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# U.S. Securities and Exchange Commission

# Washington, D.C. 20549

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# FORM 10-QSB

# [X] QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934

For the quarterly period ended September 30, 2003

OR

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

# ACT OF 1934

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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 September 30, 2003,  7,000,806 shares of the  Registrants
shares of beneficial interest were outstanding.

Transitional Small Business Disclosure Format (check one) Yes ___
No X

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# CHURCH LOANS & INVESTMENTS TRUSTINDEX

|Part I.       | Financial
          Information                                                                                                            | Page
|------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ----
|Item 1:       | Financial Statements:                                                                                                                      |     
|              | Condensed
          Balance Sheets (unaudited) at September 30, 2003 and March 31, 2003                                                    | 1   
|              | Condensed Statements of Income
          (unaudited) for the three-month and six-month periods
          ended September 30, 2003 and 2002 | 2   
|              | Condensed Statements of Cash Flows
          (unaudited) for the
          six-month periods ended September 30, 2003 and 2002             | 3   
|              | Notes to Condensed Financial Statements                                                                                                    | 4   
|Item 2:       | Management's Discussion and Analysis or Plan of Operation                                                                                  | 6   
|Item 3:       | Controls and Procedures                                                                                                                    | 13  
|Part II.      | Other Information                                                                                                                          |     
|Item 4:       | Submission of Matters to a Vote of Security Holders                                                                                        | 14  
|Item 6(a):    | Exhibits                                                                                                                                   | 14  
|Signatures    | 15                                                                                                                                        
|Exhibit Index | 16                                                                                                                                        



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


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Balance Sheets (Unaudited)
September 30, 2003 and March 31, 2003

`ASSETS
                                                                              September 30, 2003    March 31, 2003
                                                                              ------------------    ----------------
CASH AND CASH EQUIVALENTS                                                       $         87,513   $         273,432

RECEIVABLES
     Mortgage loans and church bonds - performing                                     35,761,635          35,689,239
     Interim construction loans - performing                                           6,384,531          15,672,768
     Nonperforming mortgage loans, church bonds
         and interim construction loans                                                3,175,443           2,834,574
     Less: Allowance for credit losses                                                (1,733,249)         (1,733,249)
                                                                              ------------------    ----------------
                                                                                      43,588,360          52,463,332
     Accrued interest receivable                                                         283,072             445,778
     Notes receivable                                                                    206,774             302,719
                                                                              ------------------    ----------------
                  Net receivables                                                     44,078,206          53,211,829
                                                                              ------------------    ----------------
PROPERTY AND EQUIPMENT, net                                                              129,774             129,774
OTHER REAL ESTATE OWNED                                                                1,328,832           1,433,087
OTHER ASSETS                                                                             132,854              58,275
                                                                              ------------------    ----------------
TOTAL ASSETS                                                                    $     45,757,179   $      55,106,397
                                                                              ==================    ================
                                       Liabilities and Shareholders' Equity

LIABILITIES
     Notes payable and line of credit:
         Related parties                                                        $      2,794,732   $       2,236,993
         Other                                                                        19,450,723          30,133,721
                                                                              ------------------    ----------------
                                                                                      22,245,455          32,370,714
     Accrued interest payable                                                             61,229             135,235
     Other                                                                             1,075,910           1,160,660
                                                                              ------------------    ----------------
                  Total liabilities                                                   23,382,594          33,666,609
                                                                              ------------------    ----------------
SHAREHOLDERS' EQUITY
     Shares of beneficial interest, no par value; authorized
         shares unlimited, 7,007,402 shares issued                                    20,623,866          20,623,866
     Undistributed net income                                                          1,767,209             832,412
     Treasury shares, at cost (6,596 shares)                                             (16,490)            (16,490)
                                                                              ------------------    ----------------
                  Total shareholders' equity                                          22,374,585          21,439,788
                                                                              ------------------    ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $     45,757,179   $      55,106,397
                                                                              ==================    ================`

