================================================

                    U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   ----------

                                  FORM 10-QSB

                     [x] QUARTERLY REPORT UNDER SECTION 13
                      OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934
                For the quarterly period ended December 31, 1998

                                       OR

                     [ ] TRANSITION REPORT UNDER SECTION 13
                      OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

                                   ----------

                           Commission File No. 0-8117


                        CHURCH LOANS & INVESTMENTS TRUST


     State of Organization                      IRS Employer Identification
     ---------------------                      ---------------------------
           Texas                                       No. 75-6030254
                                 5305 I-40 West
                             Amarillo, Texas 79106

                  Registrant's telephone number: 806-358-3666


                                   ----------


     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  December  31,  1998,  7,000,806  shares  of the  Registrant's  shares of
beneficial interest were outstanding.

     Transitional Small Business Disclosure Format (check one)

                               Yes [ _ ] No [ X ]
<PAGE>

                        CHURCH LOANS & INVESTMENTS TRUST



                                     INDEX

                                                                     Page
                                                                     ----
        Part I.

             Item 1:  Financial Information:

                      Condensed Balance Sheets at December 31, 1998
                          and March 31, 1998 .......................   1

                      Condensed Statements of Income for the
                          nine-month periods ended
                          December 31, 1998 and 1997 ..x............   2

                      Condensed Statements of Cash Flows
                          for the nine-month periods ended
                          December 31, 1998 and 1997 .x............    3

                      Notes to Condensed Financial Statements .....    4

             Item 2:  Management's Discussion and Analysis or
                       Plan of Operation ..........................    6

        Part II.  Other Information ...............................    9

        Signatures ................................................    10

<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                      Condensed Balance Sheets (Unaudited)
                      December 31, 1998 and March 31, 1998

                  ASSETS                       December 31, 1998  March 31, 1998
                  ------                       -----------------  --------------

CASH AND CASH EQUIVALENTS ......................   $    144,467    $     32,403
RECEIVABLES
    Mortgage loans and church bonds -
     performing ................................     23,677,616      22,165,629
    Interim construction loans - performing ....     12,893,228      10,732,915
    Nonperforming mortgage loans, church
     bonds and interim construction loans ......      3,646,763       2,492,095
    Less: Allowance for possible credit losses .     (1,170,213)     (1,035,213)
                                                   ------------    ------------
                                                     39,047,394      34,355,426
    Accrued interest receivable ................        348,145         341,360
    Notes receivable ...........................        475,195         405,860
                                                   ------------    ------------
                  Total receivables ............     39,870,736      35,102,646
PROPERTY AND EQUIPMENT, net ....................        185,865         197,619
REAL ESTATE ACQUIRED THROUGH FORECLOSURE .......        314,197       1,479,486
UNAMORTIZED DEBT EXPENSE, net and other assets .         39,023          62,960
                                                   ------------    ------------
TOTAL ASSETS ...................................   $ 40,554,286    $ 36,875,114
                                                   ============    ============
                  LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
    Notes payable and line of credit:
      Related party ............................   $  1,638,566    $  1,969,938
      Other ....................................     11,966,397       5,740,773
                                                   ------------    ------------
                                                     13,604,963       7,710,711
                                                   ------------    ------------
    Secured savings certificates:
      Related party ............................           --           240,000
      Other ....................................      3,414,377       6,823,823
                                                      3,414,377       7,063,823
    Accrued interest payable ...................         90,327          29,768
    Dividends payable ..........................      1,750,202            --   
    Other ......................................      1,063,694         781,455
                                                   ------------    ------------
                  Total liabilities ............     19,923,563      15,585,757
                                                   ------------    ------------
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 ...................         23,347         665,491
    Treasury shares, at cost (6,596 shares) ....        (16,490)           --   
                                                   ------------    ------------
                  Total shareholders' equity ...     20,630,723      21,289,357
                                                   ------------    ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .....   $ 40,554,286    $ 36,875,114
                                                   ============    ============
      These financial statements should be read only in connection with the
                   accompanying notes to financial statements.

