United States
Securities and Exchange CommissionWashington, D.C. 20549____________FORM 10-Q x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2007  £ TRANSITION REPORT UNDER SECTION 13 OR 15[d] OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ .  Commission File No. 0-8117____________CHURCH LOANS & INVESTMENTS TRUST®(Exact name of registrant as specified in its charter)Texas75-6030254(State or other jurisdiction of
incorporation or organization)(IRS Employer
Identification No.)5305 W Interstate 40, Amarillo, Texas79106-4759(Address of principal executive office)(Zip Code)(806) 358-3666(Issuers telephone number including area code)Not Applicable(Former name, former address and former fiscal year, if changed since last report)____________Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  £Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer  £Accelerated filer  £Non-accelerated filer £Smaller reporting company xIndicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes £  No xClassOutstanding at February 14, 2008Shares of beneficial interest,
$0.00 par value per share10,217,094    CHURCH LOANS & INVESTMENTS TRUST
FORM 10-Q
For the Quarter Ended December 31, 2007INDEXPagePart I.Financial InformationItem 1.Financial Statements:a)Condensed Balance Sheets (Unaudited) December 31, 2007 and
March 31, 20071b)Condensed Statements of Income (Unaudited) for the three-month and nine-month periods ended December 31, 2007 and 20062c)Condensed Statements of Cash Flows (Unaudited) for the nine-month periods ended December 31, 2007 and 20063d)Notes to Condensed Financial Statements (Unaudited)4Item 2.Managements Discussion and Analysis or Plan of Operation6Item 3.Quantitative and Qualitative Disclosures About Market Risk15Item 4.Controls and Procedures15Part II.Other InformationItem 1.Legal Proceedings16Item 2.Unregistered Sales of Equity Securities and Use of Proceeds16Item 3.Defaults Upon Senior Securities16Item 4.Submission of Matters to a Vote of Security Holders16Item 5.Other Information16Item 6.Exhibits16Index to Exhibits17Signatures18        PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCHURCH LOANS & INVESTMENTS TRUST(A Real Estate Investment Trust)Condensed Balance Sheets (Unaudited)December 31, 2007 and March 31, 2007ASSETSDecember 31,
2007March 31,
2007CASH AND CASH EQUIVALENTS$-$95,412RECEIVABLESMortgage loans and church bonds  performing49,688,73050,487,544Interim construction loans  performing16,103,85018,471,378Nonperforming mortgage loans, church bonds and interim construction loans5,947,8755,996,112Less: Allowance for credit losses(1,786,477)(1,713,249)69,953,97873,241,785Accrued interest receivable608,734514,175Notes receivable2,0003,000Net receivables70,564,71273,758,960PROPERTY AND EQUIPMENT,net217,512219,060OTHER REAL ESTATE OWNED1,735,6502,252,095OTHER ASSETS60,69638,528TOTAL ASSETS$72,578,570$76,364,055LIABILITIES AND SHAREHOLDERS EQUITYLIABILITIESNotes payable and line of credit:Related parties$5,026,247$4,718,106Other32,824,54438,891,86337,850,79143,609,969Overdraft payable226,806-Accrued interest payable85,886122,248Dividends payable2,554,274-Other1,426,1501,548,678Total liabilities42,143,90745,280,895SHAREHOLDERS EQUITYShares of beneficial interest, no par value; authorized shares unlimited, 10,223,690 shares issued29,762,29129,762,291Undistributed net income688,8621,337,359Treasury shares, at cost (6,596 shares)(16,490)(16,490)Total shareholders equity30,434,66331,083,160TOTAL LIABILITIES AND SHAREHOLDERS EQUITY$72,578,570$76,364,055These 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, 2007 and 2006Three-month periods ended
December 31,Nine-month periods ended
December 31,2007200620072006INTEREST INCOME AND FEES$1,871,697$1,622,839$5,588,684$4,690,813INTEREST EXPENSE682,180713,4642,261,3642,038,374Net interest income1,189,517909,3753,327,3202,652,439PROVISION FOR CREDIT LOSSES--125,000-Net interest income less provision for possible credit losses1,189,517909,3753,202,3202,652,439OTHER INCOME12,773105,156548,576149,091OTHER OPERATING EXPENSESGeneral and administrative262,659263,9241,197,693810,972Board of Trust Managers fees11,60012,50034,40037,700Total other operating expenses274,259276,4241,232,093848,672NET INCOME$928,031$738,107$2,518,803$1,952,858WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING10,217,09410,217,09410,217,09410,217,094NET INCOME PER SHARE$.09$.07$.25$.19DIVIDENDS PER SHARE$.25$.18$.31$.25These 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, 2007 and 2006Nine-month periods ended
December 31,20072006CASH FLOWS FROM OPERATING ACTIVITIESNet income$2,518,803$1,952,858Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation1,5481,548Loss (gain) on sale of other real estate owned(508,555)13,317Amortization of loan discounts(25,444)(12,963)Provision for credit losses125,000-Changes in:Accrued interest receivable(94,559)31,948Accrued interest payable(36,362)12,102Other liabilities(122,528)169,431Other, net(22,168)(17,417)Net cash provided by operating activities1,835,7352,150,824CASH FLOWS FROM INVESTING ACTIVITIESInvestment in mortgage and interim construction loans and
church bonds(26,732,283)(25,513,409)Payments received on mortgage and interim construction loans and
church bonds29,920,53418,194,148Payments received on notes receivable1,0001,902Proceeds from sale of other real estate owned1,025,000250,607Net cash provided (used) by investing activities4,214,251(7,066,752)CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on notes payable and line of credit31,511,01829,891,043Principal payments on notes payable and line of credit(37,270,196)(24,130,165)Overdraft payable226,806-Cash dividends(613,026)(715,196)Net cash provided (used) by financing activities(6,145,398)5,045,682Increase (decrease) in cash and cash equivalents(95,412)129,754CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD95,412128,955CASH AND CASH EQUIVALENTS AT END OF PERIOD$-$258,709Supplemental disclosure of cash flow informationCash paid during the period for interest$2,297,726$2,026,272Dividends declared, not paid$2,554,274$1,893,077These condensed financial statements should be read only in connection
