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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 December 31, 2003

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 |                       | 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, 2003,  8,346,889 shares of the  Registrants
shares of beneficial interest were outstanding.

Transitional Small Business Disclosure Format (check one) Yes ___
No X

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# CHURCH LOANS & INVESTMENTS TRUSTINDEX

|Part I.       | Financial
          Information                                                                                                            | Page
|------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ----
|Item 1:       | Financial Statements:                                                                                                                      |     
|              | Condensed
          Balance Sheets (unaudited) at December 31, 2003 and March 31, 2003                                                     | 1   
|              | Condensed Statements of Income
          (unaudited) for the three-month and nine-month periods
          ended December 31, 2003 and 2002 | 2   
|              | Condensed Statements of Cash Flows
          (unaudited) for the
          nine-month periods ended December 31, 2003 and 2002             | 3   
|              | Notes to Condensed Financial Statements
          (unaudited)                                                                              | 4   
|Item 2:       | Management's Discussion and Analysis or Plan of Operation                                                                                  | 6   
|Item 3:       | Controls and Procedures                                                                                                                    | 13  
|Part II.      | Other Information                                                                                                                          |     
|Item 5:       | Other Information                                                                                                                          | 14  
|Item 6(a):    | Exhibits                                                                                                                                   | 14  
|Signatures    | 15                                                                                                                                        
|Exhibit Index | 16                                                                                                                                        



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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)
December 31, 2003 and March 31, 2003

`ASSETS
                                                                               December 31, 2003    March 31, 2003
                                                                               -----------------   -----------------
CASH AND CASH EQUIVALENTS                                                       $        396,832   $         273,432

RECEIVABLES
     Mortgage loans and church bonds - performing                                     35,513,043          35,689,239
     Interim construction loans - performing                                           8,456,036          15,672,768
     Nonperforming mortgage loans, church bonds
         and interim construction loans                                                3,159,460           2,834,574
     Less: Allowance for credit losses                                                (1,733,249)         (1,733,249)
                                                                               -----------------   -----------------
                                                                                      45,395,290          52,463,332
     Accrued interest receivable                                                         283,891             445,778
     Notes receivable                                                                    151,770             302,719
                                                                               -----------------   -----------------
                  Net receivables                                                     45,830,951          53,211,829
                                                                               -----------------   -----------------
PROPERTY AND EQUIPMENT, net                                                              334,915             129,774
OTHER REAL ESTATE OWNED                                                                1,328,832           1,433,087
OTHER ASSETS                                                                             254,609              58,275
                                                                               -----------------   -----------------
TOTAL ASSETS                                                                    $     48,146,139   $      55,106,397
                                                                               =================   =================

                                       Liabilities and Shareholders' Equity

LIABILITIES
     Notes payable and line of credit:
         Related parties                                                        $      2,077,445   $       2,236,993
         Other                                                                        17,942,030          30,133,721
                                                                               -----------------   -----------------
                                                                                      20,019,475          32,370,714
     Accrued interest payable                                                             86,558             135,235
     Other                                                                             1,143,344           1,160,660
                                                                               -----------------   -----------------
                  Total liabilities                                                   21,249,377          33,666,609
                                                                               -----------------   -----------------
SHAREHOLDERS' EQUITY
     Shares of beneficial interest, no par value;
         authorized shares unlimited, 8,353,485 and
         7,007,402 shares issued, respectively                                        24,540,740          20,623,866
     Undistributed net income                                                          2,372,512             832,412
     Treasury shares, at cost (6,596 shares)                                             (16,490)            (16,490)
                                                                               -----------------   -----------------
                  Total shareholders' equity                                          26,896,762          21,439,788
                                                                               -----------------   -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $     48,146,139   $      55,106,397
                                                                               =================   =================`

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

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Condensed Statements of Income (Unaudited)
Three-month and nine-month periods ended
December 31, 2003 and 2002

`Three-month periods ended           Nine-month periods ended
                                                             December 31,                       December 31,
                                                        2003              2002             2003              2002
INTEREST INCOME AND FEES                                ----              ----             ----              ----
    Interest and fees on mortgage
      loans, church bonds, and
      interim construction loans                  $   1,021,745   $     1,133,408   $    3,200,001   $     3,275,479
    Interest on temporary
       investments                                       25,553            45,373          330,560           177,250
                                                  -------------   ---------------   --------------   ---------------
          Total interest income and fees              1,047,298         1,178,781        3,530,561         3,452,729
                                                  -------------   ---------------   --------------   ---------------
DEBT EXPENSE
    Interest                                            209,563           252,272          665,177           723,226
                                                  -------------   ---------------   --------------   ---------------
          Total debt expense                            209,563           252,272          665,177           723,226
                                                  -------------   ---------------   --------------   ---------------
          Net interest income                           837,735           926,509        2,865,384         2,729,503