These condensed financial statements should be read
only in  connection  with  the  accompanying  notes to  condensed  financial
statements.
-1-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Condensed Statements of Income (Unaudited)
Three-month and six-month periods ended
September 30, 2003 and 2002

`Three-month periods ended         Six-month periods ended
                                                            September 30,                      September 30,
                                                        2003             2002             2003              2002
                                                        ----             ----             ----              ----
INTEREST INCOME AND FEES
    Interest and fees on mortgage
      loans and interim
      construction loans                             $  958,927       $ 1,028,513      $ 2,178,256       $ 2,142,070
    Interest on temporary
       investments                                      169,364            67,176          305,006           131,878
                                                     ----------       -----------      -----------       -----------
          Total interest income and fees              1,128,291         1,095,689        2,483,262         2,273,948

INTEREST EXPENSE                                        188,797           240,396          455,614           470,955
                                                     ----------       -----------      -----------       -----------
          Net interest income                           939,494           855,293        2,027,648         1,802,993

PROVISION FOR POSSIBLE
    CREDIT LOSSES                                          -                 -                -                 -
                                                     ----------       -----------      -----------       -----------
          Net interest income
            less provision for
            possible credit losses                      939,494           855,293        2,027,648         1,802,993

OTHER INCOME, including gain
    on sale of other real estate owned
    of $107,643 in 2003                                  12,791               895          135,542            14,212

OTHER OPERATING EXPENSES
    General and administrative                          226,140           169,762          429,294           348,302
    Board of Trust Managers' fees                        14,040            17,637           29,010            31,859
                                                     ----------       -----------      -----------       -----------
          Total other operating expenses                240,180           187,399          458,304           380,161
                                                     ----------       -----------      -----------       -----------
          Income before provision
              for taxes                                 712,105           668,789        1,704,886         1,437,044

PROVISION FOR INCOME TAXES                                 -               21,870             -               22,324
                                                     ----------       -----------      -----------       -----------
NET INCOME                                           $  712,105       $   646,919      $ 1,704,886       $ 1,414,720
                                                     ==========       ===========      ===========       ===========
WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING                             7,000,806         7,000,806        7,000,806         7,000,806
                                                     ==========       ===========      ===========       ===========
NET INCOME PER SHARE                                    $ .10             $ .09            $ .24             $ .20
                                                     ==========       ===========      ===========       ===========
DIVIDENDS PER SHARE                                        -                 -               .11               .12
                                                     ==========       ===========      ===========       ===========`

These 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)
Six-month periods ended September 30, 2003 and 2002

`Six-month periods
                                                                                          ended September 30,
                                                                                         2003              2002
                                                                                         ----              ----
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                                       $ 1,704,886       $ 1,414,720
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation                                                                        -                5,157
         Amortization of loan discounts                                                   (12,944)          (15,961)
         (Gain) loss on sale of other real estate owned                                  (107,643)            1,153
         Changes in:
           Accrued interest receivable                                                    162,706            39,907
           Accrued interest payable                                                       (74,006)           70,683
           Other liabilities                                                              (84,749)          (82,092)
           Federal income tax payable                                                        -              (73,810)
           Other, net                                                                      16,346            12,506
                                                                                      -----------       -----------
                  Net cash provided by operating activities                             1,604,596         1,372,263
                                                                                      -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in mortgage and interim construction
       loans and church bonds                                                          (6,986,744)      (11,023,982)
     Payments received on mortgage and interim
       construction loans and church bonds                                             15,726,446         9,672,217
     Advances of notes receivable                                                         (30,151)         (185,105)
     Payments received on notes receivable                                                126,096           369,293
     Proceeds from sale of other real estate owned                                        360,112           144,349
     Additional investment in other real estate owned                                        -              (30,074)
                                                                                      -----------       -----------
                  Net cash provided (used) by investing activities                      9,195,759        (1,053,302)
                                                                                      -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES
     Borrowings on notes payable                                                       11,837,481        13,962,778
     Principal payments on notes payable                                              (21,962,740)      (13,404,135)
     Cash dividends paid                                                                 (770,089)         (840,097)
     Other                                                                                (90,926)             -
                                                                                      -----------       -----------
                  Net cash used by financing activities                               (10,986,274)         (281,454)
                                                                                      -----------       -----------
                  Increase (decrease) in cash and cash equivalents                       (185,919)           37,507
CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                                                                  273,432           134,889
                                                                                      -----------       -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                            $    87,513       $   172,396
                                                                                      ===========       ===========
Supplemental disclosure of cash flow information
     Cash paid during the period for interest                                         $   529,621       $   400,272
                                                                                      ===========       ===========
     Real estate acquired through foreclosure                                         $   148,214       $   515,585
                                                                                      ===========       ===========`