with the accompanying notes to condensed financial statements.  -3-     CHURCH LOANS & INVESTMENTS TRUST (A Real Estate Investment Trust) Notes to Condensed Financial Statements (Unaudited)   NOTE 1  GENERAL  See Summary of Significant Accounting Policies in the Trusts Annual Report on Form 10-K for a summary of the Trusts significant accounting policies.  The unaudited condensed financial statements included herein were prepared from the books of the Trust in accordance with generally accepted accounting principles and reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results of operations and financial position for the interim periods. Such financial statements generally conform to the presentation reflected in the Trusts Annual Report to Shareholders. The current interim period reported herein is included in the fiscal year subject to independent audit at the end of that year and is not necessarily an indication of the expected results for the fiscal year.  NOTE 2 - WEIGHTED AVERAGE INTEREST RATES  Weighted average interest rates and net interest rate margins at December 31, 2007 and 2006, were as follows:  Mortgage loan and
church bond portfolioTotal
indebtednessNet interest rate
marginDecember 31, 20078.51%6.35%2.16%December 31, 20068.35%6.98%1.37%  NOTE 3 - CONTRACTUAL MATURITIES Scheduled principal payments on mortgage loans, church bonds and interim construction loans and indebtedness (including notes payable) outstanding at December 31, 2007, for the five twelve-month periods subsequent to December 31, 2007, follow:  Twelve-month period ending
December 31,Mortgage loans, church bonds
and interim loansTotal
Indebtedness2008$ 19,850,129$ 37,850,79120092,525,423-20102,670,484-20112,811,271-20122,511,673-  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 $5,947,875 and $7,369,163 at December 31, 2007 and 2006, 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 $346,000 and $492,000 for the nine-month periods ended December 31, 2007 and 2006, respectively. Interest income actually recognized on such loans during 2007 and 2006 was approximately $128,000 and $220,000, respectively.   -4-   NOTE 5  LEGAL CONTINGENCIES   Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Trust's financial statements.                                               This information is an integral part of the accompanying condensed financial statements.  -5-     Item 2.  Managements Discussion and Analysis or Plan of Operation.  FORWARD-LOOKING STATEMENTS DISCLOSURE  The following 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 in this discussion 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.  The 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:  Competition in the business of making loans to churches;A decline in general economic conditions;A decline in real estate values affecting the value of the collateral securing our loans;A rise in interest rates resulting in higher cost of funds to us prior to the re-pricing of the loans owing to us;Our inability to borrow funds and at reasonable rates of interest;General risks of lending;Change in federal or state laws affecting our 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 in this report.  Critical Accounting Policies  Our accounting and reporting policies are in accordance with accounting principles generally accepted in the United States of America.  Our significant accounting policies are described in the notes to the financial statements.  Certain accounting policies require management to make significant estimates and assumptions, which have a material impact on the carrying value of certain assets and liabilities, and we consider these to be critical accounting policies.  The estimates and assumptions used are based on historical experience, as well as other factors, which management believes to be reasonable under the circumstances.  Actual results could differ significantly from these estimates and assumptions, which could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and results of operations for the reporting periods.  We believe that the following critical accounting policies require the most significant estimates and assumptions that are particularly susceptible to a significant change in the preparation of our financial statements.  Revenue Recognition.  We accrue interest income as it is earned.  All past due loans are reviewed monthly by management and the Audit Committee.  A past due loan is evaluated based upon the payment history, opinion of the ultimate collectibility of the principal and interest and other experience factors.  The accrual of interest is generally discontinued on loans and church bonds more than 60 days past due unless the credit is well secured and in process of collection.  In all cases, loans and bonds are placed on nonaccrual or charged-off at an earlier date, if collection of principal or interest is considered doubtful.  Once a loan is placed on non-accrual, the loan will be classified as either cash basis or capital recovery.  A loan is typically classified as cash basis if the Audit Committee believes, based upon several factors, that there is a strong likelihood that the principal of the loan will be recovered, but is concerned that all of the interest will be recovered.  If a loan is classified as cash basis, then interest payments received will be applied to interest income.  A loan is typically classified as capital recovery if the Audit Committee believes, based upon several factors, that there is a strong likelihood that we may not be able to recover all of the principal balance of the loan.  In the event that a loan is classified as capital recovery, then payments received are applied to principal first and then to interest.  