exchanged. Prior to May 31, 2000, Certificates outstanding were assumed
        equal to an exchange of all Debtor securities. Accordingly, in the
        second quarter of 2000, a liability for distributions on the
        unsurrendered Class B Certificates was reversed. Holders of the
        remaining unsurrendered securities of the Debtor will have no rights to
        receive any distributions on Trust securities.

        (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, 2002 and
        2001, 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, income producing real estate and 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

                                       12
<PAGE>
                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)


        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.

        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 aprepare theses to 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:

<TABLE>
<CAPTION>
           (Dollars in thousands)
                                                                            December 31,
                                                                      --------------------------
           Estimated Gross Cash Flow by Type of Asset                   2002              2001
           ------------------------------------------                 --------          --------
<S>                                                                   <C>               <C>
           Borrowers' obligation on outstanding balance of:
              Performing loans ...................................    $    438          $  1,867
              Nonperforming loans ................................           6                32
           Real estate and other assets ..........................      31,616            38,651
                                                                      --------          --------
              Total ..............................................      32,060            40,550
                                                                      --------          --------
              Discount required to reflect trust assets at
                   estimated fair value ..........................      (4,655)           (5,234)
                                                                      --------          --------
           Trust assets, net .....................................    $ 27,405          $ 35,316
                                                                      ========          ========
</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, 2002 and 2001, 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.

        On March 15, 2002, two subsidiaries of the Trust settled all existing
        litigation with UIDC Management, Inc. ("UIDC") et al. The Trust and UIDC
        are partners in FC Tower Property Partners, L.P., an entity which owns
        the First City Tower building in Houston, Texas. The dispute between the
        parties traces to a "right of first refusal" issue occurring in 1997.

        The settlement allows the Trust to market its interest in the
        partnership. UIDC will retain its right of first refusal and may
        exercise that right at a discount from the purchase price. The discount
        is equal to 50% of the amount by which a third party offer exceeds $31
        million. The Trust's share of any sale proceeds would be $31 million
        plus 50% of the price in excess of $31 million. Further, if the Trust is
        unsuccessful in (a) obtaining a qualified offer by June 2003 and (b)
        executing on a sale of the interest by December 2003, its 67% interest
        in the partnership will be reduced to 45% and UIDC's 33% interest will
        increase to 55%.

                                       14
<PAGE>
                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)


        The Trust is currently in negotiations with potential buyers. As a
        result of the deteriorating commercial real estate market in Houston, at
        December 31, 2002, the value of the partnership interest was adjusted to
        $31 million from $38 million at September 30, 2002. The consolidated
        statements of net assets in liquidation have never reflected any value
        for the Class C Certificates, and it is highly unlikely that the Class C
        Certificates will have any value.

(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.

        Fourth, Class B Certificate holders are entitled to distributions up to
        the Pour-Over Level. The Pour-Over Level (approximately $55 million at
        December 31, 2002) 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
        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. In 2000, $9.8 million, or $4.00 per
        Certificate, was distributed to Class B Certificate holders and a $.4
        million bonus was paid to certain former employees of the Debtor. In
        1999, $23.3 million, or $9.50 per Certificate, was distributed to Class
        B Certificate holders and a $1.1 million bonus was paid to certain
        former employees of the Debtor. In 1998, $67.5 million, or $27.50 per
        Certificate, was distributed to Class B Certificate holders and a $2.6
        million 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 $22.43 per unit as of December 31, 2002).

        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 (principally the partnership
        interest discussed in Note B). The determination of the net asset value
        of the Trust in the accompanying consolidated statements of net assets
        in liquidation

                                       15
<PAGE>
                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)


        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 July 2002, Gordonville Corporation, N.V., New Coronado Investment
        Corp., N.V. and Corona Investments, N.V., companies which claim to own
        approximately 46% of the 725,729 Class C Certificates (acquired in
        various tender offers at prices varying from approximately $1.00 to
        $1.50) filed a lawsuit against the Trustee and individual members of the
        Portfolio Committee of the Trust in the U.S. Bankruptcy Court for the
        Northern District of Texas, Dallas Division (Gordonville Corporation, et
        al. vs. State Street Bank and Trust Company et al., Case No.
        392-39474-HCA-11). The complaint alleges, among other things, that the
        Trustee and the individual members of the Portfolio Committee breached
        their fiduciary duties to the Class C Certificate holders in a manner
        which would prevent the Class C Certificate holders from realizing any
        value. The complaint seeks $14 million in actual damages, plus punitive
        damages and attorneys' fees. Management of the Trust and the members of
        the Portfolio Committee believe that the lawsuit is entirely without
        merit and intend to vigorously defend against the action. In November
        2002, the Bankruptcy Court granted the Trust's motion to dismiss the
        lawsuit without prejudice. In February 2003, the lawsuit was re-filed in
        the District Court of Harris County, Texas.

        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.

                                       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, 2002 and 2001, 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, 2002. 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, 2002 and 2001, and the
results of their 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,
2002, in conformity with accounting principles generally accepted in the United
States of America.

