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

                    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 June 30, 1998

                                       OR

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

                                   ----------

                           Commission File No. 0-8117


                        CHURCH LOANS & INVESTMENTS TRUST


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

                  Registrant's telephone number: 806-358-3666


                                   ----------


     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                               Yes [ X ] No [ _ ]


As of June 30, 1998,  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 June 30, 1998
                          and March 31, 1998 .......................   1

                      Condensed Statements of Income for the
                          three-month periods ended
                          June 30, 1998 and 1997 ...................   2

                      Condensed Statements of Cash Flows
                          for the three-month periods ended
                          June 30, 1998 and 1997 ..................    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)
                        June 30, 1998 and March 31, 1998

                  ASSETS                         June 30, 1998    March 31, 1998
                  ------                         -------------    --------------

CASH AND CASH EQUIVALENTS ......................   $       --      $     32,403
RECEIVABLES
    Mortgage loans and church bonds -
     performing ................................     23,398,963      22,165,629
    Interim construction loans - performing ....     12,256,905      10,732,915
    Nonperforming mortgage loans, church
     bonds and interim construction loans ......      2,420,094       2,492,095
    Less: Allowance for possible credit losses .     (1,080,213)     (1,035,213)
                                                   ------------    ------------
                                                     36,995,749      34,355,426
    Accrued interest receivable ................        422,387         341,360
    Notes receivable ...........................        445,437         405,860
                                                   ------------    ------------
                  Total receivables ............     37,863,573      35,102,646
PROPERTY AND EQUIPMENT, net ....................        193,700         197,619
REAL ESTATE ACQUIRED THROUGH FORECLOSURE .......      1,479,486       1,479,486
UNAMORTIZED DEBT EXPENSE, net and other assets .         57,509          62,960
                                                   ------------    ------------

TOTAL ASSETS ...................................   $ 39,594,268    $ 36,875,114
                                                   ============    ============
                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
    Bank overdraft  ............................   $    178,475    $       --
    Notes payable and line of credit:
      Related party ............................      1,911,514       1,969,938
      Other ....................................      9,598,318       5,740,773
                                                   ------------    ------------
                                                     11,509,832       7,710,711
                                                   ------------    ------------
    Secured savings certificates:
      Related party ............................           --           240,000
      Other ....................................      5,848,498       6,823,823
                                                    ------------    ------------
                                                      5,848,498       7,063,823
    Accrued interest payable ...................        107,200          29,768
    Other ......................................        823,191         781,455
                                                   ------------    ------------
                  Total liabilities ............     18,288,721      15,585,757
                                                   ------------    ------------

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 ...................        503,206         665,491
                                                   ------------    ------------
                  Total shareholders' equity ...     21,127,072      21,289,357
                                                   ------------    ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .....   $ 39,594,268    $ 36,875,114
                                                   ============    ============

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

                                      -1-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)
                   Condensed Statements of Income (Unaudited)
                Three-month periods ended June 30, 1998 and 1997

                                                         Three-month periods
                                                            ended June 30,
                                                          1998          1997
                                                          ----          ----
INTEREST INCOME AND FEES
     Interest and fees on mortgage
       loans, church bonds and
       interim construction loans ...................   $1,134,694   $  933,207
     Interest on temporary
       investments ..................................       12,744       29,649
                                                        ----------   ----------
          Total interest
           income and fees ..........................    1,147,438      962,856
                                                        ----------   ----------
DEBT EXPENSE
     Interest .......................................      302,931      233,676
     Amortization of:
       Registration costs ...........................         --          4,374
       Commissions paid to
        brokers .....................................       12,239       29,595
                                                        ----------   ----------
          Total debt expense ........................      315,170      267,645
                                                        ----------   ----------
          Net interest income .......................      832,268      695,211
PROVISION FOR POSSIBLE
    CREDIT LOSSES ...................................       45,000       45,000
                                                        ----------   ----------
          Net interest income
            less provision for
            possible credit
            losses ..................................      787,268      650,211
                                                        ----------   ----------
OTHER INCOME ........................................        1,429        2,013
OTHER OPERATING EXPENSES
     General and administrative .....................      165,306      165,466
     Board of Trust Managers'
      fees ..........................................       14,413       11,939
                                                        ----------   ----------
           Total other
            operating expenses ......................      179,719      177,405
                                                        ----------   ----------
           Income before provision
            for income taxes ........................      608,978      474,819

PROVISION FOR INCOME TAXES ..........................          449        3,627
                                                        ----------   ----------
          NET INCOME ................................   $  608,529   $  471,192
                                                        ==========   ==========
WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING ..........................    7,007,402    7,007,402
                                                        ==========   ==========
NET INCOME PER SHARE ................................   $      .09   $      .07
                                                              ====         ====
DIVIDENDS PER SHARE  ................................   $      .11   $      .10
                                                              ====         ====
      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)
                Three-month periods ended June 30, 1998 and 1997

