Crystal River Reports Third Quarter 2008 Financial Results; Declares Fourth Quarter 2008 Dividend of $0.10 Per Share

Market Wire, November, 2008

Crystal River Capital, Inc. (NYSE: CRZ) -

Crystal River's management will host a dial-in teleconference to review its third quarter 2008 financial results on November 3, 2008 at 4:30 p.m. (EST). The teleconference can be accessed by dialing 888-208-1427 or 913-312-0838 (International). A replay of the recorded teleconference will be available through November 17, 2008. The replay can be accessed by dialing 888-203-1112 or 719-457-0820 (International) and entering passcode 5394173. A live audio webcast of the call will be accessible on the Company's website, www.crystalriverreit.com , via a link from the Investor Relations section. A replay of the audio webcast will be archived in the Investor Relations section of the Company's website.

Crystal River Capital, Inc. ("Crystal River" or the "Company") (NYSE: CRZ) today announced its results for the quarter ended September 30, 2008.

Separately, the Company announced that its Board of Directors has declared a fourth quarter dividend of $0.10 per share.

For additional information, please refer to Crystal River's letter to stockholders, which has been posted to the Investor Relations section of the Company's website at www.crystalriverreit.com .

I. THIRD QUARTER UPDATE

- Liquidity and leverage update: Crystal River continued its focus on reducing leverage by paying down its repurchase agreement debt to $8.3 million at September 30, 2008 from $22.1 million at June 30, 2008. The amount drawn under the Company's revolving credit facility was $41.4 million at September 30, 2008.

- Operating results: The net loss for the quarter ended September 30, 2008 totaled $56.7 million, or $2.28 per share. Operating Earnings (defined below) for the quarter ended September 30, 2008 totaled $13.9 million, or $0.56 per share, compared to $20.9 million, or $0.83 per share, for the third quarter of 2007 and $16.6 million, or $0.67 per share, for the second quarter of 2008. The decrease over the second quarter of 2008 was primarily attributable to lower interest income resulting from the sale of Crystal River's Agency MBS portfolio and the sale and repayment of a portion of the Company's real estate loan portfolio, partially offset by lower interest expense.

- Dividend: Cash flow from operations for the third quarter represented approximately three times coverage of the quarterly dividend of approximately $2.5 million, with the remainder being used to pay down liabilities.

- Book value: Crystal River's GAAP book value per share decreased to $0.07 at September 30, 2008 from $2.46 at June 30, 2008.

- Portfolio activity and subsequent events: As previously announced, Crystal River sold $27.1 million of whole loans that the Company had previously designated for sale. Furthermore, Crystal River's $9.6 million investment in a construction loan matured during the third quarter of 2008. The investment, which paid off at par, had a floating-rate coupon of LIBOR plus 3.1%. The proceeds from the sales and the loan repayment were used to repay debt.

Discussion of Results

Net Investment Income (defined below) for the quarter ended September 30, 2008 totaled $18.3 million, or $0.73 per share, compared to Net Investment Income of $23.5 million, or $0.94 per share, for the third quarter of 2007 and Net Investment Income of $21.6 million, or $0.87 per share, for the second quarter of 2008. The decrease over the second quarter of 2008 was primarily attributable to lower interest income resulting from the sale of Crystal River's Agency MBS portfolio and the sale and repayment of a portion of the Company's real estate loan portfolio, partially offset by lower interest expense.

The net loss for the quarter ended September 30, 2008 totaled $56.7 million, or $2.28 per share, compared to a net loss of $93.9 million, or $3.76 per share, for the third quarter of 2007 and a net loss of $75.5 million, or $3.04 per share, for the second quarter of 2008. The primary contributors to the third quarter 2008 net loss were impairment charges and mark-to-market adjustments totaling $59.2 million. Finally, the Company also recorded a $4.4 million loan loss allowance on its real estate loan holdings during the quarter ended September 30, 2008.

The following table details the Company's impairment charges and mark-to-market adjustments on its available for sale securities by type and by sector and its CDO liabilities for the quarter ended September 30, 2008:

Impairment charges and mark-to-market adjustments of assets and liabilities:

CDO Assets and Liabilities:

----------------------------------------------------------------------------
                                            Subprime
($ in millions)      CMBS(4)  Prime RMBS(5)     RMBS  Liabilities     Total
----------------------------------------------------------------------------

Cash flows(1)      $  (57.4)  $       (2.8) $   (3.6) $         -  $  (63.8)
Yield-spread
 widening(2)           (4.4)          (5.3)     (0.4)           -     (10.1)
MTM(3) assets          (4.0)             -       0.1            -      (3.9)
MTM liabilities           -              -         -         45.5      45.5
----------------------------------------------------------------------------
Total               $ (65.8)  $       (8.1) $   (3.9) $      45.5  $  (32.3)
----------------------------------------------------------------------------

(1) Accounting rule EITF 99-20 refers to changes in cash flow assumptions
    on underlying assets.
(2) Accounting rule EITF 99-20 refers to excessive yield-spread widening
    on underlying assets.
(3) Mark-to-market adjustments under SFAS 159 ("MTM").
(4) Commercial mortgage-backed securities ("CMBS").
(5) Residential mortgage-backed securities ("RMBS").

Non-CDO Assets:

------------------------------------------------------------------
                                            Subprime
($ in millions)        CMBS     Prime RMBS      RMBS        Total
------------------------------------------------------------------
Cash flows         $   (4.9)  $       (4.4) $   (0.3)  $     (9.6)
Yield-spread
 widening             (13.0)          (3.3)     (1.0)       (17.3)
------------------------------------------------------------------
Total              $  (17.9)  $       (7.7) $   (1.3)  $    (26.9)
------------------------------------------------------------------