                                    KPMG LLP

Houston, Texas
January 24, 2003

                                       17
<PAGE>
                           FIRSTCITY LIQUIDATING TRUST
                   SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                  2002                                        2001
                                -----------------------------------------    ------------------------------------------
                                 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) ...........    $ 448      $ 336      $ 314      $(6,448)     $ 926      $ 499      $ 289      $(6,791)
Interest income on
  short-term investments ....       14         13         16           14         49         23         20           17
Administrative expense ......     (462)      (349)      (330)        (366)      (621)      (322)      (309)        (526)
                                 -----      -----      -----      -------      -----      -----      -----      -------
Net income (loss)(1) ........    $  --      $  --      $  --      $(6,800)     $ 354      $ 200      $  --      $(7,300)
                                 =====      =====      =====      =======      =====      =====      =====      =======
</TABLE>
------------
(1)   Net of $7 million and $7 million, respectively, reduction in value of 67%
      partnership interest in First City Tower in fourth quarter of 2002 and
      2001.



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, 59, 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, 54, has been President of FCLT Loans Asset Corp. 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, 54, 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, 60, 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.

         Officers and Others

         Jerry D. Thompson, 47, has been Vice President of FCLT Loans Asset
Corp. since February 1997. Prior thereto, Mr. Thompson was Vice President of FCB
Real Estate Services, Inc., a subsidiary of the Trust and the Debtor.

         C. Ivan Wilson, 75, 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 $20,500 in each of 2002, 2001 and 2000. Unless
renegotiated, annual administrative fees to be paid to the Trustee shall remain
constant.

                                       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>
                                                        ANNUAL COMPENSATION(1)
                  NAME AND                            --------------------------
            PRINCIPAL POSITION        YEAR            SALARY               BONUS
            ------------------        ----            ------               -----
<S>                                   <C>          <C>                   <C>
         Robert W. Brown              2002         $  250,000            $     -
           - President of FCLT        2001            250,000              39,225
             Loans Asset Corp.        2000            250,000             155,040

         C. Ivan Wilson               2002         $     -               $     -
           - Vice Chairman of         2001               -                 39,225
             FirstCity                2000               -                155,040

         Joe S. Greak                 2002         $     -               $     -
           - Senior Vice President    2001               -                 19,495
             of FirstCity             2000               -                 77,055

         Jerry D. Thompson            2002         $  100,000            $     -
           - Vice President of FCLT   2001            100,000               2,725
             Loans Asset Corp.        2000            100,000              10,770
</TABLE>

------------
(1) Amounts reported for Mr. Wilson and Mr. Greak relate only to Exhibit O
    of 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, 2002,
Mr. Brown was paid $1.5 million in performance-oriented bonuses pursuant to
Exhibit O to the Plan. The Brown Employment Agreement provides for a

                                       20
<PAGE>
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.

         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. No bonuses were paid in 2002. In 2001, bonuses totaling
$112,000 ($39,225 to Mr. Brown) were paid pursuant to Exhibit O. In 2000,
bonuses totaling $.4 million ($.1 million to Mr. Brown) were paid pursuant to
Exhibit O. In 1999, bonuses totaling $1.1 million ($.4 million to Mr. Brown)
were paid pursuant to Exhibit O. In 1998, bonuses totaling $2.6 million ($.9
million to Mr. Brown) were paid pursuant to Exhibit O.

Item 12. 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
January 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 JANUARY 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 .....................................             --          --
Jerry D. Thompson ...................................            200           *
C. Ivan Wilson ......................................             --          --

All Portfolio Committee members and
  executive officers as a group (6 persons) .........         98,300         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 JANUARY 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 .....................................             --          --
Jerry D. Thompson ...................................          1,269           *
C. Ivan Wilson ......................................             15           *

All Portfolio Committee members and
  executive officers as a group (6 persons) .........          1,481           *
</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.

         As of December 31, 2002, management of the Trust performed an
evaluation of disclosure controls and procedures. 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

<TABLE>
<CAPTION>
        Exhibit
          No.                      Description
        -------                    -----------
<S>             <C>
         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.

         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.

        99.1    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.

        99.2    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.
</TABLE>
        --------------------
        (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.

                                       23
<PAGE>
        (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.


    (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, 2002.

                                       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 27, 2003               /s/ Cauna Silva
                                    -------------------------------
                                    Name: Cauna Silva
                                    Title: Vice President


                                 CERTIFICATIONS

I, Robert W. Brown, Principal Executive Officer of FirstCity Liquidating Trust,
certify that:

1.    I have reviewed this annual report on Form 10-K of FirstCity Liquidating
      Trust;

2.    Based on my knowledge, this annual report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this annual report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this annual report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this annual
      report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:

      a)    Designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this annual
            report is being prepared;

      b)    Evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this annual report (the "Evaluation Date"); and

                                       25
<PAGE>
      c)    Presented in this annual report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):

      a)    All significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      b)    Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      annual report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

Date:   March 27, 2003

                                                   /s/ Robert W. Brown
                                                   ---------------------------
                                                   Robert W. Brown
                                                   Principal Executive Officer



I, Stephen J. Barta, Principal Financial Officer of FirstCity Liquidating Trust,
certify that:

1.    I have reviewed this annual report on Form 10-K of FirstCity Liquidating
      Trust;

2.    Based on my knowledge, this annual report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this annual report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this annual report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this annual
      report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:

                                       26
<PAGE>
      a)    Designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this annual
            report is being prepared;

      b)    Evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this annual report (the "Evaluation Date"); and

      c)    Presented in this annual report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):

      a)    All significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      b)    Any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      annual report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

Date:   March 27, 2003

                                                   /s/ Stephen J. Barta
                                                   ----------------------------
                                                   Stephen J. Barta
                                                   Principal Financial Officer


                                       27
<PAGE>
                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>
        Exhibit
          No.                      Description
        -------                    -----------
<S>             <C>
         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.

         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.

        99.1    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.

        99.2    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.
</TABLE>
        --------------------
        (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.