The actual decision to place a loan on non-accrual and the classification of the loan as either cash basis or capital recovery is made by the Audit Committee with input from management.  Non-accrual status loans are returned to an accrual status when in the opinion of the Audit Committee, based upon input from management, that such is warranted based upon the passing of a sufficient time period during which the principal and interest have become current and remain current and, therefore, the loan, both principal and interest, is  -6-   anticipated to be fully collectible.  Allowance for Credit Loss.  The Audit Committee reviews the allowance for credit loss at the end of each quarter.  The provision for losses is based on an amount that is adequate, in the opinion of the Audit Committee, based upon input from management, to absorb losses inherent in the existing portfolio.  The evaluation, which includes a review of all loans on which full collection may not be reasonably assumed, considers among other factors, general economic conditions, the fair market value or estimated net realizable value of the underlying collateral securing the loan, past experience, trends in loan delinquency and other factors that warrant recognition in providing for an adequate allowance to absorb inherent losses.  The evaluation by the Audit Committee includes a review of a quarterly grading methodology performed by management on all past-due loans.  The Audit Committee, based upon its evaluation and review, then makes a recommendation to the full Board of Trust Managers as to the recommended amount of the credit loss reserve.  The Board of Trust Managers, based upon the recommendation of the Audit Committee, establishes the amount of the allowance for credit loss and any adjustments to such allowance.  Other Real Estate Owned.  Other real estate owned (OREO) represents property acquired as a result of a foreclosure of a mortgage note(s) held by the Trust.  OREO is recorded at estimated fair value less the cost to sell at date of foreclosure, establishing a new cost basis.  After foreclosure, OREO is carried at the lower of the carrying amount or estimated fair value minus estimated cost to sell.  Impairment losses are charged to operations.  Costs of the foreclosure, insurance and other costs associated with carrying the property are expensed.  Management has discussed our critical accounting policies and the development, selection and disclosure of the estimates and alternatives with the Audit Committee of the Board of Trust Managers and obtained their approval of the applicable disclosures contained in this report.  Overview  We were founded in May of 1959. We were organized to assist churches with the financing of purchases and construction of church facilities.  We have also made loans for the financing of assisted living centers.  Although we were originally organized under the corporate structure, we reorganized in 1963 as a real estate investment trust in order to take advantage of the favorable provisions of the federal tax law applicable to real estate investment trusts.  Our loan portfolio consists primarily of loans to churches and is comprised of both permanent loans and interim construction loans.  Although, we have purchased existing loans from other lenders, our primary operating strategy is to originate, either through mortgage loan brokers, church bond broker-dealers or directly to churches, mortgage loans secured by a first mortgage against a churchs buildings and related facilities.  We rarely, if ever, sell a loan and, therefore, we intend to hold our loan portfolio to maturity.  Our underwriting standards normally include compiled, reviewed or audited financial statements depending on the size of the loan, a fair market value appraisal prepared by an independent appraiser, a first mortgage on the property of the church insured by a title insurance policy issued by a national title company, applicable fire and extended casualty insurance on the collateral and such other requirements as determined by management on a case by case basis.  Also, as part of our due diligence, management normally makes, prior to funding, an onsite inspection of the property that is to secure the loan.  Originally, our Declaration of Trust required a loan-to-value ratio of not greater than 66 2/3%.  However, at our annual meeting of shareholders held on July 16, 2004, the shareholders approved an Amended and Restated Declaration of Trust and Bylaws that raised the loan-to-value ratio to 85% unless substantial justification exists because of the presence of other underwriting criteria.  Most of our present loans were made based upon the prior 66 2/3% loan-to-value ratio.  Management continues to pursue quality new loans, both interim and permanent.  Results of OperationsNine-month period ended December 31, 2007 as compared to nine-month period ended December 31, 2006  Our revenues are derived from interest income and fees earned on loans as well as, to a lesser degree, interest earned on church bonds and short-term investments.  During the nine-month period ended December 31, 2007, interest income and fees increased by $897,871 (19%) over the nine-month period ended December 31, 2006.  The increase in interest income and fees for the nine-month period ended December 31, 2007 as compared to the nine-month period ended December 31, 2006 was primarily attributable to an increase in the loan portfolio during a majority of this period, an increase in the weighted average interest rate on our portfolio of loans and the recognition in income of deferred interest and deferred commitment fees from several loans that were paid in full during the period.  -7-    The components of our interest income and fees during the nine-month period ended December 31, 2007 as compared to the nine-month period ended December 31, 2006 is as follows:  Table 1  Interest Income and Fees  For the Nine Months
Ended 12/31/07For the Nine Months
Ended 12/31/06Increase
