Capital Alliance Income Trust Ltd. Announces Sixth Straight Quarter of Improved Earnings as Compared to Prior Year Quarters.

Business Editors/Real Estate Writers

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 7, 2002

Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA) a residential mortgage REIT, operating both mortgage investment and mortgage banking businesses, announced an increase in its earnings to $309,585 ($.53 basic and $ .43 diluted per share) for the three months ending June 30, 2002 and $616,565 ($ 1.06 basic and $ .89 diluted) for the six months ended June 30, 2002, as compared to earnings of $251,976 ($ .26 basic and $ .23 diluted per share) and $516,469 ($ .52 basic and $. 48 diluted per share), respectively, for the like periods in 2001. Revenues also increased to $758,274 for the three months ending June 30, 2002 and $1,499,752 for the six month period ending June 30, 2002, as compared to $659,844 and $1,279,995 for the same periods in 2001. The increase in quarterly earnings over the prior year's respective quarter was the sixth straight such increase in a row for CAIT. Based upon the closing stock price of August 6, 2002, CAIT's annualized common share dividend yield is 9.63%.

CAIT's Form 10-Q and its financial statements included therein, to be filed by August 14, 2002, will be duly certified pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350) by Thomas B. Swartz, chief executive officer and Richard J. Wrensen, chief financial officer of CAIT.

Richard J. Wrensen, CAIT's executive vice-president and chief financial officer noted that the continuing improvement in CAIT's earnings is poised to continue through the remainder of 2002 notwithstanding the uncertainty afflicting the general economy, interest rates, and residential real estate values.

CAIT is a specialty residential lender which originates and invests as a portfolio lender in 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 conforming and non-conforming loans on residential properties for sale to investors in the secondary market on a whole loan basis for cash through its mortgage banking subsidiary, Capital Alliance Funding Corporation. CAIT's investment guidelines limit its portfolio mortgages to 75% or less of the collateral's appraised value. As a REIT, CAIT is required to distribute 90% of its annual taxable income.

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 general competitive factors.