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# FORM 10-KSB

# SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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| | [ X ] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934     
| | ----- | -----------------------------------------------------------------------------------
|
| |       | For the Fiscal Year Ended March 31, 2002                                           
|
| | [   ] | TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
| |       | For the transition period from  to  .                                              
|

Commission File No. 08117

CHURCH LOANS & INVESTMENTS TRUST
(Name of small business issuer in its charter)

| | Texas                                                                    |  | 75-6030254                       
| | ------------------------------------------------------------------------ |  | ---------------------------------
| | (State or other jurisdiction of
incorporation or organization)           |  | (IRS Employer
Identification No.)
| |                                                                          | 
| | 5305 I-40 West, Amarillo, Texas
(Address of principal executive offices) |  | 79106
(Zip Code)                 

(806) 358-3666
(Issuer's telephone number)



Securities
registered pursuant to Section 12(b) of the Exchange Act: None

Securities  registered pursuant to Section 12(g) of the Exchange
Act: Shares of Beneficial Interest



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

# 

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registrant    was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes  X   
   No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  of Part III of this Form  10-KSB or any
amendment to this Form 10-KSB.  [ X ]

Issuer's revenues for its most recent fiscal year: $5,291,814.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant is $20,047,424 as of June 12, 2002.

The  number of shares  outstanding  of each of the  issuer's  classes  of common
stock,   as  of   March   31,   2002   is   7,000,806   shares   of   beneficial
interest.

Documents Incorporated by Reference:

Portions of the Annual Report to Shareholders for the year ended March 31, 2002,
are incorporated by reference into Parts II and III.

Exhibits  3(a) and 3(b)  included  in Form  S-11  under  File  No.  2-51235  are
incorporated by reference into Part III.

# -2-

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# TABLE OF CONTENTS
INDEX
FORM 10-KSB ANNUAL REPORT - 2002
CHURCH LOANS & INVESTMENTS TRUST

|Part I.   |                                                                                                                 | Page
|--------- | --------------------------------------------------------------------------------------------------------------- | ----
|Item 1:   | Description of Business                                                                                         | 4   
|Item 2:   | Description of Property                                                                                         | 6   
|Item 3:   | Legal Proceedings                                                                                               | 6   
|Item 4:   | Submission of Matters to a Vote of Security Holders                                                             | 6   
|Part II.  |                                                                                                                 |     
|Item 5:   | Market for Common Equity and Related Stockholder Matters                                                        | 7   
|Item 6:   | Management's Discussion and Analysis or Plan of Operation                                                       | 8   
|Item 7:   | Financial Statements                                                                                            | 14  
|Item 8:   | Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure                            | 14  
|Part III. |                                                                                                                 |     
|Item 9:   | Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act | 14  
|Item 10:  | Executive Compensation                                                                                          | 15  
|Item 11:  | Security Ownership of Certain Beneficial Owners and Management                                                  | 16  
|Item 12:  | Certain Relationships and Related Transactions                                                                  | 17  
|Item 13:  | Exhibits and Reports on Form 8-K                                                                                | 18  

# -3-

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# PART I

## Item 1 - DESCRIPTION OF BUSINESS

Church  Loans  &  Investments  Trust  ("the  Trust")  is a real  estate
investment  trust  organized under the laws of the State of Texas in March 1963.
Although  the Trust has the  authority  to engage  in the  business  of  buying,
selling and leasing of real  estate,  the Trust has  heretofore  restricted  its
business  activities  primarily to making loans to churches and other  nonprofit
organizations  and assisted living centers which are secured by a first mortgage
on real estate owned by such borrowers.

The period of duration of the Trust, unless dissolved in accordance with law,
or by the consent of the owners of shares of  beneficial  interest in the Trust,
is  perpetual.  The Trust may be dissolved by the  affirmative  vote of not less
than two-thirds of the owners of outstanding shares of the Trust.

The control and management of the Trust properties,  and all powers necessary
or  appropriate  to effect  any and all of the  purposes  for which the Trust is
organized, is vested in the Board of Trust Managers.

The number of shares of  beneficial  interest in the Trust which the Trust is
authorized to issue is unlimited.

