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

                    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, 1996

                                       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, 1996, 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, 1996
                          and March 31, 1996 .......................   1

                      Condensed Statements of Income for the
                          three-month and nine-month periods ended
                          December 31, 1996 and 1995 ...............   2

                      Condensed Statements of Cash Flows
                          for the nine-month periods ended 
                          December 31, 1996 and 1995 ...............   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, 1996 and March 31, 1996

                                     ASSETS

                                               DECEMBER 31, 1996  MARCH 31, 1996
                                               -----------------  --------------
CASH AND CASH EQUIVALENTS ......................   $  1,315,944    $    722,430
RECEIVABLES
    Mortgage loans and church bonds -
    earning ....................................     19,928,716      21,886,390
    Interim construction loans -
    earning ....................................      9,532,753       7,877,489
    Nonearning mortgage loans, church
    bonds and interim construction
    loans ......................................      3,650,338       2,769,345
    Less: Allowance for possible
     credit losses .............................       (810,213)       (728,665)
                                                   ------------    ------------
                                                     32,301,594      31,804,559
                                                   ------------    ------------
    Accrued interest receivable ................        276,855         307,291
    Notes receivable ...........................        491,737         483,631
                                                   ------------    ------------
                  Total receivables ............     33,070,186      32,595,481

PROPERTY AND EQUIPMENT, net of accumulated
 depreciation of $357,419 and $429,377 at
 December 31, 1996 and March 31, 1996,
 respectively ..................................        217,209         228,965
PROPERTY HELD FOR INVESTMENT ...................         83,714          83,714
UNAMORTIZED DEBT EXPENSE, net and
    other assets ...............................         77,312          86,730
                                                   ------------    ------------
TOTAL ASSETS ...................................   $ 34,764,365    $ 33,717,320
                                                   ============    ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
    Notes payable and line of credit:
      Related party ............................   $  1,333,492    $  1,482,250
      Other ....................................      3,040,969       3,073,830
                                                   ------------    ------------
                                                      4,374,461       4,556,080
                                                   ------------    ------------
    Secured savings certificates:
      Related party ............................        415,692         485,692
      Other ....................................      7,151,165       7,059,683
                                                   ------------    ------------
                                                      7,566,857       7,545,375
    Dividends payable ..........................      1,611,702            --   
    Accrued interest payable ...................         34,754          37,817
    Federal income taxes payable ...............           --             7,060
    Other ......................................        421,316         220,259
                                                   ------------    ------------
                  Total liabilities ............     14,009,090      12,366,591
                                                   ------------    ------------
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 ...................        131,409         726,863
                                                   ------------    ------------
         Total shareholders' equity ............     20,755,275      21,350,729
                                                   ------------    ------------
TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY ..........................   $ 34,764,365    $ 33,717,320
                                                   ============    ============

             These condensed financial statements should be read in
               connection with the accompanying notes to condensed
                              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, 1996 and 1995

                              THREE-MONTH PERIODS ENDED NINE-MONTH PERIODS ENDED
                                     DECEMBER 31,             DECEMBER 31,
                                  1996         1995         1996        1995
                                  ----         ----         ----        ----
INTEREST INCOME AND FEES
    Interest and fees on
      mortgage loans, church
      bonds, and interim
      construction loans ...   $  970,234   $  974,030   $2,864,449   $3,173,394
    Interest on temporary
       investments .........       17,690        9,763       35,423       28,631
                               ----------   ----------   ----------   ----------
          Total interest
            income and fees       987,924      983,793    2,899,872    3,202,025
                               ----------   ----------   ----------   ----------
DEBT EXPENSE
    Interest ...............      226,567      237,881      704,644      860,739
    Amortization of:
       Registration cost ...        6,561       10,541       23,724       10,541
       Commissions paid to
        brokers ............       14,334       12,600       44,059       36,441
                               ----------   ----------   ----------   ----------
         Total debt expense       247,462      261,022      772,427      907,721
                               ----------   ----------   ----------   ----------
          Net interest income     740,462      722,771    2,127,445    2,294,304

PROVISION FOR POSSIBLE
    CREDIT  LOSSES .........       45,000       22,500       90,000       62,500
                               ----------   ----------   ----------   ----------
          Net interest income
            less provision
            for possible
            credit losses ..      695,462      700,271    2,037,445    2,231,804

OTHER INCOME ...............       17,603        2,950       22,728        8,850

OTHER OPERATING EXPENSES
    General and administrative    122,825      105,259      382,357      381,967
    Board of Trust Managers'
       fees ................       10,120       10,124       30,902       30,182
                               ----------   ----------   ----------   ----------
          Total other
          operating expenses      132,945      115,383      413,259      412,149
                               ----------   ----------   ----------   ----------
          NET INCOME .......   $  580,120   $  587,838   $1,646,914   $1,828,505
                               ==========   ==========   ==========   ==========
WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING ..    7,007,402    7,007,402    7,007,402    7,007,402
                               ==========   ==========   ==========   ==========
NET INCOME PER SHARE .......   $      .08   $      .08   $      .24   $      .26
                               ==========   ==========   ==========   ==========