PROVISION FOR POSSIBLE
    CREDIT LOSSES                                           -                 -                -                 -
                                                  -------------   ---------------   --------------   ---------------
          Net interest income
            less provision for
            possible credit losses                      837,735           926,509        2,865,384         2,729,503

OTHER INCOME                                             15,292            62,311          150,834            76,523
OTHER OPERATING EXPENSES
    General and administrative                          231,076           184,760          660,371           533,062
    Board of Trust Managers' fees                        13,773            13,308           42,783            45,167
                                                  -------------   ---------------   --------------   ---------------
          Total other operating expenses                244,849           198,068          703,154           578,229
                                                  -------------   ---------------   --------------   ---------------
          Income before provision
              for taxes                                 608,178           790,752        2,313,064         2,227,797
PROVISION FOR INCOME TAXES                                2,876            43,740            2,876            66,064
                                                  -------------   ---------------   --------------   ---------------
NET INCOME                                        $     605,302   $       747,012   $    2,310,188   $     2,161,733
                                                  =============   ===============   ==============   ===============
WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING                             7,034,458         7,000,806        7,012,105         7,000,806
                                                  =============   ===============   ==============   ===============
NET INCOME PER SHARE                                 $ 0.09            $ 0.11          $ 0.33             $ 0.31
                                                     ======            ======          ======             ======
DIVIDENDS PER SHARE                                  $ -                $-             $ 0.11             $ 0.12
                                                     ======            ======          ======             ======`

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

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Condensed Statements of Cash Flows (Unaudited)
Nine-month periods ended December 31, 2003 and 2002

`Nine-month periods
                                                                                          ended December 31,
                                                                                        2003               2002
                                                                                        ----               ----
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                                     $   2,310,188   $      2,161,733
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation                                                                         -                5,157
         Amortization of loan discounts                                                   (19,228)           (22,965)
         Gain on sale of other real estate                                               (107,643)            (9,321)
         Changes in:
           Accrued interest receivable                                                    161,887             37,473
           Accrued interest payable                                                       (48,677)            86,836
           Other liabilities                                                              (17,316)           250,586
           Federal income taxes payable                                                       -              (73,810)
           Other, net                                                                      28,003             17,692
                                                                                    -------------   ----------------
                  Net cash provided by operating activities                             2,307,214          2,453,381
                                                                                    -------------   ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in mortgage and interim construction
       loans and church bonds                                                         (19,569,218)       (22,538,359)
     Payments received on mortgage and interim
       construction loans and church bonds                                             26,508,274         17,553,294
     Purchases of property and equipment                                                 (205,141)               -
     Advances of notes receivable                                                         (30,151)          (249,907)
     Payments received on notes receivable                                                181,100            491,999
     Proceeds from sale of other real estate                                              360,112            378,627
     Additional investment in other real estate                                               -              (30,511)
                                                                                    -------------   ----------------
                  Net cash provided (used) by investing activities                      7,244,976         (4,394,857)
                                                                                    -------------   ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Borrowings on notes payable                                                       23,406,322         23,976,109
     Principal payments on notes payable                                              (35,757,561)       (20,993,409)
     Cash received from issuance of shares of beneficial interest
       net of issuance cost                                                             3,916,874                -
     Cash dividends paid                                                                 (770,088)          (840,097)
     Other                                                                               (224,337)               -
                                                                                    -------------   ----------------
                  Net cash provided (used) by financing activities                     (9,428,790)         2,142,603
                                                                                    -------------   ----------------
                  Increase in cash and cash equivalents                                   123,400            201,127

CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                                                                  273,432            134,889
                                                                                    -------------   ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $     396,832   $        336,016
                                                                                    =============   ================
Supplemental disclosure of cash flow information
     Cash paid during the period for interest                                       $     713,854   $        636,390
                                                                                    =============   ================
     Real estate acquired through foreclosure                                       $     148,214   $        515,585
                                                                                    =============   ================`

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

---

|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-KSB 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 December 31, 2003 and 2002, were as follows:

`Mortgage and interim
                                            construction loan and              Total           Net interest
                                            church bond portfolio          indebtedness         rate margin
                                            ---------------------          ------------        ------------
         December 31, 2003                          7.23%                    3.00%                4.23%
         December 31, 2002                          8.24%                    3.25%                4.99%`

#### NOTE 3 - Contractual Maturities

Scheduled  principal  payments on mortgage  loans,  church bonds and interim  construction  loans and  indebtedness
(including  notes  payable)  outstanding at  December 31,  2003, for the five  twelve-month  periods  subsequent to
December 31, 2003, follow:

`Twelve-month period                Mortgage loans, church bonds
                  ending December 31,               and interim construction loans            Indebtedness
                  -------------------               ------------------------------           ---------------
                      2004                                 $    10,526,321                   $    20,019,475
                      2005                                       2,321,184                               -
                      2006                                       2,370,417                               -
                      2007                                       2,486,841                               -
                      2008                                       2,354,799                               -`

-4-

---

|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 $3,159,460 and $1,618,805 at  December 31,  2003 and 2002,  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 that would have been  recorded  under the  original
terms  amounted to  approximately  $234,000 and $191,000 for the  nine-month  periods  ended  December 31, 2003 and
2002,  respectively.  Interest  income  actually  recognized  during 2003 and 2002 was  approximately  $102,000 and
$16,000, respectively.

#### NOTE 5 - SECURITIES OFFERING

The Trust filed Form S-11, a Registration  Statement,  (the Statement) with the Securities and Exchange  Commission
indicating the Trust's intent to offer 7,000,000  additional  shares at a price of $3.00 per share.  The purpose of
this offering was to raise  additional  capital in order for the Trust to make  additional  mortgage loans and as a
result,  to further grow the company.  The  effective  date of the  registration  was August 14, 2003. In addition,
on various  dates from  August 14,  2003  through  December 31,  2003 this  offering  became  effective  in various
states.  As of December 31, 2003,  the Trust had sold and issued an  additional  1,346,083  shares  resulting in an
increase  of  $3,916,874, net of issuance costs,  in the  Trust's  shareholder  equity.  It is the  Trust's  intent to  continue  to pursue
registration in the remaining  states where the Trust has filed for  registration  and to continue  efforts to sell
these shares.

#### NOTE 6 - SUBSEQUENT EVENT

In January 2004,  the Trust declared and paid  dividends of $0.25 per share to  shareholders  of record on December
31, 2003 totaling $2,086,722.

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

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Notes to Condensed Financial Statements (Unaudited)

Item 2. Managements' Discussion and Analysis or Plan of Operation.

#### Forward-looking Statement Disclaimer

The  following  Management's  Discussion  and Analysis of  Financial  Condition  and Results of Operation  includes
forward-looking  statements  within the meaning of the Section 27A of the Securities  Act of 1933, as amended,  and
Section  21E of the  Securities  Exchange  Act of 1934,  as  amended.  All  statements  other  than  statements  of
historical  fact  made  herein  are  forward-looking,  which  can  be  identified  by the  use  of  forward-looking
terminology  such as "may," "will,"  "expect,"  "anticipate,"  "estimate,"  "believe,"  "continue" or other similar
words.  Such  forward-looking  statements  are based  upon  management's  current  plans and  expectations  and are
subject to risks and  uncertainties  that could cause actual results to differ  materially  from those described in
the forward-looking statements, including the following:

- Competition in the business of making loans to churches;
- A decline in the general economic conditions;
- A decline in real estate values thereby affecting the value of the collateral securing the loans made by the Trust;
- A rise in interest rates resulting in higher cost of funds to the Trust prior to the re-pricing of the loans owing to the Trust;
- Inability of the Trust to borrow funds and at reasonable rates of interest;
- General risks of lending;
- Change in federal or state laws affecting the Trust's operations;
- Loss of critical management; and
- Other risks.

These risks and  uncertainties  are not  intended to be  exhaustive  and should be read in  conjunction  with other
cautionary statements made herein.

#### Results of  Operations-Three-month  period  ended  December  31, 2003 as compared to the  three-month  period ended
December 31, 2002

Our 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.  During the three-month  period ended December 31, 2003,  interest income
and fees decreased by $131,483  (11%) over the  three-month  period ended  December 31, 2002.  Interest and fees on
mortgage loans,  church bonds and interim loans decreased during the three-month  period ended December 31, 2003 as
compared to the  three-month  period ended December 31, 2002,  $111,663 or 10%.  Interest on temporary  investments
also decreased during the period by $19,820.