(Decrease)Interest income:Mortgage loans$3,343,327$2,558,499$784,828Interim loans1,505,6141,563,442(57,828)Commitment fees635,681468,422167,259Other income and fees104,062100,4503,612Total$5,588,684$4,690,813$897,871  The increase in total interest income on mortgage loans and interim loans represents an increase of 18%.  The following table compares our portfolio of loans, net of mortgage discounts, as of December 31, 2007 to December 31, 2006:  Table 2  Mortgage Loans, Church Bonds and Interim Loans as of December 31, 2007 and 2006  Type of Loan12/31/0712/31/06Increase
(Decrease)Total Mortgage and church bonds$54,536,605$50,402,959$ 4,133,646Performing mortgage and church bonds49,688,73045,873,7963,814,934Total Interim loans17,203,85027,992,714(10,788,864)Performing interim loans16,103,85025,152,714(9,048,864)Total loan portfolio71,740,45578,395,673(6,655,218)Total performing loan portfolio65,792,58071,026,510(5,233,930)  Although, the amount of our mortgage loans, church bonds and interim loans decreased as of December 31, 2007 as compared to December 31, 2006, most of that decrease occurred during the three-month period ended December 31, 2007.  As of September 30, 2007, total mortgage loans, church bonds and interim loans were $78,164,491 as compared to $71,740,455 as of December 31, 2007, a decrease of $6,424,036.  Most of this is the result of a decrease in the amount of interim loans.  Interim loans decreased from $21,861,429 as of September 30, 2007 to $17,203,850 as of December 31, 2007, a decrease of $4,657,579.  Mortgage loans exclusive of church bonds and before purchase discounts decreased from $57,245,714 to $55,472,688 during this same period.  Most of this decrease in mortgage loans actually occurred during the month of December 2007 as a result of the payoffs of several mortgage loans.  Mortgage loans as of November 31, 2007 were $57,162,901 as compared to $55,472,688 as of December 31, 2007, a decrease of $1,690,213.  Therefore, although the total amount of mortgage loans, church bonds and interim loans decreased as of December 31, 2007 as compared to December 31, 2006, for most of the nine-month period ended December 31, 2007, the amount of our loan portfolio was at levels actually higher than during the nine-month period ended December 31, 2006.  This increase resulted in the increase in interest income and fees for the period ended December 31, 2007.  In fact, the average amount of the portfolio by each month during the period ended December 31, 2007 was $76,085,683 as compared to $72,520,268 for each month during the period ended December 31, 2006.  See Table 3 below.  -8-   Table 3  Month-End Portfolio Values  Month20072006DifferenceApril$76,633,365$71,229,693$5,403,672May74,402,36270,033,1314,369,231June77,318,59670,085,3157,233,281July77,050,25873,924,7393,125,519August78,632,09272,284,8786,347,214September78,164,49170,099,1278,065,364October76,550,78669,749,0276,801,759November74,278,74676,880,831(2,602,085)December71,740,45578,395,673(6,655,218)Monthly Average:$76,085,683$72,520,268$3,565,415  The weighted average interest rate on our loans and church bonds increased from 8.35% as of December 31, 2006 to 8.51% as of December 31, 2007.  Included in interest income and fees for the nine-month period ended December 31, 2007 was $255,068 in deferred interest and deferred commitment fees resulting from 7 loan payoffs as well as the favorable resolution of certain litigation involving a loan commitment.  Commitment fees earned during the nine-month period ended December 31, 2007 were $635,681 as compared to $468,422 for the nine-month period ended December 31, 2006, an increase of $167,259 or 36%. Included in the commitment fees for the nine-month period ended December 31, 2007 are the deferred commitment fees referred to above.  Net income for the nine-month period ended December 31, 2007 was $2,518,803 ($.25 per share), an increase of $565,945 (29%) as compared to the nine-month period ended December 31, 2006.  This increase was primarily attributable to the increase in net interest income and to an increase in other income.  Net interest income increased from $2,652,439 for the nine-month period ended December 31, 2006 to $3,327,320 for the nine-month period ended December 31, 2007, an increase of $674,881 (25%).  This increase in our net interest income for the nine-month period ended December 31, 2007 as compared to the nine-month period ended December 31, 2006 was primarily the result of an increase in our interest income and fees.  Our total liabilities decreased from $48,304,871 as of December 31, 2006 to $42,143,907 as of December 31, 2007.  Furthermore, the weighted average interest rate on our debt decreased from 6.98% as of December 31, 2006 to 6.35% as of December 31, 2007.  However, our interest expense increased from $2,038,374 for the nine-month period ended December 31, 2006 to $2,261,364 for the nine-month period ended December 31, 2007, an increase of $222,990 or 11%.  This increase in our interest expense is attributable a higher weighted average interest rates on our debt and higher liabilities during most of the nine-month period ended December 31, 2007 as compared to the same period ended December 31, 2006.  Although interest rates during the three-month period ended as of December 31, 2007 have decreased as compared to the three-month period ended as of December 31, 2006, interest rates during the six-month period ended September 30, 2007 increased as compared to the six-month period ended September 30, 2006.  The following table sets forth the weighted average interest rates on our debt for each month during the nine-month period ended December 31, 2007 as compared to same period ending December 31, 2006:  -9-     Table 4 - Weighted Average Interest Rates on All Debt For Each Month in the Nine-Month Period Ended December 31, 2007 and December 31, 2006  Month20072006DifferenceApril6.966.64.32May6.966.64.32June6.966.75.21July6.966.73.23August6.966.75.21September7.136.96.17October6.606.96(.36)November6.276.96(.69)December6.356.98(.63)  As evidenced above, the weighted average interest rate on our debt was actually higher during most of the nine-month period ended December 31, 2007 as compared to the nine-month period ended December 31, 2006.  