These 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- KSB 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 September 30, 2003 and 2002, were as follows:

`Mortgage and interim
                                            construction loan and             Total            Net interest
                                            church bond portfolio          indebtedness         rate margin
                                            ---------------------          ------------        ------------
         September 30, 2003                         7.35%                     3.00%                4.35%
         September 30, 2002                         8.87%                     3.75%                5.12%`

#### NOTE 3 - Contractual Maturities

Scheduled  principal  payments on mortgage  loans,  church bonds and interim  construction  loans and  indebtedness
(including  notes payable)  outstanding at  September 30,  2003, for the five  twelve-month  periods  subsequent to
September 30, 2003, follow:

`Twelve-month period                Mortgage loans, church bonds
                 ending September 30,               and interim construction loans            Indebtedness
                 --------------------               ------------------------------           ---------------
                        2004                                 $ 8,573,812                      $ 22,245,455
                        2005                                   2,291,463                              -
                        2006                                   2,362,926                              -
                        2007                                   2,467,138                              -
                        2008                                   2,414,444                              -`

-4-

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|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 $3,175,443 and $2,404,097 at September 30,  2003 and 2002,  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  $78,000
and $74,000 for the six-month periods ended  September 30,  2003 and 2002,  respectively.  Interest income actually
recognized during 2003 and 2002 was approximately $35,000 and $16,000, respectively.

#### NOTE 5 - SECURITIES OFFERING

This information is an integral part of the accompanying
condensed financial statements.
-5-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Notes to Condensed Financial Statements (Unaudited)

Item 2. Managements' Discussion and Analysis or Plan of Operation.

#### Forward-looking Statement Disclaimer

The following  Management's  Discussion  and Analysis  includes  forward-looking  statements  within the meaning of
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 herein 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.   Such  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 the following:

- Competition in the business of making loans to churches;
- A decline in the general economic conditions;
- A decline in real estate values thereby affecting the value of the collateral securing the loans made by the Trust;
- A rise in interest rates resulting in higher cost of funds to the Trust prior to the re-pricing of the loans owing to the Trust;
- Inability of the Trust to borrow funds and at reasonable rates of interest;
- General risks of lending;
- Change in federal or state laws affecting the Trust's 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 herein.

#### Results of  Operations-Three-month  period  ended  September  30,  2003 as  compared to  three-month  period  ended
September 30, 2002

Our 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.   During the three-month period ended September 30, 2003, interest income
and fees increased by $32,602 (3%) over the  three-month  period ended  September 30, 2002.    Interest and fees on
mortgage loans,  church bonds and interim loans actually  decreased  during the three-month  period ended September
30, 2003 as compared to the  three-month  period ended  September 30, 2002 by $69,586.  This decrease was offset by
an increase in interest on temporary investments of $102,188.

-6-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

Interest  earned on temporary  investments  was $169,364 for the  three-month  period ended  September  30, 2003 as
compared to $67,176 for the  three-month  period ended  September 30, 2002,  an increase of $102,188 or 152%.  This
increase  was  attributable  to the  recognition  of  interest  income as a result of the sale or payment of church
bonds held by the Trust.

The increase in interest  income and fees during the  three-month  period ended  September  30, 2003 as compared to
the  three-month  period  ended  September  30,  2002 was offset by a decrease  in the  interest  rates on our loan
portfolio.  The average  interest rate on our loans and church bonds  decreased from 8.87% as of September 30, 2002
to 7.35% as of September 30, 2003.

