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

                    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, 1997

                                       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, 1997,  7,007,402  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, 1997
                          and March 31, 1997 .......................   1

                      Condensed Statements of Income for the
                          three-month and nine-month periods ended
                          December 31, 1997 and 1996 ...............   2

                      Condensed Statements of Cash Flows
                          for the nine-month periods ended
                          December 31, 1997 and 1996 ..............    3

                      Notes to Condensed Financial Statements .....    4

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


        Part II.  Other Information ...............................    7

        Signatures ................................................    8

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

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                      Condensed Balance Sheets (Unaudited)
                      December 31, 1997 and March 31, 1997

                  ASSETS                      DECEMBER 31, 1997   MARCH 31, 1997
                  ------                      -----------------   --------------
CASH AND CASH EQUIVALENTS ......................   $    556,183    $    586,629
RECEIVABLES
    Mortgage loans and church bonds -
     performing ................................     18,960,914      19,177,849
    Interim construction loans - performing ....     10,993,182      12,133,111
    Nonearning mortgage loans, church bonds
     and interim construction loans ............      2,724,030       3,158,484
    Less: Allowance for possible credit losses .       (990,213)       (855,213)
                                                   ------------    ------------
                                                     31,687,913      33,614,231
                                                   ------------    ------------
    Accrued interest receivable ................        392,446         303,756
    Notes receivable ...........................        443,310         536,453
                                                   ------------    ------------
                  Total receivables ............     32,523,669      34,454,440

PROPERTY AND EQUIPMENT, net ....................        201,537         213,291
OTHER REAL ESTATE OWNED ........................      1,515,951         119,500
UNAMORTIZED DEBT EXPENSE, net and other assets .         84,398          81,892
                                                   ------------    ------------
TOTAL ASSETS ...................................   $ 34,881,738    $ 35,455,752
                                                   ============    ============
       LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
    Notes payable and line of credit:
      Related party ............................   $  1,646,982    $  1,648,660
      Other ....................................      3,058,685       4,397,216
                                                   ------------    ------------
                                                      4,705,667       6,045,876
                                                   ------------    ------------
    Secured savings certificates:
      Related party ............................        240,000         315,692
      Other ....................................      7,028,823       7,258,280
                                                   ------------    ------------
                                                      7,268,823       7,573,972
    Dividends payable ..........................      1,471,554            --
    Accrued interest payable ...................         31,805          45,211
    Other ......................................        711,364         555,574
                                                   ------------    ------------
                  Total liabilities ............     14,189,213      14,220,633
                                                   ------------    ------------
SHAREHOLDERS' EQUITY
    Shares of beneficial interest, no par value;
     authorized shares unlimited, 7,007,402
     shares issued and outstanding .............     20,623,866      20,623,866
    Undistributed net income ...................         68,659         611,253
                                                   ------------    ------------
                  Total shareholders' equity ...     20,692,525      21,235,119
                                                   ------------    ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .....   $ 34,881,738    $ 35,455,752
                                                   ============    ============