DIVIDENDS PER SHARE ........   $      .23   $      .24   $      .32   $      .32
                               ==========   ==========   ==========   ==========

             These condensed financial statements should be read in
               connection with the accompanying notes to condensed
                              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, 1996 and 1995

                                                         NINE-MONTH PERIODS
                                                         ENDED DECEMBER 31,
                                                         ------------------
                                                         1996           1995
                                                         ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES
          Net income ...........................   $  1,646,914    $  1,828,505
          Adjustments to reconcile net income
             to net cash provided by operating
             activities:
                Depreciation ...................         11,756          11,754
                Amortization of debt expense ...         67,783          46,982
                Provision for possible credit
                losses .........................         90,000          62,500
                Amortization of loan discounts .       (148,223)       (249,171)
                Changes in:
                    Accrued interest receivable          30,436          19,674
                    Accrued interest payable ...         (3,063)        (29,840)
                    Federal income taxes
                     payable ...................         (7,060)         (5,010)
                    Other liabilities ..........        201,057         128,532
                Other, net .....................        (29,355)            372
                                                   ------------    ------------
                        Net cash provided by
                         operating activities ..      1,860,245       1,814,298
                                                   ------------    ------------
      CASH FLOWS FROM INVESTING ACTIVITIES
          Investment in mortgage and interim
             construction loans and church
             bonds .............................    (12,533,765)     (9,274,875)
          Payments received on mortgage and
             interim construction loans and
             church bonds ......................     12,103,405      13,930,036
          Advances of notes receivable .........       (385,983)       (307,611)
          Payments received on notes receivable         377,877         229,767
                                                   ------------    ------------
                        Net cash provided (used)
                         by investing activities       (438,466)      4,577,317
                                                   ------------    ------------
      CASH FLOWS FROM FINANCING ACTIVITIES
          Sale of secured savings certificates .      1,938,329       3,100,744
          Borrowings on notes payable ..........      6,354,676       8,038,227
          Principal payments on:
             Secured savings certificates ......     (1,916,847)     (2,897,074)
             Notes payable .....................     (6,536,295)    (13,557,633)
          Registration costs of secured savings
           certificates ........................         (7,732)        (44,126)
          Commissions paid to broker on
           issuance of secured savings
           certificates ........................        (29,730)        (41,567)
          Cash dividends paid ..................       (630,666)       (560,593)
                                                   ------------    ------------
                        Net cash used by
                         financing activities ..       (828,265)     (5,962,022)
                                                   ------------    ------------
                        Increase in cash and
                         cash equivalents ......        593,514         429,593

      CASH AND CASH EQUIVALENTS AT BEGINNING
        OF PERIOD ..............................        722,430         366,977
                                                   ------------    ------------
      CASH AND CASH EQUIVALENTS AT
        END OF PERIOD ..........................   $  1,315,944    $    796,570
                                                   ============    ============
      SUPPLEMENTAL DISCLOSURE OF
       CASH FLOW INFORMATION
          Cash paid during the period
           for interest ........................   $    707,707    $    890,579
                                                   ============    ============

During  December 1996,  the Board of Trust  managers  declared cash dividends of
$1,611,702  ($.23 per share) payable in January 1997.  During December 1995, the
Board of Trust managers  declared cash dividends of $1,681,776  ($.24 per share)
payable in January 1996.

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

       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.

(2)    WEIGHTED AVERAGE INTEREST RATES

       Weighted average interest rates and net interest rate margins at December
       31, 1996 and 1995 were as follows:

                                   Mortgage Loan and      Total     Net Interest
                                 Church Bond Portfolio Indebtedness  Rate Margin
                                 --------------------- ------------  -----------

          December 31, 1996  ....        10.81             7.13          3.68
          December 31, 1995  ....        11.22             7.42          3.80

(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, 1996,  for the five  twelve-month
       periods subsequent to December 31, 1996, follow:

                                       Mortgage loans,
            Twelve-month period         church bonds
            ending December 31,       and interim loans             Indebtedness
            -------------------       ------------------            ------------
                   1997                 $14,076,021                    8,365,217
                   1998                   1,638,537                    2,262,225
                   1999                   1,340,711                    1,313,876
                   2000                   1,224,933                         --
                   2001                   1,100,469                         --
                                        ===========                  ===========

(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  $3,650,338  and
       $2,885,189  at December 31, 1996 and 1995,  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
       $302,000 and $235,000 for the nine-month  periods ended December 31, 1996
       and 1995, respectively.