There was a decrease in the amount of our  performing  interim loans from  $15,213,224 as of September 30, 2002, to
$6,384,531  as of September  30, 2003.  There was an increase in  performing  mortgage  loans and church bonds from
$30,211,374  as of September 30, 2002 to  $35,761,635  as of September 30, 2003. In addition,  nonperforming  loans
increased  from  $2,404,097 as of September 30, 2002 to $3,175,443 as of September 30, 2003.  The total  performing
and  nonperforming  mortgage  loans,  church bonds and interim loans held by Church Loans  decreased  slightly from
$47,828,695 as of September 30, 2002 to $45,321,609 as of September 30, 2003.

Our net income for the three-month  period ended  September 30, 2003 was $712,105 ($.10 per share),  an increase of
$65,186  (10.0%) as compared to the three-month  period ended  September 30,  2002. This increase was  attributable
to an increase in net  interest  income and an  increase  in other  income.  Net  interest  income  increased  from
$855,293  for the  three-month  period  ended  September  30, 2002 to $939,494  for the  three-month  period  ended
September 30, 2003, an increase of $84,201  (9.8%).  Other income  increased from $895 for the  three-month  period
ended September 30, 2002 to $12,791 for the three-month period ended September 30, 2003, an increase of $11,896.

The increase in our net interest  income for the  three-month  period ended  September  30, 2003 as compared to the
three-month  period  ended  September  30, 2002 was  contributed  to by a decrease  in our  interest  expense.  The
weighted  average  interest rate on our debt decreased from 3.75% as of September 30, 2002 to 3.00% as of September
30, 2003. As a result,  our interest  expense  decreased from $240,396 for the  three-month  period ended September
30, 2002 to $188,797 for the three-month period ended September 30, 2003, a decrease of $51,599 or 21.5%.

Management  performs a monthly  evaluation  of the  adequacy of the loan loss  reserve.  Based on this  evaluation,
they have determined a provision for loan loss is not considered necessary.

Nonperforming  loans,  church  bonds and interim  loans  increased  from  $2,404,097  as of  September  30, 2002 to
$3,175,443  as of  September  30, 2003,  an increase of  $771,346.  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  $78,000  and  $74,000 for the  six-month
periods ended September 30, 2003 and 2002, respectively.

General and  administrative  expenses  increased from $169,762 for the three-month  period ended September 30, 2002
to $226,140 for the three-month period ended September 30, 2003, an increase of $56,378 or 33.2%.

-7-

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

#### Results of  Operations-Six-month  period ended  September 30, 2003 as compared to six-month  period ended September
30, 2002

During the six-month  period ended  September 30, 2003,  interest income and fees increased by $209,314 (9.2%) over
the  six-month  period  ended  September  30, 2002.  This  increase was  primarily  attributable  to the receipt of
interest  income on a mortgage  loan held on the cash basis,  an increase in  commitment  fees earned and  interest
earned on temporary investments.

During the six-month  period ended  September 30, 2003, we recognized  $43,007 in interest  income from the payment
of a loan that was held on the cash basis.

Commitment  fees earned during the six-month  period ended  September 30, 2003 as compared to the six-month  period
ended  September  30, 2002,  increased by $57,736.  This  increase  was  primarily  the result of the payoff of two
loans prior to maturity  resulting in the immediate  recognition of the unearned  commitment fees relative to these
two loans.

Interest  earned on temporary  investments  was  $305,006 for the  six-month  period  ended  September  30, 2003 as
compared to $131,878 for the  six-month  period ended  September  30, 2002,  an increase of $173,128 or 131%.  This
increase was  attributable  to the  recognition  of interest  income as the result of the sale or payment of church
bonds held by the trust.

The  increase in interest  income and fees for the  six-month  period ended  September  30, 2003 as compared to the
six-month  period ended  September 30, 2002 was offset by a decrease in the interest  rates on our loan  portfolio.
As mentioned  above,  the average  interest rate on our loans and church bonds decreased from 8.87% as of September
30, 2002, to 7.35% as of September 30, 2003.

