Exhibit 99.1

Investment Corporation

Aames Investment Corporation Reports First Quarter Financial Results

Loan Production Up 15% From Year Ago; Retail Production up 44%

Company in Discussions Regarding Possible Merger

Core EPS Loss of $0.10, GAAP EPS Loss of $0.22

Cost Reduction Program Proceeding

Los Angeles, California, May 10, 2006 – Aames Investment Corporation (NYSE: AIC), a nationwide subprime mortgage lender today reported diluted net loss per common share of $0.22 for the first quarter of 2006.  Excluding a pretax mark-to-market derivative loss under FASB 133 of $5.2 million and charges related to the Company’s cost reduction program and other non-core charges of $2.3 million, core loss per diluted share for the quarter equaled $6.0 million or $0.10 per share.

First Quarter 2006 Highlights

•              Total loan production of $1.6 billion, 15% above year-ago volume, and 17% below the fourth quarter 2005, reflecting seasonal variation;

•              Retail Channel production increased by 44% from the first quarter of 2005 and accounted for 48% of total production compared with 43% in the fourth quarter of 2005;

•              Net cost to originate of 2.20%, compared with 2.92% in the first quarter of 2005;

•              Taxable portfolio net interest margin of 2.75%;

•              Weighted average interest rate on quarter’s production of 8.39%, compared with 7.81% for the fourth quarter of 2005.

Aames also announced that it is in discussions with several parties regarding a potential merger or sale of the Company.  While there can be no assurance that any transaction will be completed or of the price of any such acquisition, the Company currently believes that there is a significant probability that it will enter into a definitive agreement with one of the parties during the second quarter.  Aames has retained Credit Suisse, Inc. as its financial advisor in connection with its consideration of a potential transaction.

Mr. A. Jay Meyerson, Chairman and CEO of Aames, said, “We were pleased with the success of our retail growth strategy in the first quarter, with the division growing by 44% over last year and now accounting for nearly half of our total production.  We were also

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