FirstCity Crestone Invests $13,500,000 in Coal Transaction

April 30, 2008- FirstCity Crestone ("Crestone") recently completed a $13,500,000 debt and equity investment to support the acquisition and restart of an idled coal mine. The property consists of two underground mines and a surface mine. Simultaneous with the acquisition, the venture entered into an intermediate term sales contract for a portion of its production with a total sales value of nearly $120,000,000.

Crestone is currently soliciting proposals from equipment lenders to refinance a portion of its investment. The equipment loan would be secured by the mine’s assets which include yellow iron, a highwall miner, and underground mining equipment.

This transaction marks Crestone’s fifth investment since its formation one year ago. Crestone’s portfolio includes investments in diverse industries (transportation, mining, retail, manufacturing and real estate) and investment types ranging from second lien loans to control buyouts.

Crestone is well capitalized and is actively seeking new special situation investments and distressed loan acquisitions from $1 to $20 million dollars. Please give us a call to discuss a transaction or to find out more about our recent investment. (720) 470-4401.

FirstCity Crestone Invests in Distressed Transaction

January 23, 2008- FirstCity Crestone ("Crestone") recently completed a debt and equity investment to support the merger of two specialty chemical companies undergoing financial and operational turnarounds. One of the companies recently emerged from bankruptcy and the other one has experienced operating losses for the past several years. Crestone’s investment will provide the capital necessary to consolidate the two operations into one facility. The combined entity is expected to have revenue of almost $50 million. The consolidation will create significant cost savings and economies of scale.

This transaction marks Crestone’s fourth investment since its formation just seven months ago. Crestone’s portfolio includes investments in a diverse set of industries (transportation, retail, industrial and real estate) and investment types ranging from 2 nd lien loans to control buyouts.

FirstCity Crestone Provides Turnaround Financing

FirstCity Crestone ("Crestone") announced the funding of a debt and equity investment to support the turnaround of a retailer located in the Western United States. The retailer experienced several years of operating losses and did not have the availability under its Senior Credit Facility to properly stock its stores for the holiday selling season. Crestone worked with the borrower and the senior lender to finance the ongoing turnaround and protect the lender’s secured position.

"As the economy and credit market softens, we expect to encounter more situations of stressed companies who need additional capital beyond what senior lenders are willing to provide" according to Rich Horrigan, managing director of Crestone. "We can respond quickly and creatively to such situations providing a solution to both the borrower and the senior lender.”

FirstCity Crestone Acquires Short-line Railroad

FirstCity Crestone ("Crestone") announced a $6,000,000 acquisition of a short-line railroad located in the northeastern United States. Crestone provided one hundred percent of the capital in the acquisition in partnership with an established management team. Crestone closed the transaction in a very short time frame after another institutional investor was unable to fund the acquisition.

"The railroad is fantastic asset and will serve as a platform for additional growth," said Rich Horrigan, Managing Director of Crestone. "Our operating partners have a great pedigree in the industry. We are very excited to work with them to find add-on acquisitions. We will also be looking to place a senior debt facility in the next couple of months."

FirstCity Crestone Closes First Deal

FirstCity Crestone ("Crestone") announced the closing of its first transaction, a $3,000,000 investment supporting the acquisition of a large multi-family property in the northwestern United States. Crestone provided a second lien loan with a high loan to value. This allowed Crestone’s developer partner to close quickly and retain a majority equity stake in the project.

"The property is a hidden gem in an attractive market; however, historically, it has been managed poorly," according to Rich Horrigan, managing director of Crestone. "Our partner has developed an ambitious plan to improve and reposition the project. We look forward to finding similar situations nationwide to invest in underperforming assets and operating businesses."

About FirstCity Crestone:
FirstCity Crestone is a special situations investment company with a broad mandate to invest in a variety of lower middle-market assets. The company buys distressed debt, invests in troubled companies, originates junior and senior high yield loans, and executes control and non-control buyouts. FirstCity Crestone targets transactions between $1 and $10 million on a standalone basis and seeks to partner with other Investors on larger transactions.

FirstCity Crestone Launched to Target Lower Middle Market

May 1, 2007 -- FirstCity Financial Corporation and Crestone Capital announced today the formation of a new joint venture, FirstCity Crestone, LLC. FirstCity Crestone is a special situations investment company with a broad mandate to invest in a variety of assets. Initially, the company will buy or finance distressed debt and companies, originate junior and senior bridge loans, and execute lower middle market buyouts. The company will be based in Greenwood Village and managed by the existing principals of Crestone Capital -- Richard Horrigan, Stephen Schmeltekopf, and Jim Miller, who will devote full time duties to the FirstCity Crestone platform. The company will target transactions of $1-$10 million on a stand alone basis, and seek to partner with other investors on larger transactions.

"The formation of FirstCity Crestone marks an exciting and natural expansion of FirstCity's core business of buying loan portfolios," said FirstCity Financial's CEO, Jim Sartain. "Over the past twenty years FirstCity has emerged as the buyer of choice for financial institutions seeking to sell their under-performing assets. Our partnership with Crestone Capital will expand our client base to include undercapitalized companies seeking capital to fund turnarounds, performing companies seeking bridge financing to support growth, and real estate developers and operators seeking capital to develop or reposition property. Rich Horrigan and his staff are seasoned asset originators and we are fortunate to partner with them to diversify and enhance the existing asset sourcing capabilities of FirstCity."

Rich Horrigan, Managing Director of Crestone Capital, added, "Crestone Capital is delighted to partner with FirstCity in this new venture. We think there's an underserved need in the lower middle market and by leveraging the resources of FirstCity, we think we can be become the capital provider of choice for turnaround advisors, equity funds, and entrepreneurs."