Net interest  income for the  three-month  period ended  December  31, 2003 as compared to the  three-month  period
ended  December 31, 2002  decreased  from  $926,509 to $837,735,  a decrease of $88,774  (10%).  This  decrease was
primarily  attributable  to the  decrease in interest  income and fees.  The  decrease in interest  income and fees
during the  three-month  period ended  December 31, 2003 as compared to the  three-month  period ended December 31,
2002 was offset

-6-

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

#### Results of  Operations-Three-month  period  ended  December  31, 2003 as compared to the  three-month  period ended
December 31, 2002 (Continued)

by a decrease  in our debt  expense.  This  decrease  in our debt  expense was the result of a decrease in interest
rates on our debt and a decrease in our total debt  outstanding.  The average  interest rate on our debt  decreased
from 3.25% as of December 31, 2002 to 3.00% as of  December 31,  2003.  This decrease in interest  rates charged on
our debt coupled with a decrease in our  outstanding  debt from  $28,837,255 as of December 31, 2002 to $20,019,475
as of  December 31,  2003  resulted in a decrease in debt expense from  $252,272 for the  three-month  period ended
December 31, 2002 to $209,563 for the three-month period ended December 31, 2003, a decrease of $42,709 or 17%.

The average  interest rate on our loans and church bonds decreased from 8.24% as of  December 31,  2002 to 7.23% as
of  December  31,  2003.  This  decrease  in the rates we earned on our  portfolio  of loans and church  bonds also
contributed to the decrease in interest  income during the  three-month  period ended December 31, 2003 as compared
to the three-month period ended December 31, 2002.

There was a decrease in the amount of our performing  interim loans from  $13,885,053 as of  December 31,  2002, to
$8,456,036 as of December 31, 2003.  This decrease was  primarily  attributable  to the payoff of one major interim
loan that had a principal  balance owing as of  December 31,  2002 of  $7,533,319.  There was a slight  decrease in
performing  mortgage  loans and church  bonds  from  $35,950,218  as of  December  31,  2002 to  $35,513,043  as of
December 31,  2003.  In  addition,  nonperforming  loans  increased  from  $1,618,805  as of  December 31,  2002 to
$3,159,460 as of December 31,  2003. Total performing and nonperform-ing  mortgage loans,  church bonds and interim
loans decreased from $51,454,076 as of December 31, 2002 to $47,128,539 as of December 31, 2003.

Our net income for the  three-month  period ended  December 31, 2003 was $605,302  ($.09 per share),  a decrease of
$141,710 (19%) as compared to the three-month  period ended  December 31,  2002. This decrease was  attributable to
the decrease in net interest  income,  a decrease in other  income,  and an increase in general and  administrative
expenses.  As discussed  above,  net interest  income  decreased  from  $926,509 for the  three-month  period ended
December 31,  2002 to $837,735 for the  three-month  period ended  December 31,  2003, a decrease of $88,774 (10%).
Other  income  decreased  from  $62,311  for the  three-month  period  ended  December 31,  2002 to $15,292 for the
three-month period ended December 31, 2003, a decrease of $47,019.

General and administrative  expenses increased from $184,760 for the three-month period ended December 31,  2002 to
$231,076 for the three-month period ended December 31, 2003, an increase of $46,316 or 25%.

-7-

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

#### Results of  Operations-Nine-month  period  ended  December  31,  2003 as compared to the  nine-month  period  ended
December 31, 2002

During the nine-month  period ended December 31, 2003,  interest earned and fees increased by $77,832 (2%) over the
nine-month  period ended  December 31, 2002.  This increase was primarily  attributable  to the receipt of interest
earned on temporary investments.

Commitment  fees earned during the nine-month  period ended December 31, 2003 as compared to the nine-month  period
ended  December 31, 2002,  increased by $99,237.  This increase was primarily the result of the payoff of two loans
prior to maturity  resulting in the immediate  recognition  of the unearned  commitment  fees relative to these two
loans.

Interest  earned on  temporary  investments  was  $330,560 for the  nine-month  period  ended  December 31, 2003 as
compared to $177,250 for the  nine-month  period ended  December  31,  2002,  an increase of $153,310 or 86%.  This
increase was attributable to the sale or payment of church bonds held by the trust.

The  increase in interest  income and fees for the  nine-month  period  ended  December 31, 2003 as compared to the
nine-month  period ended  December 31, 2002 was offset by a decrease in the interest  rates on our loan  portfolio.
As mentioned  above,  the average  interest rate on our loans and church bonds  decreased from 8.24% as of December
31, 2002, to 7.23% as of December 31, 2003.

