Exhibit 99(d)(5)


                   FirstCity Financial Extends Exchange Offer
                               Until July 31, 1997

      Houston, July 18, 1997 . . . FirstCity Financial Corporation announced

that it is extending the expiration of its exchange offer for its Special

Preferred stock until 5 p.m. New York time on Thursday July 31, 1997.

      Terms of the exchange offer allow a holder of outstanding Special

Preferred stock to exchange shares of such stock for an equal number of

FirstCity's redeemable New Preferred stock. As with the existing Special

Preferred, the redemption value of the New Preferred Stock will be $21. The New

Preferred stock will have an annual dividend rate of $3.15 per share, payable

quarterly, until September 30, 1998. Beginning October 1, 1998 the dividend rate

will adjust downward to $2.10 per year or 10% of the New Preferred redemption

value. The New Preferred will be callable on or after September 30, 2003 and is

to be redeemed on September 30, 2005. Consummation of the exchange remains

conditioned upon, among other things, at least 1,500,000 of Special Preferred

stock being validly tendered and not withdrawn prior to the expiration of the

exchange offer. Other terms and conditions of the exchange offer which are

outlined in the offering circular dated June 18, 1997 remain unchanged.

      The exchange is generally structured to be a tax free exchange and the New

Preferred stock is expected to qualify for dividend received exclusions under

the current IRS code, subject to applicable limitations.

      James Hawkins, Chairman of FirstCity noted, "We are very enthusiastic

about this offer to our current Special Preferred shareholders. The preferred

they now hold is to be redeemed in September of 1998, at which point the holders

will have a tax consequence from the redemption of the security. Exchanging for

the new preferred allows a holder to defer any tax recognition and provides the

holder with a new preferred at very competitive dividend rates. We believe this

is a very attractive offer for our preferred holders. With the timing of this

offer falling during summer vacations as well as the relatively short duration

of the initial exchange period, we determined that an extension is necessary to

assure that all holders have ample time to consider the exchange."




      As of 4 p.m. New York City time on Friday, July 18, 1997, 935,000 shares

have been tendered pursuant to the offer.

      Holders who would like additional information regarding the exchange offer

should contact Suzy Taylor-Vice President of Investor Relations for FirstCity at

713-652-1810.

      FirstCity Financial Corporation is a diversified financial services

company engaged in portfolio acquisition, consumer lending, mortgage banking and

asset servicing through approximately 50 offices in the US and with affiliate

organizations in Europe and Mexico. Its common (FCFC) and special preferred

(FCFCP) stock are listed on the NASDAQ National Market System.