It is less than two months since the survivor of the former First City Bancorporation of Texas emerged from Chapter 11 bankruptcy protection, but already the company is putting its $650 million of tax-loss carryforwards to good use.

FirstCity Financial Corp., which emerged from the reorganization of First City Bancorp. as a buyer of distressed financial assets, announced Thursday that it was buying all of Diversified Financial Systems Inc., of Fort Wayne, Ind., and an affiliated company, Diversified Performing Assets Inc.

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