The Trust is qualified as a "real  estate  investment  trust" under  Sections
856-858 of the Internal  Revenue Code of 1986 as amended (the "Internal  Revenue
Code" or "Code").  It is the  intention of the Trust to continue to qualify as a
real estate investment trust under the Code.

The Trust maintains an office located at 5305 I-40 West,  Amarillo,  TX 79106
(telephone 806/358-3666).

As mentioned above, the Trust is primarily  engaged in the business of making
mortgage loans to churches and other nonprofit organizations and assisted living
centers.  The  Declaration  of Trust  restricts the  investments of the Trust to
loans  secured by a first  mortgage,  deed of trust or other lien  covering real
property with the amount of such loans not to exceed 66 2/3% of the value of the
real  property  securing  such loan as  determined  by a  competent  independent
appraiser.  Although  the Trust has been  primarily  in the  business  of making
long-term  mortgage  loans,  during  the past  several  years  it has also  been
actively involved in making short-term  interim or construction loans to finance
the  construction  of church  buildings,  the  construction  of assisted  living
centers,   the  purchase  of  real  estate,   or  the  refinancing  of  existing
indebtedness.  Most of the interim loans  presently

# -4-

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being made by the Trust are  associated  with bond  offerings of churches and
other nonprofit  organizations and assisted living centers.  These interim loans
are scheduled to be repaid from the proceeds of the bond offerings.

The Trust is not limited to the  location of the property  securing any loans
in which it may  invest  and seeks to  spread  its  investments  in areas of the
United States where favorable yields prevail.

As of March 31, 2002,  the Trust has 96 permanent and interim  mortgage loans
and investments in church bonds having a principal balance of $47,152,630,  with
the average principal amount thereof

being  $491,173.  The  interest  rates on these loans vary from 5% to 13% per
annum with the weighted average interest rate of mortgage loans and church bonds
being 9.14% per annum at March 31, 2002.

The  original  terms of these loans vary from one year to thirty years,  with
the majority being for a term of twenty years.

During the fiscal year of the Trust ending March 31, 2002,  the net income of
the Trust was $3,281,795,  as compared to $2,628,232 in fiscal 2001, an increase
of 24.87%.  Such  increase  in net income of the Trust was due to an increase in
the Trust's net interest income.  Net interest income of the Trust was higher in
fiscal 2002 as compared to fiscal 2001 due to several  reasons,  including:  (a)
the  payment  of  several  loans  owing  to  the  Trust  that  were   previously
characterized as  non-performing,  and (b) a decrease in interest expense of the
Trust.

The net income of the Trust for each of the quarters  during  fiscal 2002 was
as  follows:   first  quarter-  $1,022,375;   second   quarter-$841,286;   third
quarter-$763,890; and fourth quarter-$654,244.

The  operational  expense of the Trust  increased from $731,524 during fiscal
2001 to $785,512 in fiscal 2002. The  operational  expense of the Trust included
general and administrative  expenses and compensation to members of the Board of
Trust Managers.

During  fiscal 2002,  the Trust  advanced loan proceeds of  $32,691,886 on 29
interim  loans and 6  permanent  loans.  Most,  if not all,  of such  loans bear
interest at a variable  rate  varying from 1.5% to 2% per annum in excess of the
prime rate of interest  published  by the Wall  Street  Journal and known as the
"Wall Street Journal Prime."

During  fiscal 2002,  the Trust employed a total of 5 full time employees and
employed, as needed, three additional part-time employees.

The  business  conditions  in which  the  Trust  operates  has  become  more
competitive in the past fiscal year as more and more banks are  re-entering  the
business of making loans to churches, especially the more desirable, less risky,
church loans.  If this trend  continues,  the rates and fees which the trust can
charge may  decrease.  However,  loan demand  remains

# -5-

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good as  evidenced by the number of loan  requests  received by the Trust and
the number of loan commitments outstanding as of March 31, 2002.

## Item 2 - DESCRIPTION OF PROPERTY

The Trust maintains as its only place of business its offices located at 5305
I-40  West,  in  Amarillo,  Texas.  Such  building  is owned by the Trust and is
occupied  solely by the  Trust.  There is no debt owed by Trust in regard to its
real property.