                                      -1-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)
                   Condensed Statements of Income (Unaudited)
                    Three-month and nine-month periods ended
                           December 31, 1998 and 1997

                                    Three-month periods Nine-month periods ended
                                     ended December 31,    ended December 31,
                                      1998        1997      1998        1997
                                      ----        ----      ----        ----
INTEREST INCOME AND FEES
    Interest and fees on mortgage
      loans, church bonds, and
      interim construction loans  $1,155,129  $  952,766  $2,289,823  $1,885,973
INTEREST INCOME AND FEES
    Interest and fees on mortgage
      loans, church bonds, and
      interim construction loans  $1,048,424  $  970,903  $3,338,247  $2,856,876
    Interest on temporary
       investments .............      14,311      14,469      34,562      76,058
                                  ----------  ----------  ----------  ----------
          Total interest income
              and fees .........   1,062,735     985,372   3,372,809   2,932,934
                                  ----------  ----------  ----------  ----------
DEBT EXPENSE
    Interest ...................     272,362     227,823     864,147     690,359
    Amortization of:
       Registration cost .......        --          --          --         4,374
       Commissions paid
        to brokers .............       8,840      14,171      30,734      43,766
                                  ----------  ----------  ----------  ----------
          Total debt expense ...     281,202     241,994     894,881     738,499
                                  ----------  ----------  ----------  ----------
          Net interest income ..     781,533     743,378   2,477,928   2,194,435
PROVISION FOR POSSIBLE
    CREDIT  LOSSES .............      45,000      45,000     135,000     135,000
                                  ----------  ----------  ----------  ----------
          Net interest income
            less provision for
            possible credit losses   736,533     698,378   2,342,928   2,059,435
OTHER INCOME ...................      12,404      42,747      14,499      81,658
OTHER OPERATING EXPENSES
    General and administrative .     136,991     141,545     436,254     472,590
    Board of Trust Managers' fees     14,107      10,704      41,852      35,176
                                  ----------  ----------  ----------  ----------
          Total other
           operating expenses        151,098     152,249     478,106     507,766
                                  ----------  ----------  ----------  ----------
          Income before provisions
              for taxes ........     597,839     588,876   1,879,321   1,633,327
PROVISION FOR TAXES ............        --          --           449       3,627
                                  ----------  ----------  ----------  ----------
          NET INCOME ...........  $  597,839  $  588,876  $1,878,872  $1,629,700
                                  ==========  ==========  ==========  ==========
WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING ......   7,001,236   7,007,402   7,005,219   7,007,402
                                  ==========  ==========  ==========  ==========
NET INCOME PER SHARE ...........  $      .09       $. 08  $      .27  $      .23
                                  ==========  ==========  ==========  ==========
DIVIDENDS PER SHARE               $      .25       $ .21       $ .36       $ .31
                                  ==========  ==========  ==========  ==========

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

                                      -2-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)
                 Condensed Statements of Cash Flows (Unaudited)
               Nine-month periods ended December 31, 1998 and 1997

