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# U.S. Securities and Exchange Commission

# Washington, D.C. 20549

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# FORM 10-QSB

# [X] QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934

For the quarterly period ended June 30, 2001

OR

# [  ] TRANSITION REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE

# ACT OF 1934

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Commission File No. 0-8117

# CHURCH LOANS & INVESTMENTS TRUST

State of Organization - Texas

Internal Revenue Service  Employer
Identification No. 75-6030254

5305 I-40 West

Amarillo, Texas 79106

Registrants telephone number:
806-358-3666

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Check  whether the issuer (1) has filed all reports required to
be filed by  Section 13 or 15(d) of the  Exchange  Act during the past 12 months
(or for such  shorter  period  that the  registrant  was  required  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.  Yes  X  No ___

As of June 30, 2001,  7,000,806 shares of the  Registrants
shares of beneficial interest were outstanding.

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# CHURCH LOANS & INVESTMENTS TRUST
INDEX

|Part I.    |                                                                                             | Page
|---------- | ------------------------------------------------------------------------------------------- | ----
|Item 1:    | Financial Information:                                                                      |     
|           | Condensed Balance Sheets at June 30, 2001 and March 31, 2001                                | 1   
|           | Condensed Statements of Income for the three-month periods ended June 30, 2001 and 2000     | 2   
|           | Condensed Statements of Cash Flows for the three-month periods ended June 30, 2001 and 2000 | 3   
|           | Notes to Condensed Financial Statements                                                     | 4   
|Item 2:    | Management's Discussion and Analysis or Plan of Operation                                   | 6   
|Part II.   | Other Information                                                                           | 8   
|Signatures |                                                                                             | 9   

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Balance Sheets (Unaudited)
June 30, 2001 and March 31, 2001

`ASSETS
                                                                                  June 30, 2001     March 31, 2001
                                                                                  --------------    ---------------
CASH AND CASH EQUIVALENTS                                                        $        54,204   $        113,142

RECEIVABLES
    Mortgage loans and church bonds - performing                                      26,582,813         25,537,346
    Interim construction loans - performing                                           10,100,493         11,537,684
    Nonperforming mortgage loans, church bonds and
      interim construction loans                                                       4,276,828          5,655,875
    Less: Allowance for possible credit losses                                        (1,613,172)        (1,568,172)
                                                                                  --------------    ---------------
                                                                                      39,346,962         41,162,733
    Accrued interest receivable                                                          448,737            433,076
    Notes receivable                                                                     816,455            752,647
                                                                                  --------------    ---------------
                  Total receivables                                                   40,612,154         42,348,456
                                                                                  --------------    ---------------
PROPERTY AND EQUIPMENT, net                                                              146,684            150,603

OTHER ASSETS                                                                              13,339              7,417
                                                                                  --------------    ---------------
TOTAL ASSETS                                                                      $   40,826,381    $    42,619,618
                                                                                  ==============    ===============

                                                    LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
    Notes payable and line of credit:
      Related party                                                              $     3,036,296   $      2,813,584
      Other                                                                           15,594,109         17,862,217
                                                                                  --------------    ---------------
                                                                                      18,630,405         20,675,801
    Accrued interest payable                                                              92,754            146,798
    Other                                                                                715,880            731,972
                                                                                  --------------    ---------------
                  Total liabilities                                                   19,439,039         21,554,571
                                                                                  --------------    ---------------
SHAREHOLDERS' EQUITY
    Shares of beneficial interest, no par value; authorized
      shares unlimited, 7,007,402 shares issued                                       20,623,866         20,623,866
    Undistributed net income                                                             779,966            457,671
    Treasury shares, at cost (6,596 shares)                                              (16,490)           (16,490)
                                                                                  --------------    ---------------
                  Total shareholders' equity                                          21,387,342         21,065,047
                                                                                  --------------    ---------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                       $    40,826,381   $     42,619,618
                                                                                  ==============    ===============`

These condensed financial statements should be read
only in  connection  with  the  accompanying  notes to  condensed  financial
statements.
-1-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)

Condensed Statements of Income (Unaudited)
Three-month periods ended June 30, 2001 and 2000

`Three-month periods ended June 30,
                                                                                        2001               2000
                                                                                        ----               ----
INTEREST INCOME AND FEES
     Interest and fees on mortgage loans, church bonds
       and interim construction loans                                                 $ 1,550,000       $ 1,029,399
     Interest on temporary investments                                                     19,203            15,926
                                                                                      -----------       -----------
                  Total interest income and fees                                        1,569,203         1,045,325
                                                                                      -----------       -----------
DEBT EXPENSE
     Interest                                                                             314,590           327,590
     Amortization of commissions paid to brokers                                                -             1,183
                                                                                      -----------       -----------
                  Total debt expense                                                      314,590           328,773
                                                                                      -----------       -----------
                  Net interest income                                                   1,254,613           716,552
PROVISION FOR POSSIBLE CREDIT LOSSES                                                       45,000            45,000
                                                                                      -----------       -----------
                  Net interest income less provision for
                    possible credit losses                                              1,209,613           671,552
                                                                                      -----------       -----------
OTHER INCOME                                                                                8,071            103,280
OTHER OPERATING EXPENSES
     General and administrative                                                           181,136           154,460
     Board of Trust Managers' fees                                                         13,692            14,487
                                                                                      -----------       -----------
                  Total other operating expenses                                          194,828           168,947
                                                                                      -----------       -----------
                  Income before provision for income taxes                              1,022,856           605,885
PROVISION FOR INCOME TAXES                                                                    481                -
                                                                                      -----------       -----------
NET INCOME                                                                            $ 1,022,375       $   605,885
                                                                                      ===========       ===========
WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING                                                              7,000,806         7,000,806
                                                                                      ===========       ===========
NET INCOME PER SHARE                                                                      $.15            $.09
                                                                                          ====            ====
DIVIDENDS PER SHARE                                                                       $.10            $.14
                                                                                          ====            ====`