Our net income for the nine-month  period ended December 31, 2003, was $2,310,188 ($.33 per share),  an increase of
$148,455 (7%) as compared to the nine-month  period ended December 31, 2002.  This increase was  attributable to an
increase in net interest  income and an increase in other income.  Net interest  income  increased from  $2,729,503
for the  nine-month  period ended  December 31, 2002, to $2,865,384  for the  nine-month  period ended December 31,
2003, an increase of $135,881 (5%).  Other income  increased from $76,523 for the nine-month  period ended December
31, 2002,  to $150,834 for the  nine-month  period ended  December  31, 2003,  an increase of $74,311  (97%).  This
increase was primarily the result of the sale of property  acquired by us through a foreclosure of a  nonperforming
loan.  This sale resulted in a gain of $107,643.

Nonperforming  loans,  church  bonds and  interim  loans  increased  from  $1,618,805  as of  December  31, 2002 to
$3,159,460  as of December 31,  2003,  an increase of  $1,540,655.  The accrual of interest on these loans has been
discontinued.  If interest on these  mortgage  loans,  church  bonds and interim  loans had been accrued as earned,
interest  and fees on loans that would have been  recorded  under the  original  terms  amounted  to  approximately
$234,000 and $191,000 for the nine-month periods ended December 31, 2003 and 2002, respectively.
Interest income actually recognized during 2003 and 2002 was approximately
$102,000 and $16,000, respectively.

-8-

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

#### Results of  Operations-Nine-month  period  ended  December  31,  2003 as compared to the  nine-month  period  ended
December 31, 2002
(Continued)

General and  administrative  expenses  increased from $533,062 for the nine-month period ended December 31, 2002 to
$660,371 for the  nine-month  period  ended  December 31, 2003,  an increase of $127,309  (24%).  This  increase is
primarily  attributable  to an  increase  in  payroll  expense  due to adding an  additional  employee  during  the
nine-month  period ended December 31, 2003, an increase in computer  software  costs incurred in migrating  certain
application software from an existing Digital platform to a Windows platform and expenses  (insurance,  maintenance
and legal) related to real estate acquired through foreclosure or securing loans in default.

Results of Operations-Nine-month period ended December 31, 2003 as
compared to the year ended March 31, 2003

Our  performing  mortgage  loans and church  bonds  decreased  slightly  from  $35,689,239  as of March 31, 2003 to
$35,513,043 as of December 31, 2003.  Furthermore,  our portfolio of performing  interim loans decreased during the
nine-month  period  ended  December  31,  2003 from  $15,672,768  to  $8,456,036,  a decrease of  $7,216,732.  This
decrease was  primarily  attributable  to the payoff of one interim loan with a balance  owing as of March 31, 2003
of $7,700,000.  Mortgage  loans,  interim loans and church bonds held by us decreased from  $54,196,581 as of March
31, 2003 to $47,128,539 as of December 31, 2003, a decrease of $7,068,042 (13%).

Our  liabilities  decreased from  $33,666,609 as of March 31, 2003 to $21,249,377  as of  December 31,  2003.  This
decrease was primarily  attributable  to the  application of the proceeds of loan payoffs and the proceeds from the
sale of our shares to the reduction of our line of credit owing to the Amarillo National Bank.

We added one full-time  employee,  Josh Shields,  in June 2003.  Mr.  Shields is 25 years of age and previously was
employed  from  January 2000 through May 2003 with Wells Fargo Bank in  Amarillo,  Texas  (previously  known as The
First National Bank of Amarillo).  Mr.  Shields  serves as a Vice President of Church Loans and works  primarily in
the area of the marketing loan services and underwriting of loans for Church Loans.

Pursuant to authority  granted by our Board of Trust  Managers,  on Tuesday,  June 3, 2003, the Strategic  Planning
Committee  of the  Board of Trust  Managers  authorized  management  to  proceed  to  register  an  offering  of an
additional  7,000,000  shares of  certificates  of  beneficial  interest  in  Church  Loans at a price of $3.00 per
share.  On June 26,  2003 the Board of Trust  Managers  formally  authorized  such  offering  and SEC Form S-11 was
filed with the SEC on July 3,  2003.  This offering  became  effective  with the SEC on August 14, 2003. On various
dates from August 14, 2003 through  December 31, 2003 this offering became  effective in various  states.  Sales of
such shares  began in December  2003.  As of December  31,  2003,  we had sold and issued an  additional  1,346,083
shares  resulting in an increase of $3,916,874, net of issuance costs, in our  shareholder  equity.  It is our intent to continue to pursue
registration in the remaining  states where we have filed for  registration  and to continue  efforts to sell these
shares.

