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

                    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, 1997

                                       OR

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

                                   ----------

                           Commission File No. 0-8117


                        CHURCH LOANS & INVESTMENTS TRUST


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

                  Registrant's telephone number: 806-358-3666


                                   ----------


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

                               Yes [ X ] No [ _ ]


     As of June  30,  1997,  7,007,402  shares  of the  Registrant's  shares  of
beneficial interest were outstanding.

     Transitional Small Business Disclosure Format (check one)

                               Yes [ _ ] No [ X ]
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST



                                     INDEX

                                                                     Page
                                                                     ----
        Part I.

             Item 1:  Financial Information:

                      Condensed Balance Sheets at June 30, 1997
                          and March 31, 1997 .......................   1

                      Condensed Statements of Income for the
                          three-month periods ended June 30, 1997
                          and 1996 .................................   2

                      Condensed Statements of Cash Flows
                          for the three-month periods ended 
                          June 30, 1997 and 1996 ...................   3

                      Notes to Condensed Financial Statements .....    4

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


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

        Signatures ................................................    8
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                      Condensed Balance Sheets (Unaudited)
                        June 30, 1997 and March 31, 1997

                  ASSETS                          JUNE 30, 1997   MARCH 31, 1997
                  ------                          -------------   --------------

CASH AND CASH EQUIVALENTS ......................   $  2,733,540    $    586,629
RECEIVABLES

    Mortgage loans and church bonds -
     performing ................................     17,750,895      19,177,849
    Interim construction loans - performing ....      9,757,962      12,133,111
    Nonearning mortgage loans, church bonds
     and interim construction loans ............      2,998,476       3,158,484
    Less: Allowance for possible credit losses .       (900,213)       (855,213)
                                                   ------------    ------------
                                                     29,607,120      33,614,231
                                                   ------------    ------------
    Accrued interest receivable ................        374,962         303,756
    Notes receivable ...........................        544,393         536,453
                                                   ------------    ------------
                  Total receivables ............     30,526,475      34,454,440

PROPERTY AND EQUIPMENT, net ....................        209,373         213,291
UNAMORTIZED DEBT EXPENSE, net and other assets .        206,026         201,392
                                                   ------------    ------------
TOTAL ASSETS ...................................   $ 33,675,414    $ 35,455,752
                                                   ============    ============
       LIABILITIES AND SHAREHOLDERS' EQUITY
       ------------------------------------
LIABILITIES
    Notes payable and line of credit:
      Related party ............................   $  1,658,638    $  1,648,660
      Other ....................................      2,751,762       4,397,216
                                                   ------------    ------------
                                                      4,410,400       6,045,876
                                                   ------------    ------------
    Secured savings certificates:
      Related party ............................        290,000         315,692
      Other ....................................      7,246,230       7,258,280
                                                   ------------    ------------
                                                      7,536,230       7,573,972
    Accrued interest payable ...................         57,555          45,211
    Other ......................................        665,658         555,574
                                                   ------------    ------------
                  Total liabilities ............     12,669,843      14,220,633
                                                   ------------    ------------
SHAREHOLDERS' EQUITY
    Shares of beneficial interest, no par value;
     authorized shares unlimited, 7,007,402
     shares issued and outstanding .............     20,623,866      20,623,866
    Undistributed net income ...................        381,705         611,253
                                                   ------------    ------------
                  Total shareholders' equity ...     21,005,571      21,235,119
                                                   ------------    ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .....   $ 33,675,414    $ 35,455,752
                                                   ============    ============
     These financial statements should be read only in connection with the
                  accompanying notes to financial statements.