These condensed financial statements should be read
only in  connection  with  the  accompanying  notes to  condensed  financial
statements.
-2-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)
Condensed Statements of Cash Flows (Unaudited)
Three-month periods ended June 30, 2001 and 2000

`Three-month periods ended June 30,
                                                                                          2001             2000
                                                                                          ----             ----
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                                       $ 1,022,375       $   605,885
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation                                                                       3,919             3,918
         Amortization of debt expense                                                          -              1,183
         Amortization of loan discounts                                                  (238,238)           (8,707)
         Provision for possible credit losses                                              45,000            45,000
         Gain on sale of other real estate                                                     -           (101,144)
         Changes in:
           Accrued interest receivable                                                    (15,661)          (23,256)
           Accrued interest payable                                                       (54,044)          (37,369)
           Other liabilities                                                              (16,092)           85,533
           Other, net                                                                      (5,922)          (23,820)
                                                                                      -----------       -----------
                  Net cash provided by operating activities                               741,337           547,223
                                                                                      -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in mortgage and interim construction
       loans and church bonds                                                          (3,666,286)       (7,911,170)
     Payments received on mortgage and interim
       construction loans and church bonds                                              5,675,295         6,183,686
     Investments in notes receivable                                                     (205,200)         (410,242)
     Payments received on notes receivable                                                141,392           109,664
     Proceeds from sale of other real estate                                                   -            415,137
                                                                                      -----------       -----------
                  Net cash provided (used) by investing activities                      1,945,201        (1,612,925)
                                                                                      -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES
     Bank overdraft                                                                            -            772,003
     Borrowings on notes payable                                                        3,983,761         9,620,318
     Principal payments on:
       Secured savings certificates                                                            -           (700,000)
       Notes payable                                                                   (6,029,157)       (8,033,593)
     Cash dividends                                                                      (700,080)         (980,113)
                                                                                      -----------       -----------
                  Net cash provided (used) by financing activities                     (2,745,476)          678,615
                                                                                      -----------       -----------
                  Decrease in cash and cash equivalents                                   (58,938)         (387,087)
CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                                                                  113,142           387,087
                                                                                      -----------       -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $    54,204       $        -
                                                                                      ===========       ===========
Supplemental disclosure of cash flow information
     Cash paid during the period for interest                                         $   368,634       $   364,959
                                                                                      ===========       ===========`

These condensed financial statements should be read
only in  connection  with  the  accompanying  notes to  condensed  financial
statements.-3-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)
Notes to Condensed Financial Statements (Unaudited)

#### NOTE 1 - GENERAL

See Summary of Significant  Accounting  Policies in the Trust's Annual Report
on  Form  10-  KSB405  for a  summary  of  the  Trust's  significant  accounting
policies.

The unaudited  condensed  financial  statements included herein were prepared
from the books of the Trust in accordance  with  generally  accepted  accounting
principles and reflect all adjustments (consisting of normal recurring accruals)
which are, in the opinion of  management,  necessary to a fair  statement of the
results of  operations  and  financial  position for the interim  periods.  Such
financial  statements  generally  conform to the  presentation  reflected in the
Trust's  Annual Report to  Shareholders.  The current  interim  period  reported
herein is included in the fiscal year subject to independent audit at the end of
that year and is not  necessarily an indication of the expected  results for the
fiscal year.

#### NOTE 2 - Weighted Average Interest Rates

Weighted  average  interest  rates and net interest  rate margins at June 30,
2001 and 2000, were as follows:

`Mortgage loan and                Total           Net interest
                                            church bond portfolio          indebtedness         rate margin
                                            ---------------------          ------------         -----------
         June 30, 2001                             10.23%                    5.75%                4.48%
         June 30, 2000                             10.59%                    8.50%                2.09%`

#### NOTE 3 - Contractual Maturities

Scheduled  principal  payments on mortgage  loans,  church  bonds and interim
loans and indebtedness  (including notes payable) outstanding at June 30,  2001,
for the five twelve-month periods subsequent to June 30, 2001, follow:

`Twelve-month period                    Mortgage loans, church bonds
                    ending June 30,                           and interim loans                Indebtedness
                    ---------------                           -----------------                ------------

