UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 18, 2005
Commission File Number: 333-11625
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CAPITAL ALLIANCE INCOME TRUST LTD.,
A REAL ESTATE INVESTMENT TRUST
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(Exact name of registrant as specified in its charter)
Delaware 94-3240473
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(State or other Jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
100 Pine Street
Suite 2450
San Francisco, California 94111
(Address of principal executive office) (zip code)
(415) 288-9575
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CRF
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(d) under the Exchange
Act (17 CRF 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CRF 240.13e-4(c))
Item 8.01 Other Event
On November 18, 2005, Capital Alliance Income Trust, Ltd. announced its third
quarter earnings. A copy of the press release is attached as Exhibit 99.1.
Exhibit 99.1 Press release dated November 18, 2005.
Press Release
CAPITAL ALLIANCE INCOME TRUST LTD.
ANNOUNCES EARNINGS FOR THIRD QUARTER
SAN FRANCISCO - (BUSINESS WIRE) - November 18, 2005 - Capital Alliance Income
Trust Ltd. ("CAIT") (AMEX: CAA-News) a residential mortgage REIT, operating both
mortgage investment and mortgage banking businesses, announced a net loss of
$85,721 ($(0.21) basic and diluted per share) for the three months ended
September 30, 2005 and a net loss of $108,203 ($(0.63) basic and diluted per
share, after Preferred Dividends) for the nine months ended September 30, 2005,
as compared to net income of $80,750 ($0.05 basic and $0.04 diluted per share,
after Preferred Dividends) and $573,657 ($0.78 basic and $0.67 diluted per
share, after Preferred Dividends), respectively, for the like periods in 2004.
Revenues were $587,689 for the three months ended September 30, 2005 and
$1,706,394 for the nine months ended September 30, 2005, as compared to $515,608
and $1,727,536 for the like periods in 2004.
CAIT's Board of Directors announced the following regarding dividends and
dividend policy: o The Preferred Share Dividend for September, October, November
and December 2005 will be omitted; o The Common Share Dividend for the 4th
quarter of 2005 will be omitted; o Going forward, the declaration of the
Preferred Share Dividend will coincide with the quarterly review of the Common
Share
Dividend using the prior quarters' operating results in the Board's
deliberations.
The omission of dividends during the last two quarters was done primarily to
prevent a return of capital.
CAIT's reduced earnings can be attributed to a combination of factors.
Even though aggregate revenues increased to $587,689 for the quarter ended
September 30, 2005 compared to $515,608 for the quarter ended September 30,
2004, due to a larger loan portfolio, the weighted average yield from the total
loan portfolio declined to 10.96% versus 12.04% one year earlier. This reduction
in weighted average yield from the loan portfolio, coupled with an approximate
2.00% increase in the weighted average cost of borrowing by CAIT has resulted in
the compression of margins during the last 12 months, thereby significantly
reducing September, 2005 quarterly net income compared to one year earlier. In
addition, a shorter weighted average maturity in the loan portfolio has
accelerated the expensing of certain capitalized loan origination costs.
Going forward, management believes that, since long term mortgage rates
have now begun to rise, CAIT's weighted average yield on its loan portfolio
should stabilize. Management is also restructuring CAIT's financing arrangements
that will result in a reduction in the weighted average cost of borrowings,
thereby helping to restore margins. These changes should start to take effect in
the fourth quarter, 2005 with their full impact being realized in the first and
second quarters of 2006. Finally, management is reviewing alternatives to reduce
overall CAIT overhead expenses and to restructure CAIT operations. Alternatives
being reviewed should have the effect of sharpening CAIT's focus on its core
portfolio lending business.
CAIT is a specialty residential lender, which originates and invests in
conforming and high-yielding, 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.
Contact: Capital Alliance Income Trust Ltd., San Francisco
Richard J. Wrensen, EVP & CFO - 415/288-9575
rwrensen@calliance.com
www.calliance.com
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
CAPITAL ALLIANCE INCOME TRUST, LTD.,
A Real Estate Investment Trust
Dated: November 18, 2005 By: /s/ Richard Wrensen
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Richard J. Wrensen,
Chief Financial Officer