Exhibit 99.1


                          [HOLDING COMPANY LETTERHEAD]

FOR IMMEDIATE RELEASE                             FOR MORE INFORMATION, CONTACT:
                                                        George A. Rosenbaum, Jr.
March 20, 2006                                  Executive Vice President and CFO
                                                                  (505) 622-6201

                    FIRST FEDERAL BANC OF THE SOUTHWEST, INC.
                             DECLARES CASH DIVIDEND

Roswell, New Mexico - First Federal Banc of the Southwest,  Inc. (the "Company")
(Nasdaq SmallCap:  FFSW) has announced that the Company will pay a cash dividend
of $0.07  per  share.  The  dividend  will be  payable  on April  13,  2006,  to
shareholders of record on March 30, 2006.

The Company  operates 15 banking offices  throughout the State of New Mexico and
in El Paso, Texas.

                           Forward-Looking Statements
                           --------------------------

Certain  statements  contained  in this press  release  that are not  historical
facts,  including,  but not limited to, statements that can be identified by the
use of  forward-looking  terminology  such  as  "may,"  "expect,"  "anticipate,"
"predict,"  "believe,"  "plan," "estimate" or "continue" or the negative thereof
or other  variations  thereon or  comparable  terminology,  are  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, and involve a number of risks and uncertainties. The actual results of the
future events described in such forward-looking statements in this press release
could differ  materially from those stated in such  forward-looking  statements.
Among the factors  that could cause  actual  results to differ  materially  are:
third party  claims or actions in relation  to ongoing or future  litigation  or
bankruptcy matters; interest rate fluctuations; level of delinquencies; defaults
and  prepayments;   general   economic   conditions;   competition;   government
regulation; unanticipated developments in connection with the bankruptcy actions
or litigation mentioned above,  including judicial variation from existing legal
precedent and the decision by one or more parties to appeal decisions  rendered;
the  risks  and  uncertainties  discussed  elsewhere  from  time  to time in the
Company's periodic reports filed with the Securities and Exchange Commission and
other public statements.

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