Furthermore, although our liabilities as of December 31, 2007 are less than as of December 31, 2006, during most of the nine-month period ended December 31, 2007, our liabilities were greater than most of the nine-month period ended December 31, 2006.   The following table illustrates the average month end liabilities for the nine-month period ended December 31, 2007 as compared to the same period ended December 31, 2006:  Table 5 - Month End Total Liabilities for Each Month in the Nine-Month Period Ended December 31, 2007 and December 31, 2006  Month20072006DifferenceApril$47,284,800$40,992,486$6,292,314May44,867,39239,568,4095,298,983June47,709,10139,765,9517,943,150July47,063,26542,868,3884,194,877August48,301,38440,972,4737,328,911September47,651,21438,752,8348,898,380October44,946,86338,084,2386,862,625November42,493,99345,957,216(3,463,223)December42,143,90748,304,871(6,160,694)Monthly Average:$45,829,102$41,696,318$4,132,784  Non-performing loans, church bonds and interim loans decreased from $7,369,163 as of December 31, 2006 to $5,947,875 as of December 31, 2007, a decrease of $1,421,288.  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 would have been increased by approximately $346,000 and $492,000 for the nine-month periods ended December 31, 2007 and 2006, respectively.  Interest income actually recognized on such loans during 2007 and 2006 was approximately $128,000 and $220,000, respectively.  General and administrative expenses increased from $810,972 for the nine-month period ended December 31, 2006 to $1,197,693 for the nine-month period ended December 31, 2007, an increase of $386,721 or 48%.  This increase in general and administrative expenses is primarily attributable to the payment of insurance, property taxes, attorneys fees and other expenses relating to property held as a result of the foreclosure of defaulted loans.  Other income increased from $149,091 for the nine-month period ended December 31, 2006 to $548,576 for the nine-month period ended December 31, 2007, an increase of $399,485.  Contributing to this increase is the recognition of gain of $508,555 from the sale of property located in Bronx, NY that was obtained through foreclosure of a defaulted loan.  Also decreasing net income was the $125,000 additional provision for credit losses made during the nine-month period ended December 31, 2007.  Pursuant to the Audit Committees quarterly review of the credit loss reserve, the Audit Committee recommended and the Board of Trust Managers accepted an additional allocation of $125,000 to our  -10-   provision for credit losses effective for the nine-month period ended December 31, 2007.  This action was necessary in order to provide adequately for losses on two defaulted loans in which we owned participating interests.  As of December 31, 2007, 10,217,094 shares of certificates of beneficial interest were outstanding. Net income per share increased from $.19 per share for the nine-month period ended December 31, 2006 as compared to $.25 per share for the nine-month period ended December 31, 2007.  This increase was attributable to the increase in our net income discussed above.  Results of OperationsThree-month period ended December 31, 2007 as compared to three-month period ended December 31, 2006.  During the three-month period ended December 31, 2007, interest income and fees increased by $248,858 (15%) as compared to the three-month period ended December 31, 2006.  This increase was attributable to an increase in interest income from mortgage loans and an increase in commitment fees.  Interest income from mortgage loans increased from $877,624 for the three-month period ended December 31, 2006 to $1,128,741 for the three-month period ended December 31, 2007.  This increase was offset by a decrease in interest income from interim loans of $95,230 for the three-month period ended December 31, 2007 as compared to the same period ended December 31, 2006.  Contributing to the increase in interest income on our loan portfolio was the 16 basis point increase in the weighted average interest rates on our loan portfolio as of December 31, 2007 as compared to December 31, 2006.  Commitment fee income increased from $158,918 for the three-month period ended December 31, 2006 to $238,170 for the three-month period ended December 31, 2007.  This is an increase of $79,252 or 50%.  Included in commitment fee income for the three-month period ended December 31, 2007 is the recognition in income of deferred commitment fees of $94,945 from three loans that were paid off in full during this period.  Net interest income and net income for the three-month period ended December 31, 2007 as compared to the three-month period ended December 31, 2006 was as follows:  Table 6  Net Interest Income and Net Income for the Three-Month Period Ended December 31, 2007 and 2006  For the Three Months Ended 12/31/07For the Three Months Ended 12/31/06Increase (Decrease)Net Interest Income$     1,189,517$     909,375$ 280,142Net Income928,031738,107189,924   Net income for the three-month period ended December 31, 2007 was $.09 per share as compared to $.07 per share for the three-month period ended December 31, 2006.  This increase in net income is primarily the result of the increase in net interest income.    The increase in net interest income was primarily attributable to the increase in interest income and fees and to a decrease in interest expense.  Interest expense decreased from $713,464 for the three-month period ended December 31, 2006 to $682,180 for the three-month period ended December 31, 2007, a decrease of $31,284 or 4%.  The decrease in our interest expense is attributable to the decrease in the weighted average interest rate on our debt (see Table 4) and the decrease in the amount of our interest bearing liabilities during most of this period (see Table 5).  The average monthly liabilities for the three-month period ended December 31, 2007 was $43,194,921 as compared to $44,115,442 for the same period ended December 31, 2006.  General and administrative expenses decreased slightly from $263,924 for the three-month period ended December 31, 2006 to $262,659 for the three-month period ended December 31, 2007.  -11-    Financial Condition  December 31, 2007 as compared to March 31, 2007  Our portfolio of loans as of December 31, 2007 as compared to March 31, 2007 is summarized as follows:  Table 7  Mortgage Loans, Church Bonds and Interim Loans as of December 31, 2007 as Compared to March 31, 2007  Type of Loan12/31/073/31/07Increase