                                                          Nine-month periods
                                                          ended December 31,
                                                          1998           1997
                                                          ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income ...................................  $  1,878,872   $  1,629,700
    Adjustments to reconcile net income to net
     cash provided by operating activities:
          Depreciation ...........................        11,754         11,754
          Amortization of debt expense ...........        30,734         48,140
          Provision for possible credit losses ...       135,000        135,000
          Amortization of loan discounts .........      (241,515)       (63,090)
          Changes in:
              Accrued interest receivable ........        (6,785)       (88,690)
              Accrued interest payable ...........        60,559        (13,406)
              Other liabilities ..................       (62,444)       155,790
          Other, net .............................        (6,797)       (17,123)
                                                    ------------   ------------
                  Net cash provided by operating
                   activities ....................     1,799,378      1,798,075
                                                    ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Investment in mortgage and interim
       construction loans and church bonds .......   (23,803,670)   (20,542,903)
    Payments received on mortgage and interim
       construction loans
       and church bonds ..........................    20,612,398     21,001,310
    Advances of notes receivable .................      (356,053)      (212,471)
    Payments received on notes receivable ........       286,718        305,614
    Proceeds from sale of real estate acquired
       through foreclosure .......................       115,791           --   
                                                    ------------   ------------
                  Net cash provided (used) by
                   investing activities ..........    (3,144,816)       551,550
                                                    ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Sale of secured savings certificates .........          --        3,314,121
    Borrowings on notes payable ..................    22,881,133      1,611,412
    Principal payments on:
       Secured savings certificates ..............    (3,649,446)    (3,619,270)
       Notes payable .............................   (16,986,881)    (2,951,621)
    Commissions paid to broker on issuance
       of secured savings certificates ...........          --          (33,973)
    Cash dividends paid ..........................      (770,814)      (700,740)
    Purchase of treasury shares ..................       (16,490)          --   
                                                    ------------   ------------
                  Net cash provided (used) by
                   financing activities ..........     1,457,502     (2,380,071)
                                                    ------------   ------------
                  Increase (decrease) in cash
                   and cash equivalents ..........       112,064        (30,446)
CASH AND CASH EQUIVALENTS AT BEGINNING
    OF PERIOD ....................................        32,403        586,629
                                                    ------------   ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .......  $    144,467   $    556,183
                                                    ============   ============

Supplemental Disclosure of Cash Flow Information
    Cash paid during the period for interest .....  $    803,588   $    703,765
                                                    ============   ============

During  December 1998,  the Board of Trust  managers  declared cash dividends of
$1,750,202  ($.25 per share) payable in January 1999.  During December 1997, the
Board of Trust managers  declared cash dividends of $1,471,554  ($.21 per share)
payable in January 1998.

During  the nine  months  ended  December  31,  1997,  the Trust  foreclosed  on
$1,396,451 in loans that were delinquent.

During the nine months ended  December 31, 1998,  the Trust financed the sale of
two real estate properties acquired through foreclosure that had carrying values
of $1,049,498 and deferred a gain of $344,683.

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

                                      -3-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)
               Notes to Condensed Financial Statements (Unaudited)

NOTE 1 - GENERAL

See the Summary of  Significant  Accounting  Policies  included in the Financial
Statements in the Trust's Annual Report on Form 10-KSB405.

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 December 31,
1998 and 1997 were as follows:

                                Mortgage loan and         Total     Net interest
                               church bond portfolio  indebtedness   rate margin
                               ---------------------  ------------   -----------

              December 31, 1998        10.17%             6.91          3.26
              December 31, 1997        10.60%             7.42          3.18

NOTE 3 - CONTRACTUAL MATURITIES

Scheduled  principal payments on mortgage loans,  church bonds and interim loans
and  indebtedness  (including  secured savings  certificates  and notes payable)
outstanding at December 31, 1998, for the five twelve-month  periods  subsequent
to December 31, 1998, follow:

              Twelve-month period   Mortgage loans, church bonds
              ending December 31,        and interim loans          Indebtedness

                      1999                 $16,418,791                15,690,340
                      2000                   1,620,198                 1,329,000
                      2001                   1,563,320                        - 
                      2002                   1,588,148                        - 
                      2003                   1,666,119                        - 
                                           ===========                ==========

                                      -4-
<PAGE>
                        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  $3,646,763  and  $2,724,030  at
December 31, 1998 and 1997,  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 $211,000 and $115,000 for the nine-month periods
ended December 31, 1998 and 1997, respectively.  Interest actually recognized in
1998 and 1997 was approximately $67,000 and $72,000 respectively.

NOTE 5 - SECURED SAVINGS CERTIFICATES

Secured Savings  Certificates  (Certificates) are issued in amounts of $1,000 or
more and have single maturity dates from 30 days to 10 years from date of issue.
With  respect to an  individual  Certificate,  interest  rate and  frequency  of
payment of interest (either  monthly,  quarterly,  semiannually,  annually or at
maturity) are fixed at the time of issuance of the  Certificate.  Effective July
1997, Church Loans discontinued the sale of Certificates.

Certificates  are secured under the terms of an indenture that  requires,  among
other  things,  the  pledge of  mortgage  notes  receivable  with  total  unpaid
principal  amounts  not less  than  100% of the  aggregate  principal  amount of
Certificates outstanding.

