BOULDER, CO - (MARKET WIRE) - CapSource Financial, Inc. (OTC BB: CPSO.OB - News) announced that for the third quarter ended September 30, 2006, its consolidated net sales increased 80.4% to $10,969,188 compared to $6,080,492 in the same period last year. Net sales is made up of two components: trailer sales/service revenues, which grew in the third quarter of 2006 by $4,883,260, or 82.3% compared with the same period of 2005; and lease/rental income, which improved by $5,436, an increase of 4.0% over the same period last year. Trailer sales increased $3,085,597 during the third quarter of 2006 in its Mexican operations, in addition to trailer sales of $1,797,663 reported by the U.S. business which was acquired on May 1, 2006.

For the nine months ended September 30, 2006, consolidated net sales grew by 35.5%, or $5,442,435 to $20,759,467, compared to $15,317,032 in the same period of 2005. This increase resulted from a 32.2% increase in sales volume in 2006, or $4,924,518, of which $2,370,617 was due to volume growth in the Mexican operations, as well as sales of $2,553,901 contributed by our newly acquired U.S. trailer sales operation.

Gross profit consists of total revenue less cost of sales and operating leases. For the third quarter ended September 30, 2006, gross profit increased $249,107, or 60.8%, to $658,696 compared to $409,589 for the same period last year. This increase in gross profit was due, in part, to the increase in total sales, partially offset by a reduction in the average gross profit per unit sold. The average gross profit per unit sold declined as a result of pricing pressures by certain high volume, lower margin fleet customers.

For the nine months ended September 30, 2006, gross profit increased $496,228, or 48.9%, to $1,510,839 compared to $1,014,611 for the same period last year. This improvement resulted from the increase in trailer sales, combined with improvement in the average gross profit per unit sold during the first and second quarters of 2006, partially offset by the a decline in average gross profit per unit sold in the third quarter of 2006.

Fred Boethling, President and CEO, said, "Our improved operating results for the 3rd quarter of 2006, are a result of the our recent acquisition, continued strong demand for trailers and our ability to meet the needs of our clients in a timely, cost effective manner." Mr. Boethling noted that the Company and its Mexican operating subsidiary, RESALTA, obtained a floor plan inventory line of credit of $3,600,000, to finance the purchase and sale of new and used truck trailers in Mexico. Mr. Boethling added, "Now that we have a credit facility in place in Mexico, we are positioned to better serve our customers in terms of buying and selling used equipment, which is an essential part of our plan to offer the best services available to our customers."

Operating loss consists of net sales less cost of sales and operating leases and selling, general and administrative expenses. In the third quarter of 2006, CapSource recognized an operating loss of $101,771, compared to $130,031 for the same period last year.

For the nine months ended September 30, 2006, CapSource recognized an operating loss of $1,291,770, including the one-time, non-cash charge of $784,679 related to the conversion of shareholder debt to equity. Excluding the one-time charge, the operating loss was $507,091compared to $614,824 for the same period last year. This operating loss improvement of $107,733 resulted from the growth in gross profit, partially offset by the increase in selling, general and administrative expense.

The company reported a net loss for the third quarter ended September 30, 2006 of $191,781, or $0.01 per diluted share, compared with a net loss of $268,198, or $0.02 per diluted share for the same period last year. The improvement in net loss resulted primarily from the increase in net sales and gross profit, partially offset by the increase in selling, general and administrative expense.

The company's net loss for the nine months ended September 30, 2006 was $1,613,004, or $0.10 per diluted share, compared to a net loss of $1,318,660, or $0.12 per diluted share for the same period of 2005. The increase of $294,344 in net loss resulted from the increase in selling, general and administrative expense, including the one-time charge of $784,679 as described above, partially offset by the growth in net sales and gross profit.

About CapSource Financial, Inc.

CapSource Financial, Inc. was incorporated in 1996 to take advantage of the North American Free Trade Agreement (NAFTA) and the increased economic activity that NAFTA triggered when the world's largest free trade area was created by linking 406 million people in Mexico, the U.S. and Canada producing more than $11 trillion worth of goods and services. Mexico is now the United States' second largest trading partner with an average of $650 million in goods crossing the border each day. U.S. trade with Mexico has increased nearly 500 percent - from $48 billion to $239 billion since the passage of NAFTA. The vast majority of this trade moves by truck.

CapSource owns and manages a lease/rental fleet of over-the-road truck trailers and related equipment through its REMEX subsidiary and sells trailers, parts and service through it RESALTA subsidiary, both based in Mexico City. CapSource, through its subsidiary Capsource Equipment Company, Inc., also owns and operates Prime Time Trailers of Fontana, California, the authorized Hyundai Translead trailer dealer for California. CapSource's common stock trades on the electronic bulletin board under the symbol CPSO.

Certain matters discussed within this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although CapSource Financial, Inc. believes the expectation reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectation will be attained. Factors that could cause actual results to differ materially from our expectations include financial performance, changes in national economic conditions, economic conditions in Mexico, availability of financing, governmental approvals and other risks detailed from time to time in the company's SEC reports.

For additional information contact: CapSource: Fred Boethling at (888) 574-6744
Visit the company's website: www.capsource-financial.com