                                      -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 (Continued)

       On June 27, 1996, because of recent deterioration or past due status, the
       Trust added additional loans in the total principal balance of $1,625,514
       to nonearning  assets.  Two interim loans represented  $1,297,662 of such
       amount.  Such interim  loans were moved to  non-accrual  status after the
       makers  of  loans  filed  for  protection  under  Chapter  11 of the U.S.
       Bankruptcy  Code during June 1996.  In addition to the  nonaccrual  loans
       previously  mentioned,  management  has  doubts as to a  certain  interim
       loan's ability to comply with present  repayment  terms.  Such loan had a
       balance of  approximately  $1,556,000  at  December  31, 1996 and was not
       classified as nonearning at that date. Management believes that potential
       losses related to the aforementioned  loans have been provided for in the
       Trust's allowance for possible credit losses.

(5)    SECURED SAVINGS CERTIFICATES

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

       Certificates  are secured under the terms of an indenture  that requires,
       among other things,  the pledge of mortgage notes  receivable  with total
       unpaid  principal  amounts  not less than  100% or 125% of the  aggregate
       principal amount of Certificates outstanding.  Due to the fluctuations in
       the amount of sales of  Certificates as well as in the repayment of notes
       pledged to secure the  Certificates,  the Trust has on occasion failed to
       maintain the required ratio of pledged notes to outstanding  Certificates
       for a short period of time until the deficiency  could be corrected.  The
       indenture  trustee has been aware of these temporary  technical  defaults
       and has not declared a default under the Indenture. At December 31, 1996,
       the Trust was in compliance with the requirement.

(6)    LINE OF CREDIT PAYABLE TO THE BANK

       The Trust's $10,000,000 line of credit was renewed in November 1996.

                   This information is an integral part of the
                  accompanying condensed 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,
1996 as Compared to the  Three-Month  and Nine-Month  Periods Ended December 31,
1995:

                                    REVENUES

The Trust's  revenues are derived from interest  income earned on mortgage loans
as well as, to a lesser degree,  interest  earned on church bonds and short-term
investments. The decrease in the Trust's revenues of $302,153 for the nine-month
period ended December 31, 1996, as compared to the corresponding period in 1995,
is primarily due to (1) a decrease in the total amount of mortgage loans, church
bonds and interim  construction  loans  outstanding from $34,825,508 at December
31, 1995 to  $33,111,807  at December  31, 1996,  (2) an increase in  nonearning
loans of  $765,149  from  December  31,  1995 to December  31,  1996,  and (3) a
decrease in the  weighted  average  rate on  mortgage  loans,  church  bonds and
interim  loans from 11.22% at December  31, 1995 to 10.81% at December 31, 1996.
Revenues for the  three-month  periods  ended  September  30, 1996 and 1995 were
comparable.

                                INTEREST EXPENSE

The most  significant  expense  item is interest  expense  which  comprised  the
majority of total  operating  expense for each of the three-month and nine-month
periods ended December 31, 1996 and 1995. Interest expense decreased by $156,095
for  the  nine-month  period  ended  December  31,  1996,  as  compared  to  the
corresponding  period in 1995,  primarily  due to (1)  decreases in average debt
balances and (2) a decrease in the weighted  average interest rate from 7.42% at
December  31,  1995 to 7.13% at  December  31,  1996.  Interest  expense for the
three-month periods ended September 30, 1996 and 1995 were comparable.

                                NONEARNING ASSETS

On June 27, 1996, because of recent  deterioration or past due status, the Trust
added  additional  loans  in  the  total  principal  balance  of  $1,625,514  to
nonearning assets. Two interim loans represented $1,297,662 of such amount. Such
interim loans were moved to  non-accrual  status after the makers of loans filed
for protection under Chapter 11 of the U.S. Bankruptcy Code during June 1996. In
addition to the nonaccrual loans previously mentioned,  management has doubts as
to a certain interim loan's ability to comply with present repayment terms. Such
loan had a balance of approximately  $1,556,000 at December 31, 1996 and was not
classified as nonearning at that date. Management believes that potential losses
related  to such loans  have been  provided  for in the  Trust's  allowance  for
possible credit losses.

                                    LIQUIDITY

The Trust's $10,000,000 line of credit was renewed in November 1996.

                                      -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 7, 1997                          BY:/s/ B.R. McMorries
                                                   -----------------------------
                                                   B.R. McMorries,
                                                   Chairman of the Board of
                                                   Trust Managers


DATE: February 7, 1997                          BY:/s/ Kelly Archer
                                                   -----------------------------
                                                   Kelly Archer
                                                   Chief Financial Officer





                                      - 8 -
<PAGE>