                                                         Three-month periods
                                                            ended June 30,
                                                          1998          1997
                                                          ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income ................................   $   608,529    $     471,192
     Adjustments to reconcile net income to net
        cash provided by operating activities:
         Depreciation ..........................         3,919            3,918
         Amortization of debt expense ..........        12,239           33,969
         Amortization of loan discounts ........       (38,092)         (19,434)
         Provision for possible credit losses ..        45,000           45,000
         Changes in:
           Accrued interest receivable .........       (81,027)         (71,206)
           Accrued interest payable ............        77,432           12,344
           Other liabilities ...................        41,736          110,084
           Other, net ..........................        (6,788)          (5,240)
                                                   -----------    -------------
                  Net cash provided by operating
                   activities ..................       662,948          580,627
                                                   -----------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in mortgage and interim
        construction
       loans and church bonds ..................    (6,523,515)      (3,801,344)
     Payments received on mortgage and interim
       construction loans and church bonds .....     3,876,284        7,782,889
     Investments in notes receivable ...........      (124,651)         (90,452)
     Payments received on notes receivable .....        85,074           82,512
                                                   -----------    -------------
                  Net cash provided (used) by
                   investing activities ........    (2,686,808)       3,973,605
                                                   -----------    -------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Bank overdraft ............................       178,475             --
     Sale of secured savings certificates (SSC)           --          2,435,121
     Borrowings on notes payable ...............     7,119,702          788,454
     Principal payments on:
       SSCs ....................................    (1,215,325)      (2,472,863)
       Notes payable ...........................    (3,320,581)      (2,423,930)
     Commissions paid to broker on issuance
        of SSCs ................................          --            (33,363)
     Cash dividends ............................      (770,814)        (700,740)
                                                   -----------    -------------
                   Net cash provided (used) by
                    financing activities .......     1,991,457       (2,407,321)
                                                   -----------    -------------
                  Increase (decrease) in cash
                   and cash equivalents ........       (32,403)       2,146,911
CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD .......................        32,403          586,629
                                                   -----------    -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .....   $      --      $   2,733,540
                                                   ===========    =============
Supplemental disclosure of cash flow information
     Cash paid during the period for interest ..   $   225,499    $     221,332
                                                   ===========    =============

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

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


NOTE 1 - GENERAL

See Summary of Significant  Accounting  Policies in the Trust's Annual Report on
Form 10- KSB405 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 June 30, 1998
and 1997, were as follows:

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

             June 30, 1998            10.57%              7.48%         3.09%
             June 30, 1997            10.54%              7.29%         3.25%



NOTE 3 - CONTRACTUAL MATURITIES

Scheduled  principal payments on mortgage loans,  church bonds and interim loans
and  indebtedness  (including  secured savings  certificates  and notes payable)
outstanding at June 30, 1998, for the five  twelve-month  periods  subsequent to
June 30, 1998, follow:


            Twelve-month period    Mortgage loans, church bonds
            ending June 30              and interim loans           Indebtedness
            -------------------         -----------------           ------------
                      1999                $14,944,418                 15,404,330
                      2000                  1,573,321                  1,928,000
                      2001                  1,516,834                     26,000
                      2002                  1,476,201                        -
                      2003                  1,366,120                        -
                                          -----------                 ----------

                                      -4-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)
               Notes to Condensed Financial Statements (Unaudited)


NOTE 4 - MORTGAGE LOANS, CHURCH BONDS AND INTERIM CONSTRUCTION
              LOANS

Mortgage loans, church bonds and interim construction loans on which the accrual
of interest had been discontinued  amounted to $2,420,094 and $2,998,476 at June
30, 1998 and 1997,  respectively.  If interest on these mortgage  loans,  church
bonds and interim  construction  loans had been accrued as earned,  interest and
fees on loans in the accompanying condensed statements of income would have been
increased by approximately $66,000 and $60,000 for the three-month periods ended
June 30, 1998 and 1997, respectively. Interest income actually recognized during
1998 was approximately $24,000.  Interest income actually recognized in 1997 was
not significant.


NOTE 5 - SECURED SAVINGS CERTIFICATES

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

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

                   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  Period Ended June 30, 1998 as Compared to
the Three-Month Period Ended June 30, 1997:

                                    Revenues

The Trust's  revenues are derived from  interest  income earned on loans as well
as,  to a  lesser  degree,  interest  earned  on  church  bonds  and  short-term
investments.   The  increase  in  the  Trust's  revenues  of  $184,582  for  the
three-month period ended June 30, 1998, as compared to the corresponding  period
in 1997 is primarily  due to an increase in the amount of  performing  loans and
church bonds from  $27,508,857  at June 30, 1997 to $35,655,868 at June 30, 1998
and a slight  increase in the average  rate of return of the  mortgage  loan and
church bond portfolio from 10.54% at June 30, 1997 to 10.57% at June 30, 1998.


                                Interest Expense

The most  significant  expense  item is interest  expense  which  comprised  the
majority of total operating  expense for each of the  three-month  periods ended
June 30, 1998 and 1997.  The  increase of $69,255 in interest  expense  resulted
from an increase in the average total amount of indebtedness  outstanding during
the three-month  period ended June 30, 1998 as compared to the same period ended
June 30, 1997 and a slight increase in the weighted average interest rate on all
indebtedness from 7.29% at June 30, 1997 to 7.48% at June 30, 1998.


                            Other Operating Expenses


Other operating  expenses were $179,719 for the three months ended June 30, 1998
and were comparable to $177,405 for the same period in 1997.


                                    Liquidity

At June 30, 1998, the Trust had book cash overdrafts of $178,475;  however,  the
Trust  also  had  $8,900,000  available  on its  line  of  credit  with a  bank.
Management believes that this and repayments from loans will be adequate to meet
the Trust's obligations.

                                      -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: August 6, 1998                            BY:/s/ B.R. McMorries
                                                   -----------------------------
                                                   B.R. McMorries,
                                                   Chairman of the Board of
                                                   Trust Managers


DATE: August 6, 1998                            BY:/s/ Kelly Archer
                                                   -----------------------------
                                                   Kelly Archer
                                                   Chief Financial Officer





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