The real  properties of the Trust,  net of  depreciation  and excluding real
estate  acquired  through  foreclosure,  are not a  significant  portion  of the
Trust's assets, representing less than 1% of the Trust's total assets.

As  previously  mentioned,  the  Trust's  primary  business  is the making of
mortgage loans to churches and other nonprofit organizations and assisted living
centers.  The  Declaration  of Trust  restricts the  investments of the Trust to
loans secured by a first  mortgage,  deed of trust,  or other lien covering real
property with the amount of such loans not to exceed 66 2/3% of the value of the
real property  securing such loan.  The  Declaration of Trust may not be amended
without the  affirmative  vote of two- thirds  (2/3rds) of the  Certificates  of
Beneficial  Interest  entitled  to vote.  The Board of Trust  Managers'  general
policy is to limit  investment  of Trust assets in any one mortgage  loan to not
more than $2,000,000. However, at the discretion of the Board of Trust Managers,
the  Trust  may make  and has  made  loans in  excess  of such  limit.  All such
investment  in  mortgage  loans is for the  purpose  of  earning  income for the
Trust.

## Item 3 - LEGAL PROCEEDINGS

None

## Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

None

# -6-

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# PART II

## Item 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

# (a) Market Information

There is no  established  public  trading market for the shares of beneficial
interest of the Trust. During fiscal 2002 a total of 210,422 shares were sold in
the secondary  market at prices ranging from $2.90 to $3.06 per share.  The last
sale  during the fiscal year was at $3.00 per share.  During  fiscal year 2001 a
total of 79,901 shares were sold in the secondary  market at prices ranging from
$2.80 to $3.00 per share.

The range of high and low bid information  for shares of beneficial  interest
of  the  Trust  for  each  quarter  within  the  last  two  fiscal  years  is as
follows:

`Quarter              Fiscal 2002     Fiscal 2001
                                       High   Low      High   Low
                  ---------------      ----   ----     ----   ----
                  April-June           2.90   2.90     2.85   2.80

                  July-September       3.00   2.90     2.87   2.80

                  October-December     3.06   2.90     3.00   2.85

                  January-March        3.00   2.90     3.00   2.85`

The  source of the above  information  is the Trust's own records.  The Trust
serves as the Transfer Agent for its own shares.

(b) Holders

At March 31, 2002 there were 2,368 shareholders of the Trust.

(c) Dividends

Cash dividends on all outstanding shares of beneficial  interest in the Trust
are declared twice  annually,  for the 3 month period ending March 31, and the 9
month period ending  December 31. In fiscal 2001, the Trust paid a cash dividend
of $.45 per share.  In fiscal 2002 the Trust paid a total cash  dividend of $.46
per share.

# -7-

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(d) Securities authorized for issuance under equity compensation plans.

None.

(e) Sales of Unregistered Securities.

None.

## Item 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION

Results of Operations 2002 compared to 2001

During the fiscal year ended March 31, 2002,  interest income and fees of the
Trust increased by $377,563 (7.68%) over the previous fiscal year. Such increase
was primarily  attributable to an increase in performing  mortgage loans, church
bonds and interim loans and an increase in net interest rate margin.

The  average  interest  rate on loans  and  church  bonds  held by the  Trust
decreased from 10.28% as of March 31, 2001 to 9.14% as of March 31, 2002.

There was an increase in the amount of  performing  interim loans held by the
Trust from  $11,537,684 as of March 31, 2001 to $15,317,011 as of March 31, 2002
and there was an increase in performing  mortgage  loans and church bonds during
the recent fiscal year from  $25,537,346  as of March 31, 2001 to $30,507,636 as
of March 31, 2002. In addition,  non-performing  loans decreased from $5,655,875
as of March 31, 2001 to  $1,151,907 as of March 31, 2002.  Therefore,  the total
performing and non- performing  mortgage  loans,  church bonds and interim loans
held by the Trust increased from $42,730,905 as of March 31, 2001 to $46,976,554
as of March 31, 2002.  This  increase is partially  the result of an increase in
the  investment  in mortgage and interim  loans made by the Trust during  fiscal
2002 of  $32,691,886  as  compared  to  $30,618,186  during  fiscal  2001.  This
represents an increase of $2,073,700 or 6.77%. The increase in the investment by
the Trust in  mortgage  loans  also  contributed  to an  increase  of $98,318 in
commitment  fees earned by the Trust in fiscal 2002 as compared to fiscal  2001.
The increase in performing  mortgage  loans,  church bonds and interim loans was
offset  by an

increase in the payments received on mortgage and interim  construction loans
and church  bonds from  $24,886,228  for the fiscal year ended March 31, 2001 to
$27,454,632 during the fiscal year ended March 31, 2002.

