<PAGE>   1
                                    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 MARCH 31, 1999

                                       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 March 31, 1999, 2,460,911
units of Class B Beneficial Interests and 738,273 units of Class C Beneficial
Interests were outstanding.


<PAGE>   2
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>
                                                           MARCH 31,   DECEMBER 31,
                                                            1999         1998
                                                           ---------   -------
        Assets, at estimated fair value                  (unaudited)
<S>                                                        <C>         <C>    
Cash and cash equivalents ............................     $ 8,185     $13,474
Trust assets, net ....................................      41,244      44,015
                                                           -------     -------
       Total assets ..................................      49,429      57,489
                                                           -------     -------

        Less liabilities at face or estimated amount
Payables and accrued liabilities .....................       1,929       2,189
                                                           -------     -------
       Total liabilities .............................       1,929       2,189
                                                           -------     -------
Commitments and contingencies ........................          --          --

        Trust net asset value attributable to:
Class "B" Certificate, 2,460,911 units outstanding ...      47,500      55,300
Class "C" Certificate, 738,273 units outstanding .....          --          --
                                                           -------     -------
       Total net asset value .........................     $47,500     $55,300
                                                           =======     =======
</TABLE>


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

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED MARCH 31,
                                                     1999          1998 
                                                   --------      --------
<S>                                                <C>           <C>     
Changes in fair value of trust assets ........     $  2,113      $ 24,766
Interest income on short-term investments ....           97           185
Administrative expense .......................       (1,397)       (1,925)
                                                   --------      --------
       Net income ............................          813        23,026
                                                   --------      --------
Net asset value, beginning of period .........       55,300        91,300
Distributions on Class "B" Certificate .......       (8,613)      (17,226)
                                                   --------      --------
Net asset value, end of period ...............     $ 47,500      $ 97,100
                                                   ========      ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2

<PAGE>   3

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

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED MARCH 31, 
                                                                           1999             1998 
                                                                         --------         --------
<S>                                                                      <C>              <C>     
Cash flows from operating activities:
    Net income ..................................................        $    813         $ 23,026
    Adjustments to reconcile net income to net cash provided
    by operating activities:
       Changes in fair value of trust assets ....................          (2,113)         (24,766)
       Collections on trust assets, net of advances .............           4,862           44,621
       Decrease in payables and accrued liabilities .............            (238)            (692)
                                                                         --------         --------
          Net cash provided by operating activities .............           3,324           42,189
                                                                         --------         --------


Cash flows from financing activities:
    Distributions on Class "B" Certificate ......................          (8,613)         (17,226)
                                                                         --------         --------

          Net cash used in financing activities .................          (8,613)         (17,226)
                                                                         --------         --------

    Net increase (decrease) in cash and cash equivalents ........        $ (5,289)        $ 24,963
    Cash and cash equivalents, beginning of period ..............          13,474            7,948
                                                                         --------         --------
    Cash and cash equivalents, end of period ....................        $  8,185         $ 32,911
                                                                         ========         ========
</TABLE>


See accompanying notes to consolidated financial statements.

                                        3

<PAGE>   4

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                 March 31, 1999


(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 March 31, 1999, and its changes in net asset value in liquidation and cash
flows for the three month periods ended March 31, 1999 and 1998.

         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 generally accepted accounting principles. Actual
results could differ from those estimates.

         Certain amounts in the financial statements for prior periods have been
reclassified to conform with current financial statement presentation.

(B)      Trust Assets

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

<TABLE>
<CAPTION>
                                                             March 31,       December 31,
Estimated Gross Cash Flow by Type of Asset                     1999             1998
------------------------------------------                   ---------       ------------
                                                            (unaudited)
<S>                                                          <C>              <C>     
Borrowers' obligation on outstanding balance of:
    Performing loans ................................        $ 11,365         $ 12,306
    Nonperforming loans .............................             755              815
Receivable from the FDIC ............................           2,000            2,000
Real estate and other assets ........................          33,947           36,556
                                                             --------         --------
    Total ...........................................          48,067           51,677
                                                             --------         --------

    Discount required to reflect trust assets at
         estimated fair value .......................          (6,823)          (7,662)
                                                             --------         --------

Trust assets, net ...................................        $ 41,244         $ 44,015
                                                             ========         ========
</TABLE>


         For each asset, estimates of income, expense and net cash flow on a
monthly basis through the expected final disposition date are prepared. 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 March 31, 1999 and December 31, 1998, the projected monthly cash
flows were discounted at 11% to reflect the Trust assets at estimated fair
value. The Trust assets are highly concentrated in Texas.


                                        4

<PAGE>   5

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


         In the first quarter of 1998, the Trust negotiated and received a
settlement of approximately $22 million from its fidelity bond carriers. As a
result of this settlement, there are no remaining claims of this nature.

(C)      Distribution Priorities

         The Trust is required to apply all proceeds from 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 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% (which
percentage is lower due to employee reductions) 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 $70 million at March 31,
1999) 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 also reduced for distributions to Class B
Certificate holders. In the first quarter of 1999, $8.6 million, or $3.50 per
certificate, was distributed to Class B Certificate holders and a $417,000 bonus
was paid to certain former employees of the Debtor. In 1998, $67.7 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. In April
1999, $9.8 million, or $4.00 per certificate, was distributed to Class B
Certificate holders and a $464,000 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 $28.28 per unit as of March 31, 1999).