(Decrease)Performing mortgage and church bonds49,688,73050,487,544(798,814)Performing interim loans16,103,85018,471,378(2,367,528)Total loan portfolio71,740,45574,955,034(3,214,579)Total performing loan portfolio65,792,58068,958,922(3,166,342)  Consistent with the decrease in total mortgage loans, interim loans, and church bonds, total assets decreased from $76,364,055 as of March 31, 2007 to $72,578,570 as of December 31, 2007, a decrease of $3,785,485 (5%).  Nonperforming mortgage loans, church bonds and interim loans decreased from $5,996,112 as of March 31, 2007 to $5,947,875 as of December 31, 2007.  Management believes that there is sufficient collateral securing our non-performing loans such that management does not reasonably expect to realize a loss on such loans that has not been adequately reserved for in our allowance for credit losses.  Management and the audit committee will continue to monitor these loans and, if necessary, will recommend to the Board of Trust Managers that additional allowances be made.  Our liabilities decreased from $45,280,895 as of March 31, 2007 to $42,143,907 as of December 31, 2007, a decrease of 7%.  Shareholders equity decreased by $648,497 from March 31, 2007 to December 31, 2007.  A dividend was declared at the December 2007 meeting of the Board of Trust Managers for shareholders of record as of December 31, 2007.  This dividend was $.25 per share or $2,554,274 and is reported as a liability at December 31, 2007.  In order to maintain our status as a real estate investment trust under the applicable provisions of the Internal Revenue Code, among other things, we are required to distribute at least 90% of our taxable income to our shareholders through dividends each year.  Furthermore, we are required to pay dividends of at least 85% of our calendar year undistributed taxable income by February 1 or be subject to a special federal excise tax of 4% of the undistributed amount.  Therefore, the dividend declared in December 2007 of $2,554,274 slightly exceeded our net income as reflected in the Condensed Statements of Income (Unaudited) for the nine-month period ended December 31, 2007.  However, this dividend represents 90.58% of our taxable net income for the calendar year ended December 31, 2007.  Assuming normal operating results for the last quarter of our fiscal year, the total dividends for the fiscal year ending March 31, 2008 may exceed the net income reported in our Condensed Statements of Income for such period.  Estimated net taxable income for the nine-month period ended December 31, 2007 was $2,820,031 as compared to net book income of $2,518,803 for the same period, a difference of $301,228.  This difference resulted from the payment in full during this period of three loans for which specific allocations to bad debt expense for income tax purposes had been made in prior periods.  The additional taxable income recognized by these pay offs was somewhat offset by an additional allocation to bad debt expense for income tax purposes during the nine-month period ended December 31, 2007 in regard to two other loans that are in default and for which the properties securing the loans have been sold.  -12-     Liquidity and Capital Resources  Liquidity is a measurement of our ability to meet potential cash requirements, including the repayment of borrowings by us, fund loan commitments, maintain investments and meet our general business expenses and needs.  Additionally, to maintain our status as a REIT under the Internal Revenue Code, we must distribute annually at least 90% of our REIT taxable income.  We are engaged primarily in the business of making permanent and interim loans to churches and other non-profit organizations, and to other borrowers, including businesses engaged in the building and operation of assisted living centers.  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 relate 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.  Our primary sources of funds for liquidity consist of cash reserves, net cash provided by operations, payments received from the loans comprising our loan portfolio, and funds available through debt financing, including our line of credit agreement with the Amarillo National Bank.  Our level of liquidity based upon cash and cash equivalents decreased by $95,412 during the nine-month period ended December 31, 2007 leaving us with cash and cash equivalents of $0 as of December 31, 2007.  During this same period, we invested $26,732,283 in mortgage and interim construction loans using available cash of $95,412, net cash provided by operating activities in the amount of $1,835,735, principal payments received on our loan portfolio and other notes receivable in the amount of $29,920,534, payments received on notes receivable in the amount of $1,000, and proceeds received from the sale of other real estate of approximately $1,025,000.  The total liquidity available to invest in mortgage and interim construction loans was reduced by net borrowings on our bank line of credit and Master Note agreements in the amount of $5,759,178, an overdraft payable of $226,806 and by $613,026 paid in cash dividends during the nine-month period ended December 31, 2007.  