The net income of the Trust for fiscal 2002 was $3,281,795 ($.47 per share),
an increase of $653,563  (24.87%) from the previous  fiscal year.  Such increase
was primarily  attributable  to an increase in the Trust's net interest  income.
Net interest  income  increased from  $3,344,074 in fiscal 2001 to $4,302,595 in
fiscal 2002, an increase of $958,521 (28.66%) from fiscal 2001.

# -8-

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The interest income of the Trust for the fiscal year ended March 31, 2002 was
significantly influenced by the payment of several loans owing to the Trust that
were previously  characterized  as non-  performing.  The pay-off of these loans
resulted  in an  additional  recognition  of  interest  income of  approximately
$586,000 in fiscal 2002.

The  increase  in the net  income  of the  Trust  for  fiscal  2002  was also
attributable to a decrease in the interest expense of the Trust. In fiscal 2002,
the average aggregate amount of total debt outstanding was $270,756 more than in
fiscal 2001.  However,  the weighted  average interest rate decreased from 8.33%
for the year ended March 31,  2001 to 5.12% for the year ended  March 31,  2002.
The interest  expense of the Trust decreased from $1,568,994 for the fiscal year
ended  March 31, 2001 to $989,219  for the fiscal year ended March 31,  2002,  a
decrease  of  $579,775  or  36.95%.   The  average   month-end  balance  of  the
indebtedness  owing by the Trust increased from  $18,854,370 for the fiscal year
ended March 31, 2001 to  $19,125,126  for the fiscal year ended March 31,  2002.
Such increase was due to an increase in the debt of the Trust resulting from the
increase in the Trust's investment in mortgages and interim loans. The effect on
interest  expense of increased debt was offset by a decrease in the Trust's cost
of funds as previously mentioned.

Income from the  realization of loan discounts from loan purchases  increased
from  $42,033 for the year ended  March 31, 2001 to $264,694  for the year ended
March 31, 2002, an increase of $222,661.

General and administrative  expenses of the Trust increased from $676,149 for
the fiscal year ended March 31, 2001 to $733,957 for the fiscal year ended March
31, 2002, an increase of $57,808 or 8.55%.

Dividends related to fiscal 2002 were $3,360,387 or $.48 per share. Dividends
are based on  taxable  income  which  varies  from net  income  reported  in the
financial statements because of temporary  differences  (differences between the
tax basis of an asset or  liability  and its  reported  amount in the  financial
statements  that will result in taxable or deductible  amounts in future years).
Future  dividends  may be more or less  than  the  net  income  reported  in the
financial statements because of variances in these temporary differences.

During  fiscal 2002,  the prime  interest rate  decreased  from 8.00% at the
beginning  of the fiscal year to 4.75% at the close of the fiscal  year.  Should
the prime interest rate decrease during fiscal 2003, the interest expense of the
Trust will  generally  decrease  and the net income of the Trust will,  in turn,
generally increase.  Should the prime interest rate increase during fiscal 2003,
the interest expense of the Trust will generally  increase and the net income of
the Trust will, in turn, generally decrease.

Gain  on the  sale  of  properties  which  the  Trust  had  obtained  through
foreclosure  was  $180,662  for fiscal  2001 as compared to gain of the sales of
foreclosed properties in fiscal

# -9-

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2002 of $0. Therefore,  other income of the Trust decreased from $200,452 for
fiscal 2001 to $32,203 for fiscal 2002.

Liquidity and Capital Resources

The  Trust is 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,  2002,  the Trust had five loans to two
different  borrowers  which are secured by assisted living centers which totaled
approximately  $8,042,000.  Three of these  loans were to  affiliated  borrowers
totaling  approximately  $1,672,000  and with the remaining two loans to another
borrower totaling approximately $6,370,000.