-9-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

#### Results of Operations-Nine-month period ended December 31, 2003 as compared to the year ended March 31, 2003
(Continued)

Total  shareholder  equity has increased  from  $21,439,788  as of March 31, 2003 to $26,896,762 as of December 31,
2003,  an increase of  $5,456,974  or 25%.  This  increase is  attributable  to the sale of new shares as discussed
above and to an increase in undistributed net income.

Undistributed  net income as of December  31, 2003 was  $2,372,512  as compared to $832,412 as of March 31, 2003. A
dividend was declared at the January 2004  meeting of the Board of Trust  Managers for  shareholders  of records as
of December 31, 2003.  This dividend was $.25 per share or $2,086,722.

As expected,  the sale of new shares in December  2003  diluted the dividend  that would have been paid to existing
shareholders.  This dilution amounted to approximately $.05 per share.

#### Liquidity and Capital Resources

We are engaged  primarily in the business of making  permanent  and interim  loans to churches and other  nonprofit
organizations,  and to other  borrowers,  including  businesses  engaged in the building and  operation of assisted
living  centers.  At March 31, 2003,  we had five loans to two  different  borrowers  which are secured by assisted
living  centers  which  totaled  approximately  $7,961,000.  Three  of these  loans  were to  affiliated  borrowers
totaling  approximately  $1,660,000  and with the remaining two loans to another  borrower  totaling  approximately
$6,301,000.

Our assets  primarily  consist of our loan  portfolio,  real estate  acquired  through  foreclosure  and our office
building and facilities.  Our operational  expenses are comprised of the  maintenance of our office  building,  the
payment of the salaries of our  management  and support  staff,  office  expenses,  fees paid to the Board of Trust
Managers,  the payment for legal and accounting  services,  and expenses  incurred relative to real estate securing
our loans or acquired  through  foreclosure.  Substantially  all of our assets are  invested in the  permanent  and
interim  loans.  Our only  potential  liquidity  problems  are  related to the timely and proper  repayment  of the
leveraged  funds  we  have  borrowed  to  make  loans  in  excess  of our  capital  and the  ability  to fund  loan
commitments.  All of our  indebtedness  is generally  classified as short term having  maturities  ranging from "on
demand" to maturities repayable over various periods extending through fiscal 2005.

All of our debt  obligations  outstanding  as of December 31, 2003,  in the amount of  $20,019,475,  will mature in
fiscal  2005.  These debt  obligations  primarily  consist of our bank line of credit and Master  Note  Agreements.
As of December 31, 2003, our loan  agreement  with the Amarillo  National Bank provided for a line of credit in the
amount of  $25,000,000.  The outstanding balance at December 31, 2003 was
$7,098,000. Although the bank line of credit matures in fiscal 2005, it is  anticipated  that the line
of credit  will be  renewed  annually.  In the event that the bank  elects not to renew the line of credit,  we may
under the terms of the loan  agreement  retire the line of credit over a period of time,  not to exceed five years,
equal to the weighted  average  remaining term of all of our real estate lien notes which are pledged to secure the
bank line of credit.

-10-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

Liquidity and Capital Resources (Continued)

At  December  31,  2003,  loans to us under  Master  Note  Agreements,  which are in  effect  demand  notes,  total
$12,921,475.  In the  past,  we have  utilized  our  bank  line of  credit  and the  principal  paid to us upon our
outstanding loan portfolio in order to meet our maturing obligations.

At  December  31,  2003,  the balance  which could be borrowed by us upon our bank line of credit was  $17,902,000.
The principal  payments  scheduled to be received by us upon our loan portfolio for the twelve-month  period ending
December  31,  2004 and  2005  are  $10,526,321  and  $2,321,184,  respectively.  Assuming  all of these  scheduled
principal  payments are received,  these  payments,  together with the balance  available to us on our bank line of
credit,  should  provide  us with  sufficient  funds to meet our  maturing  obligations  and fund loan  commitments
without the necessity of borrowing funds from other sources.

