Capital Alliance Income Trust Ltd. Announces Expanded Financial Relationships Improving Liquidity.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--May 31, 2002

Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA) -- a residential mortgage REIT operating both mortgage investment and mortgage banking businesses, announced the successful consummation of negotiations with a new lender and an expanded relationship with one of its existing lenders to provide an aggregate $6.75 million in increased funding facilities to improve CAIT's liquidity. CAIT's mortgage banking business is conducted through Capital Alliance Funding Corporation, a subsidiary in which it has a 99% economic interest.

Dennis R. Konczal, President and Chief Operating Officer of CAIT, stated that, "We are pleased to add Gateway Bank F.S.B. of San Leandro, CA to the group of financial institutions with whom we are working. Gateway Bank F.S.B. will provide Capital Alliance Funding Corporation with a $5 million 'Quick$ale'(R) facility. We are equally pleased to be able to expand to $4 million our secured line of credit with Golden Gate Bank of San Francisco, Calif., a member of Greater Bay Bancorp (NASDAQ:GBBK)." Mr. Konczal also noted that, "This added liquidity will allow CAIT to more fully take advantage of favorable interest rate spreads while increase its niche bridge-financing business and add to CAIT's mortgage portfolio."

Richard J. Wrensen, CAIT's Executive Vice President and Chief Financial Officer, reiterated that CAIT will continue to discuss increased credit commitments with its existing lenders and will seek additional borrowing facilities and banking relationships. Mr. Wrensen explained that, "Even with its expanded borrowing, CAIT maintains a conservative balance sheet since CAIT and its subsidiary's borrowings are less than 1.5 times CAIT's equity capital. Most mortgage REITs typically borrow six to eight times capital." Mr. Wrensen stressed that CAIT's robust growth has not compromised the quality of its loan portfolio. He said, "Our growth is organic and the portfolio's average loan to appraised value remains less than 70%."

This document contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) that inherently involve risks and uncertainty. CAIT's actual results and liquidity can differ materially from those anticipated in these forward-looking statements because of changes in the level and composition of CAIT's investments and unforeseen factors. As discussed in CAIT's filings with the Securities and Exchange Commission, these factors may include, but are not limited to, changes in general economic conditions, the availability of suitable investments, fluctuations in and market expectations for fluctuations in interest rates and levels of mortgage prepayments, deterioration in credit quality and ratings, the effectiveness of risk management strategies, the impact of leverage, the liquidity of the secondary markets and credit markets, increases in cost and other general competitive factors.