The assets of the Trust primarily consist of its loan portfolio,  real estate
acquired  through  foreclosure  and its  office  building  and  facilities.  The
operational  expense of the Trust is comprised of the  maintenance of its office
building,  the payment of the  salaries  of its  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 the  Trust  assets  are
invested  in the  permanent  and  interim  loans  made by the  Trust.  The  only
potential  liquidity  problems of the Trust are related to the timely and proper
repayment by the Trust of the  leveraged  funds it has borrowed to make loans in
excess of its  capital and the ability to fund loan  commitments  which  totaled
approximately $9,959,000 at March 31, 2002. All of the indebtedness of the Trust
is generally classified as short term having maturities ranging from "on demand"
to maturities repayable over various periods extending through fiscal 2003.

All of the debt obligations of the Trust  outstanding as of March 31, 2002 in
the amount of  $25,854,555  will mature in fiscal 2003.  These debt  obligations
primarily consist of the Trust's bank line of credit and Master Note Agreements.
Although  the  Trust's  bank  line of  credit  matures  in  fiscal  2003,  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,  the Trust 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 real
estate  lien  notes of the Trust  which are  pledged  to secure the bank line of
credit.

Previously,  the Trust issued Secured Savings Certificates  ("Certificates").
However,  effective July 1997 the Trust  discontinued  the sale of Certificates.
All  previously  issued  Certificates  were  paid in full  prior  to  March  31,
2001.

At March 31, 2002 loans to the Trust under Master Note Agreements,  which are
in effect demand notes, total  $15,194,555.  In the past, the Trust has utilized
its bank line of credit and the principal paid to the Trust upon its outstanding
loan portfolio, and the proceeds received from the sale of Certificates in order
to meet its maturing obligations.

# -10-

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At March 31, 2002, the balance which could be borrowed by the Trust upon its
bank line of credit was  $4,340,000.  The  principal  payments  scheduled  to be
received by the Trust upon its loan  portfolio  for the years  ending  March 31,
2003 and 2004 are  $16,762,703  and  $1,596,543,  respectively.  Assuming all of
these scheduled principal payments are received,  these payments,  together with
the balance available to The Trust on its bank line of credit, would not provide
The Trust with sufficient funds to meet its

maturing  obligations and fund loan commitments  without the necessity of The
Trust either  selling  additional  Certificates  or  borrowing  funds from other
sources.

Due to the cost of registration and the other costs of sales of Certificates,
the cost of these funds are normally higher than the cost of borrowing from bank
sources or master notes.  Therefore,  the Trust discontinued the registration of
Certificates and ceased the sales of Certificates as of July 16, 1997. The Trust
also  obtained  an  increase  in its bank line of  credit  from  $10,000,000  to
$15,000,000  effective September 1, 1997. Based upon the success of the Trust to
obtain  borrowings  in the  past,  the  Trust is  confident  that,  should it be
necessary,  it  will be  able  to  register  and  sell  Certificates  or  obtain
additional  bank financing in the future in sufficient  amounts for the Trust to
timely meet all of its obligations.

Should all the scheduled  principal payments upon loans made by the Trust not
be  received,  and  should  the Trust be unable  to borrow  against  its line of
credit,  and should borrowings from other sources not be available,  it would be
necessary  for the Trust to sell a portion of its  mortgage  loan  portfolio  in
order for it to meet all of its financial  obligations.  At March 31, 2002,  the
principal  balance  of the loan and  church  bond  portfolio  of the  Trust  was
$46,976,554.  The weighted  average  interest rate on loans and church bonds was
9.14% per annum. In view of the normal  marketability of conventional loans, the
Trust  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
$35,780,475,  $30,668,979, and $26,835,356,  respectively. There is no assurance
that the Trust  would be able to sell all,  or a portion  of, its  portfolio  of
loans,  in which event, it would be necessary for the Trust to secure a loan, or
loans,  from a lender in order for the Trust to meet its financial  obligations.
There is no  assurance  that the  Trust  would be able to  secure a loan in such
instance.  The  Trust  has sold  only  one of the  loans  in its  mortgage  loan
portfolio and, therefore, has limited experience in this area.