                                      -1-
<PAGE>
                        CHURCH LOANS & INVESTMENTS TRUST
                        (A Real Estate Investment Trust)

                   Condensed Statements of Income (Unaudited)
                Three-month periods ended June 30, 1997 and 1996

                                              THREE-MONTH PERIODS ENDED JUNE 30,
                                                           1997         1996
                                                           ----         ----
INTEREST INCOME AND FEES
     Interest and fees on mortgage loans, church
       bonds and interim construction loans ..........   $  933,207   $  888,589
     Interest on temporary investments ...............       29,649        7,727
                                                         ----------   ----------
                  Total interest income and fees .....      962,856      896,316
                                                         ----------   ----------

DEBT EXPENSE
     Interest ........................................      233,676      229,180
     Amortization of:
       Registration costs ............................        4,374       10,610
       Commissions paid to brokers ...................       29,595       14,719
                                                         ----------   ----------
                  Total debt expense .................      267,645      254,509
                                                         ----------   ----------
                  Net interest income ................      695,211      641,807

PROVISION FOR POSSIBLE CREDIT LOSSES .................       45,000       22,500
                                                         ----------   ----------
                  Net interest income less provision for
                    possible credit losses ...........      650,211      619,307
                                                         ----------   ----------

OTHER INCOME .........................................        2,013        2,698

OTHER OPERATING EXPENSES
     General and administrative ......................      165,466      139,613
     Board of Trust Managers' fees ...................       11,939       10,768
                                                         ----------   ----------
                  Total other operating expenses .....      177,405      150,381
                                                         ----------   ----------

                  Income before provision for
                   income taxes ......................      474,819      471,624

PROVISION FOR INCOME TAXES ...........................        3,627         --
                                                         ----------   ----------
NET INCOME ...........................................   $  471,192   $  471,624
                                                         ==========   ==========
WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING ...........................    7,007,402    7,007,402
                                                         ==========   ==========
NET INCOME PER SHARE .................................   $      .07   $      .07
                                                         ==========   ==========
DIVIDENDS PER SHARE ..................................   $      .10   $      .09
                                                         ==========   ==========

     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, 1997 and 1996

                                              THREE-MONTH PERIODS ENDED JUNE 30,
                                                        1997            1996
                                                        ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income ..................................   $   471,192    $   471,624
     Adjustments to reconcile net income to net
       cash provided by operating activities:
         Depreciation ............................         3,918          3,920
         Amortization of debt expense ............        25,329         25,329
         Amortization of loan discounts ..........       (19,434)       (25,971)
         Provision for possible credit losses ....        45,000         22,500
         Changes in:
           Accrued interest receivable ...........       (71,206)       (14,091)
           Accrued interest payable ..............        12,344         15,641
           Federal income taxes payable ..........          --           (7,060)
           Other liabilities .....................       110,084        100,251
           Other, net ............................         3,400        (27,270)
                                                     -----------    -----------
                  Net cash provided by operating
                   activities ....................       580,627        564,873
                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in mortgage and interim
      construction loans and church bonds ........    (4,685,728)    (5,718,352)
     Payments received on mortgage and interim
       construction loans and church bonds .......     8,667,273      3,310,150
     Investments in notes receivable .............       (90,452)      (261,768)
     Payments received on notes receivable .......        82,512         89,327
                                                     -----------    -----------
                  Net cash provided (used) by
                   investing activities ..........     3,973,605     (2,580,643)
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
     Sale of secured savings certificates ........     2,435,121        357,940
     Borrowings on notes payable .................       788,454      4,057,213
     Principal payments on:
       Secured savings certificates ..............    (2,472,863)       (18,000)
       Notes payable .............................    (2,423,930)    (2,231,895)
     Commissions paid to broker on issuance of secured
       savings certificates ......................       (33,363)        (5,428)
     Cash dividends ..............................      (700,740)      (630,666)
                                                     -----------    -----------
                  Net cash provided (used) by
                   financing activities ..........    (2,407,321)     1,529,164
                                                     -----------    -----------
                  Increase (decrease) in cash
                   and cash equivalents ..........     2,146,911       (486,606)

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD .............................       586,629        722,430
                                                     -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD .......   $ 2,733,540    $   235,824
                                                     ===========    ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
     Cash paid during the period for interest ....   $   221,332    $   213,539
                                                     ===========    ===========

     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, 1997
and 1996, were as follows:

                                  Mortgage loan and       Total     Net interest
                                 church bond portfolio indebtedness  rate margin
                                 --------------------- ------------ ------------
         June 30, 1997                  10.54%           7.29          3.25
         June 30, 1996                  10.39            7.21          3.18

