<PAGE>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark one)


[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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
      incorporation or organization)                     Identification No.)

  1001 Fannin, Suite 505, Houston, Texas                        77002
 (Address of principal executive offices)                    (Zip Code)

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

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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of June 30, 2002, 2,454,310
units of Class B Beneficial Interests and 725,729 units of Class C Beneficial
Interests were outstanding.


<PAGE>


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Form 10-Q 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. These statements are based upon
assumptions that are subject to change 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.

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

<Table>
<Caption>
                                                                            JUNE 30,         DECEMBER 31,
                                                                              2002               2001
                                                                            --------         ------------
                       Assets, at estimated fair value                     (Unaudited)
<S>                                                                         <C>              <C>
Cash and cash equivalents................................................   $  3,036         $      3,265
Trust assets, net........................................................     35,470               35,316
                                                                            --------         ------------
       Total assets......................................................     38,506               38,581
                                                                            --------         ------------
               Less liabilities at face or estimated amount
Payables and accrued liabilities.........................................      1,606                1,681
                                                                            --------         ------------
       Total liabilities.................................................      1,606                1,681
                                                                            --------         ------------
Commitments and contingencies............................................          -                    -
               Trust net asset value attributable to:
Class "B" Certificate, 2,454,310 units outstanding.......................     36,900               36,900
CLass "C" Certificate, 725,729 units outstanding.........................          -                    -
                                                                            --------         ------------
       Total net asset value.............................................   $ 36,900         $     36,900
                                                                            ========         ============
</Table>

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

<Table>
<Caption>
                                                        THREE MONTHS                 SIX MONTHS
                                                       ENDED JUNE 30,              ENDED JUNE  30,
                                                   ----------------------      ----------------------
                                                     2002          2001          2002          2001
                                                   --------      --------      --------      --------
<S>                                                <C>           <C>           <C>           <C>
Changes in fair value of trust assets ........     $    336      $    499      $    784      $  1,425
Interest income on short-term investments ....           13            23            27            72
Administrative expense .......................         (349)         (322)         (811)         (943)
                                                   --------      --------      --------      --------
       Net income ............................           --           200            --           554
                                                   --------      --------      --------      --------
Net asset value, beginning of period .........       36,900        44,000        36,900        46,100
Distributions on Class "B" Certificate .......           --            --            --        (2,454)
                                                                 --------      --------      --------
Net asset value, end of period ...............     $ 36,900      $ 44,200      $ 36,900      $ 44,200
                                                   ========      ========      ========      ========
</Table>

See accompanying notes to consolidated financial statements.


                                       2
<PAGE>


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

<Table>
<Caption>
                                                                      SIX MONTHS ENDED JUNE 30,
                                                                     --------------------------
                                                                        2002            2001
                                                                     ----------      ----------
<S>                                                                  <C>             <C>
Cash flows from operating activities:
    Net income .................................................     $       --      $      554
    Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
       Changes in fair value of trust assets ...................           (784)         (1,425)
       Collections on trust assets, net of advances ............            630           2,264
       Decrease in payables and accrued liabilities ............            (75)           (306)
                                                                     ----------      ----------
          Net cash provided by (used in) operating activities ..           (229)          1,087
                                                                     ----------      ----------


Cash flows from financing activities:
    Distributions on Class "B" Certificate .....................             --          (2,454)
                                                                     ----------      ----------

       Net cash used in financing activities ...................             --          (2,454)
                                                                     ----------      ----------

    Net decrease in cash and cash equivalents ..................     $     (229)     $   (1,367)
    Cash and cash equivalents, beginning of period .............          3,265           3,556
                                                                     ----------      ----------
    Cash and cash equivalents, end of period ...................     $    3,036      $    2,189
                                                                     ==========      ==========
</Table>


See accompanying notes to consolidated financial statements.


                                       3
<PAGE>


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 30, 2002


(A)      Basis of Presentation

         The unaudited consolidated financial statements of FirstCity
         Liquidating Trust (the "Trust", formerly the "Debtor") reflect, in the
         opinion of management, all adjustments, consisting only of normal and
         recurring adjustments, necessary to present fairly the Trust's net
         assets in liquidation at June 30, 2002, its changes in net asset value
         in liquidation for the three month and six month periods ended June 30,
         2002 and 2001 and cash flows for the six month periods ended June 30,
         2002 and 2001.

         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.