A substantial portion of our debt obligations outstanding as of December 31, 2007, will mature in 2008.   These debt obligations primarily consist of our bank line of credit and Master Note Agreements.  The line of credit is made pursuant to a Loan Agreement dated January 31, 2006 that provides for a line of credit up to $35,000,000, and is for a term of three years, maturing December 31, 2008.  As of December 31, 2007, our total obligations outstanding were $42,143,907.  The amount owing on the line of credit as of December 31, 2007 was $14,938,000.  It is anticipated that the line of credit will be renewed at the expiration of its three year term.  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 a pool of our real estate lien notes which would be pledged to secure the remaining balance of the bank line of credit.  At December 31, 2007, loans to us under Master Note Agreements, which are in effect unsecured demand notes, totaled $22,912,791.  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.  Although our cash and cash equivalents as of December 31, 2007 were $0, the balance which could be borrowed by us upon our bank line of credit was $20,062,000.  The principal payments scheduled to be received on our loan portfolio for the twelve-month period ending December 31, 2008 are $19,850,129.  Assuming all of these scheduled principal payments are received, these payments, together with the balance available to us on our bank line of credit, will be slightly less than our total maturing liabilities during this time period.  Therefore, it may be necessary to borrow additional funds to pay our obligations and fund loan commitments.  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  -13-   our mortgage loan portfolio in order to meet all of our financial obligations.  At December 31, 2007, the principal balance of our loan and church bond portfolio was $71,740,455, net of unamortized purchase discounts.  The weighted average interest rate on loans and church bonds was 8.51% 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 $50,875,942, $43,607,950, and $38,150,706 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, if not used to fund new loan commitments, would be used to reduce our outstanding indebtedness.  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.  Pursuant to the January 31, 2006 agreement with the bank, we have pledged all of our mortgage loans, church bonds and interim construction loans to the bank to secure the line of credit.  The amount owing on the line of credit must not exceed an amount equal to 85% of the outstanding principal amount of the performing mortgage loans and church bonds and 50% of the outstanding principal amount of the performing interim construction loans.  Applying that borrowing limit to our loan portfolio as of December 31, 2007, we can borrow up to the entire $35,000,000 line of credit limit.  However, during the term of the new loan agreement, we would not have the right to sell our loans, without the banks consent, since all of our loans have been pledged to the bank to secure the line of credit.  Therefore, under our new loan agreement, it will be very difficult, if not impossible, to sell our loans to meet our financial obligations.  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.  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, 2007, the weighted average interest rate on our mortgage loan and church bond portfolio was 8.51% per annum while the weighted average interest rate upon all our borrowings was 6.35% 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 rate of interest charged by major banking institutions and, therefore, is subject to fluctuation.  Until recently, interest rates were rising and, therefore, we were experiencing a gradual re-pricing of our mortgage loans.  This re-pricing together with the decrease in our cost of funds during the three-month period ended December 31, 2007 has resulted in an increase in the spread between the weighted average interest rate on our mortgage loans and church bond portfolio and the weighted average interest rate upon our debt from 1.37% as of December 31, 2006 to 2.16% as of December 31, 2007.   -14-   The following table illustrates the spread between the weighted average interest rates on our portfolio of loans (Interest Income) and the weighted average interest rates on our debt (Interest Cost) on a monthly basis:  Table 8- Interest Rate Spread  MonthInterest IncomeInterest CostSpreadApril8.316.961.35May8.376.961.41June8.456.961.49July8.496.961.53August8.576.961.61September8.577.131.44October8.516.601.91November8.546.272.27December8.516.352.16  Our interim loans re-price daily and are not subject to a variable interest rate margin.  During periods of inflation, the 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, interest income should subsequently increase as variable rate loans reprice.  Should the amount of our loans and the amount of our notes payable and line of credit remain constant, and should the weighted average interest rate upon the indebtedness increase to approximately 15.51% per annum, our interest income and interest expense would be substantially equal.  Under the terms of the line of credit agreement with Amarillo National Bank effective January 1, 2006, the interest rate on our line of credit adjusts, at our option, in accordance with the 30-day, 60-day, 90-day or 180-day London Interbank Offered Rates (LIBOR) or the J.P. Morgan Chase & Co. prime rate.  The interest rate on our Master Note Agreements adjusts monthly as and when the Prime Rate as published by the Wall Street Journal changes.  Most of our loans are made on interest rates that are tied to the Prime Rate as published by the Wall Street Journal or a similar index used by major U.S. banking institutions.  