NOTE 6 - ODD-LOT TENDER OFFERING

Effective  September 1, 1998,  the Trust began a tender offer at $2.50 per share
to all  shareholders  owning less than 100 shares of  beneficial  interest.  The
offer  expired  November  30,  1998.  A total of  $16,490  (6,596  shares)  were
purchased and are being held as treasury shares.

                   This information is an integral part of the
                       accompanying financial statements.

                                      -5-
<PAGE>
                        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  and  Nine-Month  Periods Ended December 31,
1998 as Compared to the  Three-Month  and Nine-Month  Periods Ended December 31,
1997:

                                    Revenues

The Trust's  revenues  are derived  primarily  from  interest  income  earned on
mortgage  loans,  church  bonds and  interim  construction  loans.  The  Trust's
revenues of  $1,062,735  for the  three-month  period  ended  December 31, 1998,
increased  from  $985,372  for the  corresponding  period in 1997.  The  Trust's
revenues  of  $3,372,809  for the  nine-month  period  ended  December  31, 1998
increased from $2,932,934 for the  corresponding  period.  The weighted  average
rate on mortgage loans,  church bonds and interim loans at December 31, 1998 and
1997 was 10.17% and 10.60%,  respectively.  The decrease in the weighted average
interest  rate was more than offset by  increased  earning  loan and church bond
balances which increased  significantly from $29,954,096 at December 31, 1997 to
$36,570,844 at December 31, 1998. Also included in the 1998 nine month period is
approximately  $170,000 of loan discount amortization  recognized from the early
pay-off of a large loan.

                                  Debt Expense

The most  significant  expense item is debt expense which comprised the majority
of total operating  expense for each of the  three-month and nine-month  periods
ended December 31, 1998 and 1997. Debt expense for the three-month  period ended
December 31, 1998 of $281,202 as compared to the corresponding amount in 1997 of
$241,994.  Debt expense of $894,881 for the nine-month period ended December 31,
1998, was increased as compared to the corresponding amount in 1997 of $738,499.
The weighted average interest rate on all indebtedness was 6.91% at December 31,
1998 as compared to 7.42% at  December  31,  1997.  Increased  debt  balances at
December 31, 1998 of $17,019,340 as compared to $11,974,490 at December 31, 1997
more than offset the decrease in weighted average interest rate.

                       Other Operating Income and Expenses

Other income for the nine month period in 1997 included approximately $77,000 in
rental  income from certain  other real estate.  Such property was not rented in
1998.

Other  operating  expenses were $151,098 for the three months ended December 31,
1998,  or  $1,151  less than the  comparable  period  in 1997.  Other  operating
expenses were $478,106 for the  nine-months  ended December 31, 1998, or $29,660
less than the comparable  period in 1997.  These decreases were primarily caused
by decreased  legal and other fees related to the  collection,  foreclosure  and
maintenance of several nonearning loans.

                                      -6-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)

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

                                Nonearning Assets

During the nine month period ended  December 31, 1998,  the Trust  classified as
nonearning  two loans  with  principal  balances  totaling  $1,521,655.  Accrued
interest  receivable  of  approximately  $62,000 was written  off. As with other
nonearning assets,  those loans are expected to have a negative impact on future
earnings.

                    Real Estate Acquired Through Foreclosure

Real estate acquired through  foreclosure loans of $314,197 at December 31, 1998
declined from the March 31, 1998 balance of $1,479,486  primarily because of the
sale of an assisted-living  center located Sedona,  Arizona which had a carrying
value of $976,000.  The property  was sold at a gain of $344,683;  however,  the
gain has been deferred because the Trust has provided interim  financing for the
sale.

                                    Year 2000

The following  information  which appears in the section  constitutes  Year 2000
Readiness  Disclosure,  pursuant  to  the  Year  2000  ("Y2K")  Information  and
Readiness Disclosure Act.

