Capital Alliance Income Trust Announces Declaration of Common Share Dividend for First Quarter and Revised Investment Policy to Allow Increased Use of Leverage.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--March 24, 2000

Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA), a non-conforming specialty residential finance company announced that its Board had declared CAIT's common share dividend for the first quarter at $.085 per share.

The dividend will be payable on April 17, 2000 to shareholders of record on April 1, 2000.

Thomas B. Swartz, CAIT's chairman and CEO, also disclosed that CAIT's Board had authorized an increased leveraging of CAIT's capital position for up to four times its capital base to increase the size of its loan portfolio and to provide additional warehouse facilities for its mortgage banking subsidiary, Capital Alliance Funding ("CAFC").

Prior to this, CAIT has followed a low-leverage policy in its mortgage investment (portfolio) business and has used its warehouse lines only in CAFC, its mortgage banking subsidiary. Swartz stated that, "Notwithstanding our prior policy, we believe that with the positive interest spreads available to us, the use of leverage can be favorable in our portfolio operations if intelligently used, even with recent rate increases."

He also noted that, "While CAIT will utilize the additional liquidity to expand its mortgage portfolio, it will, as it has done since its inception, continue to hedge its risks by limiting loans to relatively short terms, with a healthy interest rate and a maximum 75% loan-to-value ratio."

He indicated that based on pending negotiations with a major banking institution in the mortgage field, the new term and warehouse financings should be in place "early in the second quarter." He also indicated that the immediate effect of the expanded liquidity on earnings "would be muted and deferred by accounting requirements to amortize origination income but should be positive in the long run."

Certain oral and written statements of the management of CAIT included in this press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. The accuracy of such statements cannot be guaranteed, as they are subject to a variety of risks.