Therefore, our cost of funds should be tied to an index that is equal to or less than the index used to price our loan portfolio.  Our Master Note Agreements continue to be tied to the Wall Street Journal Prime Rate of interest.  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. Quantitative and Qualitative Disclosures About Market Risk.  Not applicable    Item 4. Controls and Procedures  Our Chief Executive Officer and our Chief Financial Officer are charged with making an evaluation of our 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.  Our Chief Executive Officer and Chief Financial Officer have concluded, based upon their evaluation of these controls and procedures as of December 31, 2007, that our disclosure controls and procedures are effective.   -15-   There have been no significant changes in our internal controls or in the other factors that could significantly affect these controls subsequent to the date of their evaluation.   Part II. Other Information   Item 1.  Legal Proceedings.  None    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.  None    Item 3.  Defaults Upon Senior Securities.  None    Item 4. Submission of Matters to a Vote of Security Holders.  None   Item 5. Other Information.  None    Item 6. Exhibits  The Exhibits listed on the accompanying Index to Exhibits are filed as a part of this Quarterly Report.  -16-     CHURCH LOANS & INVESTMENTS TRUST
(A Real Estate Investment Trust)
INDEX TO EXHIBITS
Item 6(2)None(3)Amended and Restated Declaration of Trust dated July 16, 2004, previously filed as an exhibit to the Trusts Definitive Proxy Statement, Form DEF 14A, dated June 25, 2004 (File No. 000-08117) and is incorporated by reference.Amended and Restated Bylaws dated July 16, 2004, previously filed as an exhibit to the Trusts Definitive Proxy Statement, Form DEF 14A, dated June 25, 2004 (File No. 000-08117) and is incorporated by reference.(4)None other than those listed in (3) above.(10)Loan Agreement dated January 31, 2006 entered into by and between Church Loans & Investments Trust and Amarillo National Bank included as an exhibit to Issuers Form 10-QSB for the quarterly period ended December 31, 2005, under File No. 000-08117 and is incorporated by reference.(11)Statement regarding computation of per share earnings-omitted since information necessary to make the computation is included in the Financial Statements.(15)None(18)None(19)None(22)None(23)None(24)None(31.1)Certification of President (Principal Executive Officer and CEO) Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).(31.2)Certification of Senior Vice-President and CFO (Principal Financial Officer) Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a).(32)Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   -17-    SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.CHURCH LOANS & INVESTMENTS TRUSTBy:/s/ Kelly ArcherKelly Archer
President and CEODate:February 14, 2008By:/s/ Robert E. FowlerRobert E. Fowler
Chief Financial Officer
(Principal Financial Officer)Date:February 14, 2008  -18-    Trade Mark and Copyright Notice

Copyright © 2008 by Church Loans & Investments Trust
This report is copyrighted material of
Church Loans & Investments Trust.
Church Loans & Investments Trust is a federally registered service mark
of the Trustees of Church Loans & Investments Trust.
The unauthorized use of the trade mark, service mark and copyrights
of Church Loans & Investments Trust without the express,
written permission of Church Loans & Investments Trust,
is strictly prohibited. All rights reserved.   -19-     EXHIBIT 31.1CERTIFICATION OF PRESIDENT (PRINCIPAL EXECUTIVE OFFICER AND CEO)
PURSUANT TO EXCHANGE ACT
RULE 13a-14(a)/15d-14(a)I, Kelly Archer, President and Chief Executive Officer of Church Loans & Investments Trust, certify that:1.I have reviewed this Quarterly Report on Form 10-Q of Church Loans & Investments Trust;2.Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;3.Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report;4.The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:(a)Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;(b)Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and(c)Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and5.The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Trust Managers:(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.By:/s/ Kelly ArcherKelly Archer
President and CEODate:February 14, 2008    -20-    EXHIBIT 31.2CERTIFICATION OF SENIOR VICE-PRESIDENT AND CFO (PRINCIPAL FINANCIAL OFFICER)
PURSUANT TO EXCHANGE ACT
RULE 13a-14(a)/15d-14(a)I, Robert E. Fowler, Senior Vice-President and CFO of Church Loans & Investments Trust certify that:1.I have reviewed this Quarterly Report on Form 10-Q of Church Loans & Investments Trust;2.Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;3.Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report;4.The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:(a)Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;(b)Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and(c)Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and5.The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Trust Managers:(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.By:/s/ Robert E. FowlerRobert E. Fowler
Senior Vice President and CFODate:February 14, 2008     -21-      EXHIBIT 32CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002February 14, 2008In connection with the filing of the Quarterly Report on Form 10-Q of Church Loans & Investments Trust, a Texas real estate investment trust, (the Trust), for the period ending December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Trust certifies that, to the best of the officers knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust as of the dates and for the periods expressed in the ReportBy:/s/ Kelly ArcherKelly Archer
President and CEO
Principal Executive Officer)By:/s/ Robert E. FowlerRobert E. Fowler
Senior Vice-President and CFO
(Principal Financial Officer)     -22-