     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, 1997 and 1996

                                         THREE-MONTH           NINE-MONTH
                                        PERIODS ENDED         PERIODS ENDED
                                         DECEMBER 31,          DECEMBER 31,
                                       1997       1996       1997       1996
                                       ----       ----       ----       ----
INTEREST INCOME AND FEES
    Interest and fees on mortgage
      loans, church bonds, and
      interim construction loans . $  970,903 $  970,234 $2,856,876 $2,864,449
    Interest on temporary
       investments ...............     14,469     17,690     76,058     35,423
                                   ---------- ---------- ---------- ----------
          Total interest
           income and fees .......    985,372    987,924  2,932,934  2,899,872
                                   ---------- ---------- ---------- ----------
DEBT EXPENSE
    Interest .....................    227,823    226,567    690,359    704,644
    Amortization of:
       Registration cost .........       --        6,561      4,374     23,724
       Commissions paid to
        brokers ..................     14,171     14,334     43,766     44,059
                                   ---------- ---------- ---------- ----------
          Total debt expense .....    241,994    247,462    738,499    772,427
                                   ---------- ---------- ---------- ----------
          Net interest income ....    743,378    740,462  2,194,435  2,127,445
PROVISION FOR POSSIBLE
    CREDIT  LOSSES ...............     45,000     45,000    135,000     90,000
                                   ---------- ---------- ---------- ----------
          Net interest income
            less provision for
            possible credit
            losses ...............    698,378    695,462  2,059,435  2,037,445
OTHER INCOME .....................     42,747     17,603     81,658     22,728
OTHER OPERATING EXPENSES
    General and administrative ...    141,545    122,825    472,590    382,357
    Board of Trust Managers'
     fees ........................     10,704     10,120     35,176     30,902
                                   ---------- ---------- ---------- ----------
          Total other
           operating expenses ....    152,249    132,945    507,766    413,259
                                   ---------- ---------- ---------- ----------
          Income before provisions
              for taxes ..........    588,876    580,120  1,633,327  1,646,914
PROVISION FOR TAXES ..............       --         --        3,627       --
                                   ---------- ---------- ---------- ----------
          NET INCOME ............. $  588,876 $  580,120 $1,629,700 $1,646,914
                                   ========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING ........  7,007,402  7,007,402  7,007,402  7,007,402
                                   ========== ========== ========== ==========
NET INCOME PER SHARE ............. $      .08 $      .08 $      .23 $      .24
                                   ========== ========== ========== ==========
DIVIDENDS PER SHARE                $      .21       $.23      $ .31 $      .32
                                   ========== ========== ========== ==========

      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, 1997 and 1996

                                                        NINE-MONTH PERIODS
                                                        ENDED DECEMBER 31,
                                                       1997          1996
                                                       ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income ................................. $  1,629,700  $  1,646,914
    Adjustments to reconcile net income to net
       cash provided by operating activities:
          Depreciation .........................       11,754        11,756
          Amortization of debt expense .........       48,140        67,783
          Provision for possible credit losses .      135,000        90,000
          Amortization of loan discounts .......      (63,090)     (148,223)
          Changes in:
              Accrued interest receivable ......      (88,690)       30,436
              Accrued interest payable .........      (13,406)       (3,063)
              Federal income taxes payable .....         --          (7,060)
              Other liabilities ................      155,790       201,057
          Other, net ...........................      (17,123)      (29,355)
                                                 ------------  ------------
                  Net cash provided by operating
                   activities ..................    1,798,075     1,860,245
                                                 ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Investment in mortgage and interim
       construction loans and church bonds .....  (20,542,903)  (12,533,765)
    Payments received on mortgage and interim
       construction loans and church bonds .....   21,001,310    12,103,405
    Advances of notes receivable ...............     (212,471)     (385,983)
    Payments received on notes receivable ......      305,614       377,877
                                                 ------------  ------------
                  Net cash provided (used) by
                   investing activities ........      551,550      (438,466)
                                                 ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Sale of secured savings certificates (SSC) .    3,314,121     1,938,329
    Borrowings on notes payable ................    1,611,412     6,354,676
    Principal payments on:
       SSCs ....................................   (3,619,270)   (1,916,847)
       Notes payable ...........................   (2,951,621)   (6,536,295)
    Registration costs of SSCs .................         --          (7,732)
    Commissions paid to broker on issuance
       of SSCs .................................      (33,973)      (29,730)
    Cash dividends paid ........................     (700,740)     (630,666)
                                                 ------------  ------------
                  Net cash used by
                   financing activities ........   (2,380,071)     (828,265)
                                                 ------------  ------------

                  Increase (decrease) in cash
                   and cash equivalents ........      (30,446)      593,514
CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD ...........................      586,629       722,430
                                                 ------------  ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..... $    556,183  $  1,315,944
                                                 ============  ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid during the period for interest ... $    703,765  $    707,707
                                                 ============  ============

During  December 1997,  the Board of Trust  managers  declared cash dividends of
$1,471,554  ($.21 per share) payable in January 1998.  During December 1996, the
Board of Trust managers  declared cash dividends of $1,611,702  ($.23 per share)
payable in January 1997.

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

      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)

 (1)   GENERAL

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

       Real estate acquired  through,  or in lieu of, loan  foreclosure is to be
       sold  and is  initially  recorded  at  estimated  fair  value  at date of
       foreclosure establishing a new cost basis. Other real estate owned, after
       foreclosure, is carried at the lower of carrying amount or the property's
       estimated fair value minus estimated costs to sell (fair value). Declines
       in the  estimated  fair value  below cost are  recognized  as a valuation
       allowance.  If the estimated fair value subsequently  increases above its
       carrying value, the valuation  allowance is reduced,  but not below zero.
       Increases or decreases in the valuation allowance are charged or credited
       to operations.