The Year 2000 issue is the result of computer systems using a two-digit  format,
as opposed to four  digits,  to indicate the year.  Any of the Trust's  computer
programs or hardware that have date-sensitive software or embedded chips may not
appropriately  interpret  dates  beyond  the year 1999.  This could  result in a
system failure,  miscalculation or other computer errors causing  disruptions of
operations.

The  Trust's  plan to  address  the  issue  involves  the  follow  five  phases:
awareness, assessment,  remediation,  testing and implementation.  The plan also
involves  communicating  with external service providers to ensure that they are
taking appropriate action to remedy any Year 2000 issues. To date, the Trust has
completed its  assessment of systems that could be affected by the Year 2000. As
part of the assessment  phase,  systems,  which have the greatest  impact,  were
designated as mission critical systems.

Internal mission  critical  systems include the Trust's internal  accounting and
information system. This system includes a small server-based local area network
and a small peer-to-peer network that uses commercially  available operating and
networking software. The vendors (primarily Microsoft,  Compaq and Gateway) have
certified this hardware and software as Year 2000 compliant. The Trust's primary
application programs (including general ledger, mortgage loan, shareholder, bond
financing and Secured Savings  Certificate  accounting  modules) are customized.
During  November  1998,  an  independent  consultant  performed  an  analysis to
determine if programs were Year 2000 compliant. The cost of the testing was less
than  $1,000.  The Trust  has  engaged  the  consultant  to modify  and test the
noncompliant  programs.  Remediation  began  about  December  1998  and  through
February 7, 1999 was 58% complete.  The remaining  programs will be modified and
tested in the remaining  portion of the first quarter or in the second  calendar
quarter of 1999.  It is  estimated  that the cost to modify the files will range
from $6,000-$7,500 (excludes the cost to upgrade and replace systems used in the
ordinary course of business). Such costs will be charged to expense as incurred.

                                      -7-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)

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

                              Year 2000 (Continued)

The Trust's  operations are relatively  simple.  As far as essential vendors are
concerned,  the primary ones are considered to be the Trust's  primary bank (the
same bank serves as  depositor  and  lender),  and the  electric  and  telephone
utility.  The Trust has received  reports from these  providers  regarding their
efforts to attain Y2K readiness.

The  negative  impact  of large  loan  customers  who have  not  dealt  with the
implications  of the Y2k  problem  on their  operations  could be serious to the
Trust.  However,  the Trust does not believe  that the risk to its typical  loan
customer is as great as it is to a normal commercial  operation.  This is due to
the fact that the source of loan payments generally made by all churches is from
individuals making  contributions via cash or check to the church.  Accordingly,
it is  believed  that most  churches  should not suffer  adversely  from the Y2K
issue. Nevertheless,  the Trust plans to survey its loan customers with balances
over  $100,000 in the first  quarter of  calendar  1999 to  determine  their Y2K
compliance.

The Trust believes that it has an effective program in place to resolve the Year
2000 issue in a timely manner and that it is unlikely that Year 2000 issues will
cause any  significant  problems  with  customer  service  or  otherwise  have a
material  adverse  impact on the Trust's  operations  or financial  performance.
However,  if appropriate  modifications are not completed in a timely manner for
some unexpected reason, the Year 2000 issue could impact the Trust's operations.
In  addition,  disruptions  in the economy  generally  resulting  from Year 2000
issues could also  materially  impact the Trust.  There can be no guarantee that
the systems of other companies on which the Trust is effected will be remediated
in a timely  manner and not have any adverse  impact on the Trust's  operations.
Therefore,  the Trust will  develop  contingency  plans in 1999 to minimize  the
impact on the Trust's operations if these  organizations fail to remediate their
systems properly.

                                      -8-
<PAGE>
                        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





                                      -9-
<PAGE>


                        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



DATE: February 12, 1999                            BY:/s/ B.R. McMorries
                                                   -----------------------------
                                                   B.R. McMorries,
                                                   Chairman of the Board of
                                                   Trust Managers


DATE: February 12, 1999                            BY:/s/ Kelly Archer
                                                   -----------------------------
                                                   Kelly Archer
                                                   Chief Financial Officer





                                      -10-