Our net income for the six-month period ended September 30, 2003, was $1,704,886  ($.24 per share),  an increase of
$290,166  (20.5%) as compared to the six-month period ended  September 30,  2002. This increase was attributable to
an  increase  in net  interest  income  and an  increase  in other  income.  Net  interest  income  increased  from
$1,802,993  for the  six-month  period ended  September 30, 2002,  to  $2,027,648  for the  six-month  period ended
September  30, 2003,  an increase of $224,655  (12.5%).  Other  income  increased  from  $14,212 for the  six-month
period ended  September  30, 2002, to $135,542 for the  six-month  period ended  September 30, 2003, an increase of
$121,330  (853.7%).  This  increase  was  primarily  the result of the sale of  property  acquired  by us through a
foreclosure of a nonperforming loan.  This sale resulted in a gain of $107,643.

General and  administration  expenses  increased from $348,302 for the six-month period ended September 30, 2002 to
$429,294 for the  six-month  period ended  September  30, 2003,  an increase of $80,992  (23.3%).  This increase is
primarily  attributable  to an  increase  in  payroll  expense  due to adding an  additional  employee  during  the
six-month period ended September 30, 2003, and an increase in insurance expense.

-8-

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

#### Financial Condition   September 30, 2003 as compared to March 31, 2003

Our  performing  mortgage  loans and church  bonds  increased  slightly  from  $35,689,239  as of March 31, 2003 to
$35,761,635  as of September 30, 2003.  However,  our portfolio of performing  interim loans  decreased  during the
six-month  period  ended  September  30,  2003 from  $15,672,768  to  $6,384,531,  a decrease of  $9,288,237.  This
decrease  was  primarily  attributable  to the payoff of one  interim  loan in the amount of  $7,700,000.  Mortgage
loans,  interim loans and church bonds held by us decreased  from  $54,196,581  as of March 31, 2003 to $45,321,609
as of September 30, 2003, a decrease of $8,874,972 (16.4%).

Our  liabilities  decreased from  $33,666,609 as of March 31, 2003 to $23,382,594 as of  September 30,  2003.  This
decrease was primarily  attributable  to the  application  of the proceeds of the payoff of the interim loan in the
amount of $7,700,000 mentioned above to the reduction of our line of credit owing to the Amarillo National Bank.

In June 2003, we added one full-time  employee,  Josh Shields.  Mr.  Shields is 25 years of age and  previously was
employed  from  January 2000 through May 2003 with Wells Fargo Bank in  Amarillo,  Texas  (previously  known as The
First National Bank of Amarillo).  Mr. Shields serves as a  Vice-President  of Church Loans and works  primarily in
the area of the marketing loan services and underwriting of loans for Church Loans.

Pursuant to authority  granted by our Board of Trust  Managers,  on Tuesday,  June 3, 2003, the Strategic  Planning
Committee  of the  Board of Trust  Managers  authorized  management  to  proceed  to  register  an  offering  of an
additional  7,000,000  shares of  certificates  of  beneficial  interest  in  Church  Loans at a price of $3.00 per
share.  On June 26,  2003 the Board of Trust  Managers  formally  authorized  such  offering  and SEC Form S-11 was
filed with the SEC on July 3,  2003.  This  offering  became  effective  with the SEC on August  14,  2003.  We are
presently  responding to the comments of the various states that we have also registered  such offering.  It is our
intent to continue to pursue such  registration.  We  anticipate  beginning  the sale of shares  registered by this
offering sometime during the third fiscal quarter of this year.

#### Liquidity and Capital Resources

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.  At  March  31,  2003,  we  had  five  loans  to two  different  borrowers  that  are  secured  by
assisted-living  centers,  which  totaled  approximately  $7,961,000.  Three  of  these  loans  were to  affiliated
borrowers  totaling  approximately  $1,660,000  and with the  remaining  two  loans to  another  borrower  totaling
approximately $6,301,000.