       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.

       Certain   amounts  in  the  March  31,  1997  balance   sheet  have  been
       reclassified to conform with the September 30, 1997 presentation.

(2)    WEIGHTED AVERAGE INTEREST RATES

     Weighted  average  interest rates and net interest rate margins at December
     31, 1997 and 1996 were as follows:

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

              December 31, 1997       10.60%              7.42          3.18
              December 31, 1996       10.81               7.13          3.68


(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, 1997,  for the five  twelve-month
       periods subsequent to December 31, 1997, follow:

            Twelve-month period    Mortgage loans, church bonds
            ending December 31,         and interim loans           indebtedness
            -------------------         -----------------           ------------
                      1998                $13,749,245                  8,560,114
                      1999                  1,393,340                  2,085,376
                      2000                  1,294,383                  1,329,000
                      2001                  1,208,028                         -
                      2002                  1,055,990                         -
                                          ===========                  =========
                                      -4-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)

               Notes to Condensed Financial Statements (Unaudited)

(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  $2,724,030  and
       $3,650,338  at December 31, 1997 and 1996,  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
       $115,000 and $302,000 for the nine-month  periods ended December 31, 1997
       and  1996,  respectively.   Interest  actually  recognized  in  1997  was
       approximately $72,000.

                   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,
1997 as Compared to the  Three-Month  and Nine-Month  Periods Ended December 31,
1996:

                                    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 $985,372 for the  three-month  period ended December 31, 1997,  were
comparable  to  $987,924  for the  corresponding  period  in 1996.  The  Trust's
revenues  of  $2,932,934  for the  nine-month  period  ended  December  31, 1997
increased  slightly from $2,899,872 for the corresponding  period.  The weighted
average rate on mortgage  loans,  church bonds and interim loans at December 31,
1997 and 1996 was 10.60% and 10.81%, respectively.

                                  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, 1997 and 1996. Debt expense for the three-month  period ended
December 31, 1997 of $241,994 was comparable to the corresponding amount in 1996
of $247,462.  Debt expense of $738,499 for the nine-month  period ended December
31, 1997, was slightly less than the  corresponding  amount in 1996 of $772,427.
The weighted average interest rate on all indebtedness was 7.42% at December 31,
1997 as compared to 7.13% at December 31, 1996.

                            OTHER OPERATING EXPENSES

Other  operating  expenses were $152,249 for the three months ended December 31,
1997,  or  $19,304  more than the  comparable  period in 1996.  Other  operating
expenses were $507,766 for the  nine-months  ended December 31, 1997, or $94,507
more than the comparable  period in 1996.  These increases were primarily caused
by increased  legal and other fees incurred in the collection and foreclosure of
several nonearning loans.

                                NONEARNING ASSETS

During the three months ended  September 30, 1997,  the Trust  foreclosed on two
nonearning  loans  with  total  principal  balances  of  $1,049,498.   One  loan
constituted   approximately  $976,000  of  the  total  and  was  secured  by  an
assisted-living  center  located  in Sedona,  Arizona.  The Trust has leased the
property  to a third  party and has  recognized  approximately  $77,000 in other
income in the nine  months  ended  December  31,  1997  from the  rental of such
property.  During the three months ended December 31, 1997, the Trust foreclosed
on an interim loan with a carrying value of $346,503. The recorded loan balances
of all of  these  loans  approximated  fair  value of the  securing  properties.
Presently, the Trust is actively seeking disposition of the properties.

Nonearning  loans  of  $2,724,030  at  December  31,  1997  included  a loan for
approximately  $751,000  that was  delinquent  and placed on  nonearning  status
during the three months ended December 31, 1997.

                                      -6-
<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

                                      -7-
<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 11, 1998                         BY:/s/ B.R. McMorries
                                                   -----------------------------
                                                   B.R. McMorries,
                                                   Chairman of the Board of
                                                   Trust Managers


DATE: February 11, 1998                         BY:/s/ Kelly Archer
                                                   -----------------------------
                                                   Kelly Archer
                                                   Chief Financial Officer





                                      - 8 -