Capital Alliance Income Trust Ltd. Announces Record Quarterly Earnings.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 12, 2003

Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA), a residential mortgage REIT, operating both mortgage investment and mortgage banking businesses, announced record net income of $312,929 ($0.55 basic and $0.47 diluted per share) for the three months ending June 30, 2003 and $607,077 ($1.06 basic and $0.90 diluted) for the six months ended June 30, 2003, as compared to net income of $309,587 ($0.53 basic and $0.43 diluted per share) and $616,564 ($1.06 basic and $0.89 diluted per share), respectively, for the like periods in 2002. Revenues were reported as $731,620 for the three months ending June 30, 2003 and $1,432,253 for the six month period ending June 30, 2003, as compared to $758,274 and $1,499,751 for the same periods in 2002.

As a REIT, CAIT is required to distribute 90% of its taxable income. CAIT's Board of Directors recently declared a cash dividend of $0.45 per share, payable August 15, 2003. Based upon the closing stock price of August 11, 2003, CAIT's $1.80 annualized common share dividend yield is 9.86%.

Thomas Swartz, CAIT's Chairman and Chief Executive Officer, noted, "The quality of CAIT's earnings is poised to continue for the remainder of 2003 and our management team remains focused on creating shareholder value, notwithstanding the uncertainty afflicting the general economy, residential real estate values, and recent interest rate volatility. During 2003 CAIT's senior executive management have exercised stock options to acquire 30,826 common shares."

CAIT's Form 10-QSB and its financial statements included therein, scheduled to be filed August 14, 2003, will be duly certified pursuant to the Sarbanes-Oxley Act of 2002.

CAIT is a specialty residential lender which originates and invests in conforming and high-yielding, non-conforming residential mortgage loans on one-to-four-unit-residential properties located primarily in California and other western states. It also originates loans for sale to investors, on a whole-loan basis for cash through its mortgage banking subsidiary, Capital Alliance Funding Corporation. All loans with a combined loan-to-value ratio of greater than 75% of the collateral's appraised value at the time of funding are pre-sold into the secondary market. Only residential loans with a combined loan-to-value of 75% or less are retained in CAIT's portfolio of mortgage investments. On June 30, 2003 the combined loan to value of CAIT's portfolio was 68%.

This document contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) that inherently involve risks and uncertainties. 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 secondary markets and credit markets, increases in costs and other general competitive factors.