-9-

---

|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

#### Liquidity and Capital Resources (Continued)

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,  and the payment  for legal and  accounting  services.  Substantially  all of our assets are  invested in
permanent  and  interim  loans.  Our only  potential  liquidity  problems  are  related  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  which  totaled  approximately  $3,000,000  at September  30, 2003.  All of our  indebtedness  is
generally  classified  as short term having  maturities  ranging  from "on  demand" to  maturities  repayable  over
various periods extending through fiscal 2004.

All of the debt  obligations of the Trust  outstanding as of September 30, 2003, in the amount of $22,245,455  will
mature in fiscal  2004.  These debt  obligations  primarily  consist  of our bank line of credit  and  Master  Note
Agreements.  As of April 14,  2003,  we  modified  our loan  agreement  with the  Amarillo  National  Bank  thereby
increasing  the line of credit  from  $24,000,000  to  $35,000,000.  Although  the bank line of credit  matures  in
fiscal  2004,  it is  anticipated  that the line of credit  will be  renewed  annually.  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 all of our real
estate lien notes which are pledged to secure the bank line of credit.

At September 30, 2003,  loans to the Trust under Master Note  Agreements,  which are in effect demand notes,  total
$14,870,455.  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.

At September  30,  2003,  the balance  which could be borrowed by us upon our bank line of credit was  $27,625,000.
The principal  payments  scheduled to be received by us upon our loan portfolio for the twelve-month  period ending
September  30,  2004 and  2005  are  $8,573,812  and  $2,291,463,  respectively.  Assuming  all of these  scheduled
principal  payments are received,  these  payments,  together with the balance  available to us on our bank line of
credit,  would provide us with sufficient funds to meet our maturing  obligations and fund loan commitments without
the necessity of borrowing funds from other sources.

As mentioned  above, we obtained an increase in our bank line of credit from  $24,000,000 to $35,000,000  effective
April 14, 2003.  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.

-10-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

#### Liquidity and Capital Resources (Continued)

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 our mortgage  loan  portfolio  in order for it to meet all of its  financial  obligations.  At September
30,  2003,  the  principal  balance of our loan and church  bond  portfolio  was  $45,321,609,  net of  unamortized
purchase  discounts.  The weighted  average  interest  rate on loans and church bonds was 7.35% 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  $27,759,486,  $23,793,843,  and  $20,819,613,
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  during the  twelve-month  period
ending  September  30,  2004  and  2005,  if not used to fund new loan  commitments,  would be used to  reduce  the
outstanding  indebtedness  of the Trust.  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.

As of September 30, 2003, a substantial  portion of the promissory  notes evidencing the loans made by us have been
pledged to secure our bank line of credit.  Promissory  notes totaling  $30,370,889  were pledged  against the bank
line of credit which had a total  outstanding  balance of  $7,375,000.  The required  collateral for this bank loan
was  $8,112,500,  leaving  an excess of  promissory  notes  which have been  pledged  to secure  said bank notes of
$22,258,389.  These excess  promissory  notes may be  reassigned  by the bank to us to be sold in order to meet our
financial  obligations.  Should it be  necessary,  in order to meet our financial  obligations,  these excess notes
amounting to $22,258,389 and other  additional  promissory  notes in the amount of $14,870,455  (for a total amount
of  $37,128,844)  would be available to be sold to meet our  financial  obligations.  Should the excess  promissory
notes be assigned by the bank to us as heretofore  described,  the bank line of credit would continue to be secured
by the  required  ratio  of  notes  pledged  to the  principal  balance  of the bank  line of  credit.  There is no
assurance that we would be able to sell all, or any portion of, these notes.

-11-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

#### Liquidity and Capital Resources (Continued)

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.  Although there was an increase in the amount of nonperforming  loans as of September 30, 2003,  compared to
September  30, 2002,  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 September  30, 2003,  the weighted  average  interest  rate on our mortgage  loan and church bond  portfolio was
7.35% per annum while the weighted  average  interest rate upon all our borrowings was 3.00% 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  prime  rate of
interest  charged by major banking  institutions  and,  therefore,  is subject to  fluctuation.  During  periods of
inflation,  the prime 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  indebtedness  remain  constant,
and should the weighted  average interest rate upon the  indebtedness  increase to approximately  14.97% per annum,
the interest income and the interest expense of the Trust would be substantially equal.

#### Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements or commitments other than our normal loan commitments.

-12-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

Item 2. Managements' Discussion and Analysis or Plan of Operation. (Continued)

#### 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.  Controls and Procedures

The Trust's  chief  executive  officer and its senior vice  president  are charged with making an evaluation of the
Trust's  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.  The  Trust's  chief
executive  officer and senior vice  president  have  concluded,  based upon their  evaluation of these controls and
procedures as of September 30, 2003, that the Trust's disclosure controls and procedures are effective.

There  have  been no  significant  changes  in the  Trust's  internal  controls  or in  other  factors  that  could
significantly affect these controls subsequent to the date of their evaluation.

-13-

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|CHURCH LOANS & INVESTMENTS TRUST
|--------------------------------
|(A Real Estate Investment Trust)

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders:

The  annual  meeting  of  shareholders  of the  Trust  was  held on July 18,  2003.  At such  meeting,  each of the
individuals  named  below was  elected to the Board of Trust  Managers  of the Trust to serve until the next annual
meeting of the shareholders of the Trust:

`Number of shares
                                                          For                    Against
                                                          ---                    -------
       Bill R. McMorries                               3,691,229                   9,238
       Larry Brown                                     3,692,039                   8,428
       Jack R. Vincent                                 3,691,229                   9,238
       Steve Rogers                                    3,692,433                   8,034
       Mike Bahn                                       3,692,433                   8,034
       Terry Hays                                      3,689,021                  11,446
       Alfred J. Smith                                 3,692,039                   8,428
       Mike Borger                                     3,692,433                   8,034`

Additionally,  shareholders  voted to ratify  Clifton  Gunderson LLP as auditors for the year ending March 31, 2004
as follows:

`For                                             3,673,553
       Against                                             4,772
       Abstain                                            22,142`

However,  on October 28,  2003,  Mr. Terry Hays  resigned as a member of the Board of Trust  Managers of the Trust.
Mr. Hays has communicated to the Trust that his resignation was not due to any  disagreement  with the Trust on any
matter  relating to the Trust's  operations,  policies or  practices.  A copy of a letter from Mr. Hays  confirming
such is enclosed as Exhibit 17.

Item 6(a) Exhibits:

| | Exhibit 17 -  Letter
                                           of Resignation as a Member of the
                                           Board of Trust Managers from Mr.
                                           Terry Hays.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Exhibit 31.1 -  Certification
  by the  President and CFO Pursuant to Section 302 of the  Sarbanes-Oxley  Act
 and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934                                            
|
| | Exhibit 31.2 -  Certification
 by the Senior Vice  President  Pursuant to Section 302 of the  Sarbanes-Oxley
 Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934                                         
|
| | Exhibit 32.1 -  Certification
 Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002 - President & CFO                                                                         
|
| | Exhibit 32.2 -  Certification
Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 - Senior Vice President                                                                     

-14-

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# 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



|By | /s/ B. R. McMorries
         ______________________________
                 B. R. McMorries, Chairman | Dated: November 12, 2003 | 
|-- | ------------------------------------------------------------------------------------------------------ | ------------------------ | 



|By | /s/ Kelly Archer
         ______________________________
                 Kelly Archer
                 Chief Financial Officer | Dated: November 12, 2003 | 
|-- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | 

-15-

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# CHURCH LOANS & INVESTMENTS TRUSTEXHIBIT INDEX

|ExhibitNumber | Description                                                                                                                                                            | Page
|------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Exhibit 17    | Letter of Resignation as a Member of the Board of Trust Managers from Mr. Terry Hays                                                                                   | 17  
|Exhibit 31.1  | Certification by the President and CFO Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934     | 18  
|Exhibit 31.2  | Certification by the Senior Vice President Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 | 19  
|Exhibit 32.1  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 - President & CFO                     | 20  
|Exhibit 32.2  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 - Senior Vice President               | 21  

-16-

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