Capital Alliance Income Trust Releases Preliminary Second Quarter 2006 Financial Results.

SAN FRANCISCO -- Capital Alliance Income Trust Ltd. ("CAIT") (AMEX:CAA) a residential mortgage REIT, announced preliminary second quarter financial results. For the three months ended June 30, 2006, CAIT reported net income of $3,460 ($0.01 basic and diluted per share) and for the six months ended June 30, 2006, a net loss of $374,032 ($(0.98) basic and diluted per share), as compared to a net loss of $39,837 ($(0.25) basic and diluted) and a net loss of $22,482 ($(0.42) basic and diluted), respectively, for the like periods in 2005. Revenues were reported as $656,554 for the three months ending June 30, 2006, and $1,516,961 for the six month period ending June 30, 2006, as compared to $1,048,119 and $1,894,958 for like periods in 2005.

CAIT's reduced revenues and expenses in 2006's first half were due to the discontinuance of CAIT's taxable subsidiary, Capital Alliance Funding Corporation ("CAFC"), mortgage banking activities. On March 31, 2005 CAIT announced the discontinuance of its mortgage banking activities

The second quarter financial results also returned CAIT to profitability after four consecutive quarters of net losses. The second quarter's results were achieved despite higher than usual auditing expenses in connection with reporting the discontinuance of CAFC's mortgage banking activities and higher than usual professional service expenses in connection with the preparation and filing of the 2006 proxy statement.

CAIT also announced the sale of real estate, acquired in foreclosure, that will provide a one time gain of between $105,000 and $115,000 in the third quarter. The transaction, to be disclosed as a subsequent event in CAIT's second quarter 10-QSB filing, will be reported in CAIT's third quarter financial statements.

CAIT requested an extension to file the second quarter's Form 10-QSB, due to the additional time required to schedule the review and discussion of CAIT's operating results. Management currently expects the Form 10-QSB to be filed on or before August 25, 2006.

CAIT is a specialty residential lender, which invests in conforming and high yielding, non-conforming residential mortgage loans on one-to-four unit residential properties located primarily in California. Only residential loans with a combined loan-to-value of 75% or less are originated for CAIT's mortgage investment portfolio. Due to the disposal of CAFC, unsold mortgages with a loan-to-value greater than 75% may be transferred to CAIT.

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, operations and liquidity may differ materially from those anticipated in these forward-looking statements because of changes in the level and composition of CAIT's investments and unseen 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 of fluctuations in interest rates and levels of mortgage payments, 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.