Effective  April 14,  2003,  our bank line of credit  was  increased  from  $24,000,000  to  $35,000,000.  However,
pursuant  to our  agreement  and in order to reduce  non-use  fees to the bank,  our line of credit was  reduced to
$25,000,000  with the renewal of this line of credit  arrangement  on December 31, 2003.  Based upon our success in
obtaining  borrowings  in the  past,  we are  confident  that,  should it be  necessary,  we will be able to obtain
additional bank financing in the future in sufficient amounts for us to timely meet all of our obligations.

Should all the scheduled  principal payments upon loans not be received,  and should we be unable to borrow against
our line of credit,  and should  borrowings  from other sources not be  available,  it would be necessary to sell a
portion of our mortgage loan  portfolio in order for it to meet all of its financial  obligations.  At December 31,
2003, the principal  balance of our loan and church bond  portfolio was  $47,128,539,  net of unamortized  purchase
discounts.  The  weighted  average  interest  rate on loans and church  bonds was 7.23% per  annum.  In view of the
normal  marketability  of  conventional  loans, we might be required to discount a majority of these loans in order
for them to be  attractive  for  purchase.  The  principal  amount of these loans if discounted to yield a weighted
average  interest  rate of 12%,  14% and 16% would be  $28,394,942,  $24,338,521,  and  $21,296,206,  respectively.
There is no assurance  that we would be able to sell all, or a portion of our  portfolio of loans,  in which event,
it would be  necessary  to secure a loan,  or  loans,  from a lender  in order to meet our  financial  obligations.
There is no  assurance  that we  would be able to  secure a loan in such  instance.  We have  sold  only one of the
loans in our mortgage loan portfolio and, therefore, we have limited experience in this area.

Principal  payments  scheduled to be received upon our permanent  loan  portfolio  during the  twelve-month  period
ending  September  30,  2004  and  2005,  if not used to fund new loan  commitments,  would be used to  reduce  the
outstanding  indebtedness  of the Trust.  Should we use the payments of principal  which shall be received upon our
loan  portfolio to reduce our  outstanding  indebtedness,  our interest  expense will  decrease.  In such instance,
whether the decrease in the  interest  income will exceed,  or be less than,  the decrease in the interest  expense
will  largely  be  dependent  upon the  prime  rate of  interest  prevailing  at such time due to the fact that the
interest  to be earned upon our  mortgage  loan  portfolio  is  generally  based upon a fixed rate of interest or a
variable  rate of interest that  periodically  reprices,  while the interest to be paid by us upon our  outstanding
debts is directly, or indirectly, tied to the prime rate of interest charged by major domestic banks.

-11-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

#### Liquidity and Capital Resources (Continued)

As of December 31, 2003, a substantial portion of the promissory notes
evidencing the loans made by us has been
pledged to secure our bank line of credit.  Promissory  notes totaling  $28,329,101  were pledged  against the bank
line of credit which had a total  outstanding  balance of  $7,098,000.  The required  collateral for this bank loan
was  $7,807,800,  leaving  an excess of  promissory  notes  which have been  pledged  to secure  said bank notes of
$20,521,301.  These excess  promissory  notes may be  reassigned  by the bank to us to be sold in order to meet our
financial  obligations.  Should it be  necessary,  in order to meet our financial  obligations,  these excess notes
amounting to $20,521,301 and other  additional  promissory  notes in the approximate  amount of $26,607,238  (for a
total amount of $47,128,539) would be available to be sold to meet our  financial  obligations.  Should  the  excess  promissory  notes be  assigned  by the bank to us as  heretofore
described,  the bank line of credit  would  continue to be secured by the  required  ratio of notes  pledged to the
principal  balance  of the bank line of credit.  There is no  assurance  that we would be able to sell all,  or any
portion of, these notes.

Cash flows from operating  activities  consist  primarily of net income.  The primary  components of net income are
interest  income and expense.  Interest  income should continue to be the main source of cash provided by operating
activities;  however,  the  availability  of this cash flow is dependent upon the ability of the borrowers to repay
loans.  Although there was an increase in the amount of  nonperforming  loans as of December 31, 2003,  compared to
December  31,  2002,  cash  provided by operating  activities  has been and is expected to be a  relatively  stable
source of cash flow.

Cash flows from investing  activities  results  primarily from investment in and payments  received on mortgage and
interim construction loans and church bonds.

Cash flows from  financing  activities  relate  primarily to the  borrowings  and payments on notes payable and the
line of  credit.  Borrowings  are made as funds are  needed to make loans or as  current  obligations  become  due.
Based  upon our  success in  obtaining  borrowings  in the past,  we are  confident  that we will be able to obtain
borrowings in the future in  sufficient  amounts,  along with payments to be received on loans,  to timely meet our
obligations.

