Capital Alliance Income Trust Ltd. Announces Third Quarter Dividend, Second Quarter Operating Results and Results of Annual Shareholders Meeting.

SAN FRANCISCO -- Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA) announced that its Board has declared CAIT's third quarter Common Share dividend at the rate of $0.30 per Common share. The dividend is payable on August 16, 2004 to shareholders of record on August 9, 2004.

Richard J. Wrensen, CAIT's Executive Vice-President and Chief Financial Officer, stated that CAIT would file its Form 10-QSB during the week of August 2, 2004. CAIT's Form 10-QSB for the second quarter will be available through CAIT's website which is listed below.

For the three months ended June 30, 2004, CAIT's net income was $215,139 ($0.32 basic and $0.27 diluted) and for the six months ended June 30, 2004 net income was $492,907 ($0.78 basic and $0.66 diluted per share) as compared to net income of $312,929 ($0.55 basic and $0.47 diluted per share) and $607,077 ($1.06 basic and $0.90 diluted per share), respectively for like periods in 2003. Revenues were $500,308 for the three months ended June 30, 2004 and $1,211,928 for the six months ended June 30, 2004 as compared to $731,620 and $1,432,253 for the same periods in 2003.

Thomas B. Swartz, CAIT's Chairman and CEO announced that CAIT's postponed Annual Meeting of Shareholders was held on July 27, 2004 at CAIT's offices in San Francisco; that Director Stanley C. Brooks, Chairman of Brookstreet Securities Corporation of Irvine, California and Dennis R. Konczal, President of CAIT, were reelected for three year terms as directors of CAIT; and that the Board's selection of Novogradac & Company LLP, San Francisco, as Independent Auditors for CAIT for the year 2004 was approved.

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.

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.