                      2002                                    $    14,916,502                $    18,630,405
                      2003                                          1,247,876                             -
                      2004                                          1,316,835                             -
                      2005                                          1,351,936                             -
                      2006                                          1,423,156                             -
                                                              -----------------                ------------`

-4-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)
Notes to Condensed Financial Statements (Unaudited)

#### NOTE 4 - Mortgage Loans, Church Bonds and Interim Construction Loans

Mortgage  loans,  church  bonds and interim  construction  loans on which the
accrual of interest had been discontinued  amounted to $4,276,828 and $5,794,158
at June 30,  2001 and 2000,  respectively.  If interest on these mortgage loans,
church bonds and interim construction loans had been accrued as earned, interest
and fees on loans in the accompanying  condensed statements of income would have
been  increased by  approximately  $114,000  and  $156,000  for the  three-month
periods ended June 30,  2001 and 2000,  respectively.  Interest  income actually
recognized  during  2001  and  2000  was  approximately  $462,000  and  $18,000,
respectively.  Interest  income  recognized  during 2001 includes  approximately
$408,000 of interest collected on the pay-off of two nonaccrual loans.

This information is an integral part of the
accompanying condensed financial statements-5-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)

Item 2. Management's Discussion and Analysis or Plan of Operation

Results of Operations - Three-Month Period Ended June 30, 2001 as Compared to
the Three-Month Period Ended June 30, 2000:

### Revenues

The Trust's  revenues are derived from  interest  income earned on loans as well
as,  to a  lesser  degree,  interest  earned  on  church  bonds  and  short-term
investments.   The  increase  in  the  Trust's  revenues  of  $523,878  for  the
three-month period ended June 30, 2001, as compared to the corresponding  period
in 2000 is primarily due to the Trust  receiving full payment on two loans.  The
Trust received $1,730,776 in full and final payment of a loan owing to the Trust
from The Arbor of Natchitoches of Natchitoches,  Louisiana.  Such amount paid in
full the principal  and interest  owing to the Trust by such Borrower on May 11,
2001. The loan had been accounted for as a  nonperforming  loan by the Trust and
certain interest payments had been credited to principal. Therefore, the pay-off
resulted in additional  recognition of interest income of approximately $146,000
during May 2001.  In  addition,  the Trust  received  $490,000 in full and final
payment of a loan owing to the Trust from the Evangel Temple  Assembly of God of
Piedmont,  South  Carolina.  Such amount paid in full the principal and interest
owing to the Trust by such Borrower on May 18, 2001. The loan had been accounted
for as a nonperforming  loan by the Trust and certain interest payments had been
credited to principal. Therefore, the pay-off resulted in additional recognition
of interest income of  approximately  $262,000 during May 2001. At June 30, 2001
and 2000,  performing loans and church bonds were approximately  $36,683,000 and
$32,879,000, respectively, and the average rate of return was 10.23% at June 30,
2001 and 10.59% at June 30, 2000.

### Interest Expense

The most  significant  expense  item is interest  expense  which  comprised  the
majority of total operating  expense for each of the  three-month  periods ended
June 30, 2001 and 2000.  The  decrease of $13,000 in interest  expense  resulted
primarily  from  a  decrease  in  the  weighted  average  interest  rate  on all
indebtedness from 8.50% at June 30, 2000 to 5.75% at June 30, 2001.

### Other Income

Other  income was $8,071 for the three  months  ended June 30, 2001 and was less
than the $103,280 for the same period in 2000, primarily due to the gain on sale
of other real estate of $101,144 in 2000.

### Other Operating Expenses

Other operating expenses were $194,828 for the three months ended June 30, 2001,
which was an increase of  approximately  $26,000 over the quarter ended June 30,
2000.  The increase is primarily  attributed to an increase in travel expense of
approximately $9,000 and an increase in legal fees of approximately $7,000.

-6-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)

Results of  Operations -  Three-Month  Period Ended June 30, 2001 as Compared to
the Three-Month Period Ended June 30, 2000:

### New Accounting Standard

On April 1, 2001, the Trust adopted Financial  Accounting Standards Board No.
133,  Accounting for Derivative Instruments and Hedging  Activities.  The
adoption  of the new  standard  did not have a  material  impact on the  Trust's
financial statements.

-7-

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# CHURCH LOANS & INVESTMENTS TRUST

(A Real Estate Investment Trust)
PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K:
(a)    Exhibits:  None.
(b) Reports on Form 8-K: None

-8-

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# CHURCH LOANS & INVESTMENTS TRUST

SIGNATURES

In   accordance  with  the
requirements  of the Exchange Act, the  registrant  has caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

# CHURCH LOANS & INVESTMENTS TRUST

|By | /s/ B. R. McMorries
         ______________________________
                 B. R. McMorries, Chairman | Dated: August 14, 2001 | 
|-- | ------------------------------------------------------------------------------------------------------ | ---------------------- | 

|By | /s/ Kelly Archer
         ______________________________
                 Kelly Archer
                 Chief Financial Officer | Dated: August 14, 2001 | 
|-- | ------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | 

9

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