Crystal River Reports Second Quarter 2008 Financial Results

Market Wire, August, 2008

Second Quarter 2008 Securities Roll-Forward Table

The table below details the impact of purchases and sales, principal paydowns, premium and discount amortization, and adjustments to market value on our available for sale securities during the second quarter of 2008:

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                                     Prime  Subprime  Preferred       Total
($ in millions)               CMBS    RMBS      RMBS      Stock   Portfolio
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Carrying Value
 March 31, 2008           $  271.1  $ 56.3  $   28.0  $    0.1  $     355.5
Sales                            -       -         -         -            -
Principal paydowns             0.0    (3.1)     (0.7)        -         (3.8)
Principal loss                   -    (0.3)        -         -         (0.3)
Amortization                   3.1     1.4      (0.1)        -          4.4
Market value adjustments:
 CDO assets                  (27.6)   (8.5)     (7.5)        -        (43.6)
 Non-CDO assets               (6.8)   (8.0)     (3.4)     (0.1)       (18.3)
 OCI                           1.9       -         -         -          1.9
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Carrying Value
 June 30, 2008            $  241.7  $ 37.8  $   16.3  $      -  $     295.8
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COMMERCIAL REAL ESTATE ("CRE") INVESTMENT PORTFOLIO

At June 30, 2008, Crystal River's CRE investment portfolio totaled $234.9 million. The CRE portfolio consisted of three high-quality office buildings 100% leased on a triple-net basis to JPMorgan Chase. The buildings are financed with long-term fixed-rate mortgage loans.

              CRE investment portfolio at June 30, 2008:

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                             Year   Total
                               of    Area        Book   Mortgage   Net Book
                            Lease   (000s     Value(1)      Debt     Equity
Location            Tenant Expiry Sq. Ft.)  (Millions) (Millions) (Millions)
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Houston,
 Texas     JPMorgan Chase    2021   428.6  $     61.3  $    53.4  $     7.9
Arlington,
 Texas     JPMorgan Chase    2027   176.0        21.6       20.9        0.7
Phoenix,
 Arizona   JPMorgan Chase    2021   724.0       152.0      145.1        6.9
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Total CRE                         1,328.6  $    234.9  $   219.4  $    15.5
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(1) Book value includes intangible assets and intangible liabilities, but
    excludes rent-enhancement receivables.

REAL ESTATE LOAN INVESTMENT PORTFOLIO

At June 30, 2008, Crystal River's real estate loan portfolio, which consists of mezzanine loans, construction loans and whole loans, totaled $71.9 million and had a weighted average interest rate of 8.5%. Crystal River recorded a $7.4 million loan loss allowance on its real estate loan holdings during the quarter ended June 30, 2008. Included in this charge is a $5.7 million net mark-to-market adjustment resulting from designating two loans in its real estate loan portfolio as held for sale.