Capital Alliance Income Trust Ltd. Omits Preferred Dividend.

SAN FRANCISCO -- Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA), a residential mortgage REIT, announced the decision of the Board of Directors to omit June and July Preferred share monthly dividends. The Preferred share dividend was omitted to avoid a return of capital. In late July or early August CAIT's Board of Directors will meet to consider an August Preferred share dividend.

CAIT also reiterated that the current interest rate environment, increased competition and regulatory requirements are negatively impacting the REIT's operating performance. Since last summer, average margins have declined, due to a flatter yield curve and increased competition. Also, the regulatory costs in time, energy and dollars of the post Sarbanes-Oxley environment have been disproportionately costly for a small company.

CAIT, a specialty residential lender, 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. Only residential loans with a combined loan-to-value of 75% or less are retained in CAIT's portfolio of mortgage investments.

This document may contain "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.