#### Inflation

At December 31, 2003, the  weighted-average  interest rate on our mortgage loan and church bond portfolio was 7.23%
per annum  while the  weighted-average  interest  rate upon all our  borrowings  was 3.00% per  annum.  Although  a
majority of the loans  constituting  our loan portfolio have been made at variable rates of interest that generally
reprice either daily, annually, or otherwise  periodically,  a portion of the loans constituting our loan portfolio
have been made at fixed rates of interest and,  therefore,  are not subject to being increased or decreased  during
the term of the  loan.  All of our  indebtedness  is  either  directly  or  indirectly  tied to the  prime  rate of
interest  charged by major banking  institutions  and,  therefore,  is subject to  fluctuation.  During  periods of
inflation,  the prime rate of interest charged by major banking institutions,  as well as the interest rate or cost
of  borrowing  money  from any  lender,  generally  increases.  Consequently,  during an  inflationary  period  our
interest  expense  would  increase.  Since our interest  income  would not increase as rapidly,  an increase in our
interest  expense  would  decrease  our net  income.  However,

-12-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

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

#### Inflation (Continued)

interest  income  should  subsequently  increase as
variable-rate  loans reprice.  Should the amount of our loans and the amount of our  indebtedness  remain constant,
and should the  weighted-average  interest rate upon the indebtedness  increase to approximately  17.02% per annum,
the interest income and the interest expense of the Trust would be substantially equal.

#### Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements or commitments other than our normal loan commitments.

#### New Accounting Standards

We do not believe the adoption of any recently issued  pronouncements by the Financial  Accounting  Standards Board
will have a significant impact on our financial statements.

Item 3.  Controls and Procedures

The Trust's  chief  executive  officer and its senior vice  president  are charged with making an evaluation of the
Trust's  disclosure  controls  and  procedures.   These  controls  and  procedures  are  designed  to  ensure  that
information  required to be  disclosed  in reports  mandated by the  Securities  Exchange  Act of 1934 is recorded,
communicated  to  management,  and  accurately  reported  within the  required  time  periods.  The  Trust's  chief
executive  officer and senior vice  president  have  concluded,  based upon their  evaluation of these controls and
procedures as of December 31, 2003, that the Trust's disclosure controls and procedures are effective.

There  have  been no  significant  changes  in the  Trust's  internal  controls  or in  other  factors  that  could
significantly affect these controls subsequent to the date of their evaluation.

-13-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

PART II. OTHER INFORMATION

Item 5 Other Information:

As noted in Exhibit 17, Mr. Terry Hays resigned as a member of the Board of
Trust Managers effective October 28, 2003. Such resignation was not due to any
disagreement with the Trust, its board of Trust Managers or its management. Such
vacancy has not been filled at this time.

Item 6(a) Exhibits:

| | Exhibit 17 -  Letter
                                           of Resignation as a Member of the
                                           Board of Trust Managers from Mr.
                                           Terry Hays.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Exhibit 31.1 -  Certification
  by the  President and CFO Pursuant to Section 302 of the  Sarbanes-Oxley  Act
 and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934                                            
|
| | Exhibit 31.2 -  Certification
 by the Senior Vice  President  Pursuant to Section 302 of the  Sarbanes-Oxley
 Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934                                         
|
| | Exhibit 32.1 -  Certification
 Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002 - President & CFO                                                                         
|
| | Exhibit 32.2 -  Certification
Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 - Senior Vice President                                                                     

-14-

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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: February 12, 2004 | 
|-- | ------------------------------------------------------------------------------------------------------ | ------------------------ | 



|By | /s/ Kelly Archer
         ______________________________
                 Kelly Archer
                 Chief Financial Officer | Dated: February 12, 2004 | 
|-- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | 

-15-

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# CHURCH LOANS & INVESTMENTS TRUSTEXHIBIT INDEX

|ExhibitNumber | Description                                                                                                                                                            | Page
|------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Exhibit 17    | Letter of Resignation as a Member of the Board of Trust Managers from Mr. Terry Hays                                                                                   | 17  
|Exhibit 31.1  | Certification by the President and CFO Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934     | 18  
|Exhibit 31.2  | Certification by the Senior Vice President Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 | 19  
|Exhibit 32.1  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 - President & CFO                     | 20  
|Exhibit 32.2  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 - Senior Vice President               | 21  

-16-

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