(B)      Trust Assets

         Trust assets are comprised of the following (dollars in thousands):

<Table>
<Caption>
                                                                        June 30,          December 31,
         Estimated Gross Cash Flow by Type of Asset                       2002                2001
                                                                       -----------        ------------
                                                                       (Unaudited)
<S>                                                                    <C>                <C>
         Borrowers' obligation on outstanding balance of:
             Performing loans .............................            $     1,739        $      1,867
             Nonperforming loans ..........................                     16                  32
         Real estate and other assets .....................                 38,611              38,651
                                                                       -----------        ------------
             Total ........................................                 40,366              40,550
                                                                       -----------        ------------

             Discount required to reflect trust assets at
                  estimated fair value ....................                 (4,896)             (5,234)
                                                                       -----------        ------------

         Trust assets, net.................................            $    35,470        $     35,316
                                                                       ===========        ============
</Table>


                                       4
<PAGE>


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


         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 June 30, 2002 and December 31, 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%.

         At June 30, 2002, the partnership interest is valued at $38 million
         (based on an estimated sale price of $45 million). 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 the liquidation and
         disposition of the Trust's assets first to payment of normal operating
         expenses. Second, Trust proceeds totaling $188 million were distributed
         to FirstCity Financial Corporation ("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.



                                       5
<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 $53 million at
         June 30, 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 the first six months of 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 $21.72 per unit as of June 30, 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 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.



                                       6
<PAGE>

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


         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.


                                       7
<PAGE>


Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

         The operations of the Trust for the second quarter and first six months
of 2002 and 2001 are summarized below (dollars in thousands):

<Table>
<Caption>
                                                          SECOND                    SIX MONTHS
                                                          QUARTER                  ENDED JUNE 30,
                                                  ----------------------      ----------------------
                                                    2002          2001          2002          2001
                                                  --------      --------      --------      --------
<S>                                               <C>           <C>           <C>           <C>
Changes in fair value of trust assets .......     $    336      $    499      $    784      $  1,425
Interest income on short-term investments ...           13            23            27            72
Administrative expense ......................         (349)         (322)         (811)         (943)
                                                  --------      --------      --------      --------
       Net income ...........................     $     --      $    200      $     --      $    554
                                                  ========      ========      ========      ========
</Table>

               SECOND QUARTER 2002 COMPARED TO SECOND QUARTER 2001

         The estimated fair value of the Trust's assets increased $.3 million in
the second quarter of 2002 as compared to $.5 million in the second quarter of
2001. Factors which contributed to the enhancement of the net asset value of the
Trust's assets in the second quarter of 2002 and 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 the second
quarter of 2002 as compared to the second quarter of 2001 because of lower money
market yields. Administrative expense totaled $.3 million in the second quarter
of 2002 and 2001.

    SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30, 2001

         The estimated fair value of the Trust's assets increased $.8 million in
the first six months of 2002 as compared to $1.4 million in the first six months
of 2001. Factors which contributed to the enhancement of the net asset value of
the Trust's assets in the first six months of 2002 and 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 2002 as compared
to 2001 because of lower money market yields.

         Administrative expense totaled $.8 million in the first six months of
2002 as compared to $.9 million in the first six months of 2001. A $112,000
bonus, based on distributions to Class B Certificate holders, was paid to
certain former employees of the Debtor in the first six months of 2001


                                       8
<PAGE>


as compared to no bonus paid to such employees in 2002. Professional fees
totaled $.3 million in 2002 as compared to $.2 million in 2001.

         Net collections on Trust assets in the first six months of 2002 totaled
$.6 million as compared to $2.3 million in 2001. In July 2002, a loan of $1.2
million was paid in full. The Class B Beneficial Interests were valued at $36.9
million at June 30, 2002.

         Non-cash trust assets at June 30, 2002 and December 31, 2001 were
comprised of the following (dollars in thousands):

<Table>
<Caption>
                                                          June 30,     December 31,
Estimated Gross Cash Flow by Type of Asset                  2002          2001
                                                          --------     ------------
<S>                                                       <C>          <C>
Borrowers' obligation on outstanding balance of:
   Performing loans .................................     $  1,739     $      1,867
   Nonperforming loans ..............................           16               32
Real estate and other assets ........................       38,611           38,651
                                                          --------     ------------
   Total ............................................       40,366           40,550
                                                          --------     ------------
   Discount required to reflect Trust assets at
        estimated fair value ........................       (4,896)          (5,234)
                                                          --------     ------------
Trust assets, net ...................................     $ 35,470     $     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 June 30, 2002 and December 31, 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%.

         At June 30, 2002, the partnership interest is valued at $38 million
(based on an estimated sale price of $45 million). 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.


                                       9
<PAGE>


PART II - OTHER INFORMATION

Item 1. 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.


                                       10
<PAGE>


Item 6. Exhibits and Reports on Form 8-K.

         (a) 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, now State Street Bank and Trust Company),
                  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.
</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.

         (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 June
         30, 2002.


                                       11
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements 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.


                               STATE STREET BANK AND TRUST COMPANY,
                               as Trustee



Date: July 25, 2002            /s/ Cauna Silva
                               -------------------------------------------------
                               Name: Cauna Silva
                                    --------------------------------------------
                               Title: Vice President
                                     -------------------------------------------