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, 1997, for the five  twelve-month  periods  subsequent to
June 30, 1997, follow:

            Twelve-month period   Mortgage loans, church bonds
              ending June 30,          and interim loans        Indebtedness
              ---------------          -----------------        ------------
                   1998  ....            $13,610,855             6,965,732
                   1999  ....              1,289,801             3,655,898
                   2000  ....              1,147,127             1,325,000
                   2001  ....              1,034,463                  -
                   2002  ....                950,500                  -
                                       --------------           ------------

                                      -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 $2,998,476 and $3,962,215 at June
30, 1997 and 1996,  respectively.  If interest on these mortgage  loans,  church
bonds and interim  construction  loans had been accrued as earned,  interest and
fees on loans in the accompanying condensed statements of income would have been
increased by approximately $60,000 and $98,000 for the three-month periods ended
June 30, 1997 and 1996, respectively.

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. Church Loans has
an agreement with Great Nation  Investment  Corporation  (Great Nation)  whereby
Great Nation will use its best efforts to sell SSCs  registered by Church Loans.
The  agreement  provides that Church Loans will pay Great Nation a commission on
the basis of an annualized rate equal to  three-fourths of one percent per annum
of the face amount of each certificate sold by Great Nation.

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.

NOTE 6 - SUBSEQUENT EVENT

During July 1997, the Trust  foreclosed on a nonearning loan that had a recorded
principal balance of approximately $979,000.  Management believes that the loss,
if any, from the ultimate disposition of the property will not be significant.

                   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, 1997 as Compared to
the Three-Month Period Ended June 30, 1996:

                                    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 increase in the Trust's revenues of $66,540 for the three-month
period ended June 30, 1997, as compared to the  corresponding  period in 1996 is
primarily due to a decrease in the amount of nonearning loans and an increase in
the average rate of return of the mortgage loan and church bond  portfolio  from
10.39% at June 30, 1996 to 10.54% at June 30, 1997.

                                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, 1997 and 1996. The increase of $4,496 in interest expense resulted from
an increase in the weighted average interest rate on all indebtedness from 7.21%
at June 30,  1996,  to 7.29% at June 30,  1997 which was  partially  offset by a
decrease in the average  total  amount of  indebtedness  outstanding  during the
three-month period ended June 30, 1997 as compared to the same period ended June
30, 1996.

                            OTHER OPERATING EXPENSES

Other operating expenses were $177,405 for the three months ended June 30, 1997,
or $27,024 more than the  comparable  period in 1996. The increase was primarily
caused by  increased  legal  and other  fees and  other  costs  incurred  in the
collection of several nonearning loans.

                                    LIQUIDITY

The Trust's cash and cash equivalents  increased from $586,629 at March 31, 1997
to  $2,733,540  at June 30,  1997.  The  increase  is  largely  attributable  to
payments,  including  the  payoff  of  several  large  loans,  of  approximately
$8,667,000 being received on mortgage and interim  construction loans during the
three-month  period ended June 30, 1997.  Although these  payments  improved the
liquidity of the Trust,  future  earnings  are likely to be  adversely  affected
until additional loans are funded.

Due to the cost of  registration  and of sales of Secured  Savings  Certificates
(Certificates),  the cost of these  funds are  normally  higher than the cost of
borrowing  from bank  sources  or master  notes;  therefore,  the Board of Trust
Managers have decided not to register additional Certificates.  Accordingly, the
Trust is not able to sell these  certificates  after July 1997 and does not have
this source of funds available to meet its liquidity  needs. The Trust is in the
process  of  negotiating  an  increase  in its bank line of  credit.  Management
believes  that the  increased  line of credit  will be  secured  and the  Trusts
liquidity  will not be  adversely  affected,  particularly  in light of the loan
payments mentioned above.

                                      -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 14, 1997                           BY:/s/ B.R. McMorries
                                                   -----------------------------
                                                   B.R. McMorries,
                                                   Chairman of the Board of
                                                   Trust Managers


DATE: August 14, 1997                           BY:/s/ Kelly Archer
                                                   -----------------------------
                                                   Kelly Archer
                                                   Chief Financial Officer





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