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


                                        5

<PAGE>   6

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


(D)      Commitments and Contingencies

         The Trust is involved in various legal proceedings in the ordinary
course of business. In the opinion of management of the Trust, the resolution of
such matters should not have a material adverse impact on the 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 later of (i)
January 3, 2000 or (ii) the termination date 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 financial position,
results of operations or liquidity of the Trust.


                                        6

<PAGE>   7


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

         The operations of the Trust for the first quarter of 1999 and 1998 are
summarized below (dollars in thousands):

<TABLE>
<CAPTION>
                                                    First Quarter    First Quarter
                                                        1999             1998 
                                                    -------------    -------------
<S>                                                   <C>              <C>     
Changes in fair value of trust assets ........        $  2,113         $ 24,766
Interest income on short-term investments ....              97              185
Administrative expense .......................          (1,397)          (1,925)
                                                      --------         --------
       Net income ............................        $    813         $ 23,026
                                                      ========         ========
</TABLE>


         The estimated fair value of the Trust's assets increased $2.1 million
in the first quarter of 1999 as compared to $24.8 million in the first quarter
of 1998. The 1998 increase was attributable to several factors, including a
settlement of approximately $22 million from the Trust's fidelity bond carriers.
Other factors which contributed to the enhancement of the net asset value of the
Trust's assets in the first quarter of 1999 and 1998 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 first
quarter of 1999 as compared to the first quarter of 1998 because less excess
funds were available.

         Administrative expense totaled $1.4 million in the first quarter of
1999 as compared to $1.9 million in the first quarter of 1998. A $417,000 bonus,
based on distributions to Class B Certificate holders, was paid to certain
former employees of the Debtor in the first quarter of 1999 as compared to a
$735,000 bonus paid in 1998. Professional fees totaled $.2 million in the first
quarter of 1999 as compared to $.3 million in the first quarter of 1998.

         In the first quarter of 1999, the Trust distributed $8.6 million, or
$3.50 per certificate, to Class B Certificate holders. This distribution was
made possible principally by $4.9 million in net collections on Trust assets in
1999 and cash held at December 31,1998. The Class B Beneficial Interests were
valued at $47.5 million at March 31, 1999. In April 1999, the Trust distributed
an additional $9.8 million, or $4.00 per certificate, to Class B Certificate
holders.



                                        7

<PAGE>   8

         Non-cash trust assets at March 31, 1999 and December 31, 1998 were
comprised of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                             March 31,       December 31,
Estimated Gross Cash Flow by Type of Asset                     1999             1998
------------------------------------------                   ---------       ------------
<S>                                                          <C>              <C>     
Borrowers' obligation on outstanding balance of:
    Performing loans ................................        $ 11,365         $ 12,306
    Nonperforming loans .............................             755              815
Receivable from the FDIC ............................           2,000            2,000
Real estate and other assets ........................          33,947           36,556
                                                             --------         --------
    Total ...........................................          48,067           51,677
                                                             --------         --------
    Discount required to reflect trust assets at
         estimated fair value .......................          (6,823)          (7,662)
                                                             --------         --------
Trust assets, net ...................................        $ 41,244         $ 44,015
                                                             ========         ========
</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
periodically reevaluates and revises its projected monthly cash flows on an
asset by asset basis. At March 31, 1999 and December 31, 1998, the projected
monthly cash flows were discounted at 11% to reflect the Trust assets at
estimated fair value.

         The March 31, 1999 balance sheet of the Trust reflects a value of $27.5
million for a 67% interest in a partnership which owns the First City Tower.
First City Tower is a Class A office building located in downtown Houston. The
$27.5 million valuation reflects significant discounts against the asset because
of litigation (probable appeal of summary judgment rendered in favor of the
Trust) on the building, and because it is only a 67% interest. Using the current
valuation of the Trust, the interest in the First City Tower would have to be
sold for an amount in excess of approximately $50 million for the Class C
Certificates to realize any value. With the recent run-up in values for Houston
downtown office buildings, and assuming the summary judgment is upheld and the
sales price is not drastically discounted because the Trust's interest is only
67%, it is possible that the Class C Certificates could have value at some point
in the future. Investors are advised, however, that the Class C Certificates are
highly speculative securities.

         In the first quarter of 1998, the Trust negotiated and received a
settlement of approximately $22 million from its fidelity bond carriers. As a
result of this settlement, there are no remaining claims of this nature.



                                        8

<PAGE>   9


PART II - OTHER INFORMATION

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.

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

         27.1     Financial Data Schedule.
</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.

         (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 March
         31, 1999.


                                        9

<PAGE>   10

                                   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: April 30, 1999                      /s/ Susan T. Keller
                                          --------------------------------------
                                          Name: Susan T. Keller
                                               ---------------------------------
                                          Title: Vice President
                                                --------------------------------



                                       10

<PAGE>   11
                               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.

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

         27.1     Financial Data Schedule.
</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.