Värde Partners, Inc. Completes Acquisition of FirstCity Financial Corporation

  Värde Partners, Inc. Completes Acquisition of FirstCity Financial
  Corporation

Business Wire

MINNEAPOLIS & WACO, Texas -- May 17, 2013

Värde Partners, Inc. (“Värde” or the “Company”) and FirstCity Financial
Corporation (NASDAQ: FCFC, “FirstCity”) today announced that certain funds
managed by Värde completed the acquisition of FirstCity.

As previously announced and pursuant to the terms of the transaction, Mark B.
Horrell, who previously served as Senior Vice President and Head of U.S.
Acquisitions of FirstCity, has been appointed Chief Executive Officer of
FirstCity, succeeding James T. Sartain. Mr. Sartain will retire and join Värde
as a consultant. Additionally, Terry R. DeWitt, Senior Vice President and Head
of Global Acquisitions of FirstCity, and James C. Holmes, Senior Vice
President and Managing Director of FirstCity, will become Chief Credit Officer
and Chief Operating Officer, respectively, and will assist Mr. Horrell in
leading the operations of FirstCity. FirstCity will retain its headquarters in
Waco and will maintain its office in Dallas, Texas.

“We are excited to complete this acquisition and look forward to continuing
our work with the experienced and capable team at FirstCity,” said Jason
Spaeth, a Managing Partner of Värde. “We are confident that we will be able to
capitalize on current and future market opportunities.”

“Today marks an important next step in FirstCity’s development and position in
the marketplace,” said Mark B. Horrell, Chief Executive Officer of FirstCity.
“Under Värde’s leadership and as a privately held company, FirstCity will have
enhanced financial flexibility, enabling us to focus on our strategic
direction and long-term goals. On behalf of FirstCity’s management team, I
would like to thank our clients, stockholders and dedicated employees for
their support throughout this process.”

Värde and certain of its affiliates have a 20-year working history with
FirstCity, and since 2009 have co-invested in a substantial majority of
FirstCity’s U.S. distressed asset acquisitions. In recent years, Värde and
FirstCity have jointly invested over $800 million to purchase distressed
assets with an unpaid principal balance in excess of $1.5 billion.

Under the terms of the merger agreement, FirstCity stockholders are entitled
to receive $10.00 per share in cash, without interest, for each share of
FirstCity common stock they own immediately prior to the effective time of the
merger. Letters of transmittal directing FirstCity stockholders of record to
deliver their share certificates to the disbursing agent in exchange for
payment of the merger consideration will be distributed within the next two
weeks. Stockholders of record should be in receipt of the letter of
transmittal before surrendering their share certificates. Stockholders who
hold shares through a bank or broker will not have to take any action to
receive the merger consideration in exchange for their shares, as such process
will be handled by the bank or broker.

Trading of FirstCity's common stock on the NASDAQ Global Select Market will be
suspended following the close of markets today and FirstCity expects that
NASDAQ will file a notification of removal of listing and registration on Form
25 with the Securities and Exchange Commission (“SEC”) with respect to
FirstCity’s common stock following the close of markets today. FirstCity
intends to deregister its common stock and to suspend its reporting
obligations under the Securities Exchange Act of 1934, as amended, by promptly
filing a Form 15 with the SEC.

Haynes and Boone, LLP served as legal counsel and Lazard Middle Market LLC
served as financial advisor to FirstCity in connection with the transaction.
Morris, Nichols, Arsht & Tunnell LLP served as Delaware legal counsel to
FirstCity’s Board of Directors. Mayer Brown LLP served as Värde’s legal
counsel and Sandler O’Neill + Partners, L.P. served as its financial advisor.

About Värde

Founded in 1993, Värde is a leading alternative investment fund manager with
over $7 billion in assets under management. Värde’s expertise is in credit,
distressed and special situation investing in a wide range of assets,
including corporate securities, consumer loans, structured securities, real
estate, and capital equipment. With offices in Minneapolis, London and
Singapore, Värde invests in markets across the globe.

About FirstCity Financial Corporation

FirstCity Financial Corporation is a diversified financial services company
with operations dedicated primarily to distressed asset acquisitions and
special situations investments. FirstCity has offices in the U.S. and
affiliate organizations in Europe and Latin America.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements based on the
expectations of current FirstCity management. Those forward-looking statements
include all statements other than those made solely with respect to historical
fact. Numerous risks, uncertainties and other factors may cause actual results
to differ materially from those expressed in any forward-looking statements.
These factors include, but are not limited to, (1) the outcome of any legal
proceedings that have been or may be instituted against FirstCity and others
following announcement of the merger agreement; (2) risks that the proposed
transaction disrupts FirstCity’s current plans and operations and the
potential difficulties in employee retention as a result of the merger; (3)
the ability to recognize the benefits of the merger; (4) the amount of the
costs, fees, expenses and charges related to the merger and the actual terms
of certain financings that will be obtained for the merger; (5) legislative
developments; (6) changes in tax and other laws; and (7) other risks in
connection with the consummation of the merger. Additional factors that may
affect the future results of FirstCity are set forth in its filings with the
SEC, including its recent filings on Forms 10-K, 10-Q, and 8-K, including, but
not limited to, those described in FirstCity’s Form 10-K for the fiscal year
ended December 31, 2012 and FirstCity’s Form 10-Q for the fiscal quarter ended
March 31, 2013. Many of the factors that will determine the outcome of the
subject matter of this press release are beyond FirstCity’s ability to control
or predict. These forward looking statements reflect FirstCity’s expectations
as of the date of this press release. FirstCity undertakes no obligation to
revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required under applicable law.

Contact:

For FirstCity Financial Corporation:
Jim Holmes, 254-761-2800
or
For Värde:
Jeff Thuringer, 952-893-1554