Principal  payments  scheduled to be received by the Trust upon its permanent
loan  portfolio  during the years ending March 31, 2003 and 2004, if not used to
fund new loan commitments,  would be used to reduce the outstanding indebtedness
of the Trust.  Should the Trust use the  payments  of  principal  which shall be
received upon its loan  portfolio to reduce its  outstanding  indebtedness,  the
interest  expense of the Trust 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 by the
Trust upon its mortgage  loan  portfolio  is  generally  based upon a fixed rate
of

# -11-

---

interest or a variable rate of interest that periodically reprices, while the
interest  to be paid by the Trust upon its  outstanding  debts is  directly,  or
indirectly,  tied to the  prime  rate of  interest  charged  by  major  domestic
banks.

As  of  March  31,  2002,  a  substantial  portion  of the  promissory  notes
evidencing  the loans made by the Trust have been  pledged to secure the Trust's
bank line of credit.  Promissory notes totaling $12,617,124 were pledged against
the bank line of credit which had a total  outstanding  balance of  $10,660,000.
The required collateral for this bank loan was $11,726,000, leaving an excess of
promissory  notes which have been pledged to secure said bank notes of $891,124.
These excess  promissory  notes may be reassigned by the bank to the Trust to be
sold in order  for the  Trust to meet its  financial  obligations.  Should it be
necessary,  in order  for the  Trust to meet its  financial  obligations,  these
excess notes amounting to $891,124 and other additional  promissory notes in the
approximate  amount of $34,359,430 (for a total amount of $35,250,554)  would be
available to be sold by the Trust to meet its financial obligations.

Should  the excess  promissory  notes be assigned by the bank to the Trust 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 the Trust would be able to sell all, or any
portion of, these notes.

Cash flows from operating  activities  consists  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.  In fact,  there was a decrease in the
amount of non-performing  loans as of March 31, 2002 compared to March 31, 2001.
Accordingly,  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 the
success of the Trust to obtain  borrowings  in the past,  the Trust is confident
that it will be able to obtain  borrowings in the future in sufficient  amounts,
along with  payments to be received  on loans,  to timely meet its  obligations.
Furthermore,  the Trust is confident  that if it decides to register  additional
Certificates  in the  future,  it would have  similar  success  in  selling  the
Certificates as it has had in the past.

# -12-

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Inflation

At March 31, 2002,  the weighted  average  interest rate on the mortgage loan
and church bond  portfolio  of the Trust was 9.14% per annum while the  weighted
average  interest  rate upon all  borrowings  of the Trust was 3.75% per  annum.
Although a majority of the loans  constituting  the loan  portfolio of the Trust
have been made at  variable  rates of interest  that  generally  reprice  either
daily, annually, or otherwise periodically,  a portion of the loans constituting
the  Trust's  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 the indebtedness of the Trust 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 the interest  expense of the Trust
would  increase.  Since the  interest  income of the Trust would not increase as
rapidly, an increase in the interest expense of the Trust would decrease the net
income of the Trust.  However,  interest income should subsequently  increase as
variable  rate loans  reprice.  Should the amount of the loans and the amount of
the indebtedness of the Trust remain  constant,  and should the weighted average
interest rate upon the indebtedness  increase to approximately 16.61% per annum,
the interest income and the interest expense of the Trust would be substantially
equal.

New Accounting Standards

On April 1, 2001,  the Trust adopted  Financial  Accounting  Standards  Board
Statement  No.  133,   Accounting  for  Derivative  Instruments  and  Hedging
Activities.  The adoption of the new standard did not have a material impact
on the Trust's financial statements.

In June 2001, the Financial  Accounting  Standards Board issued Statements of
Financial Accounting Standards No. 141,  Business  Combinations,  and No.
142,  Goodwill and Other  Intangible  Assets,  effective for fiscal years
beginning after December 15, 2001. Under the new rules,  goodwill and intangible
assets deemed to have  indefinite  lives will no longer be amortized but will be
subject to annual  impairment  tests in accordance  with the  Statements.  Other
intangible assets will continue to be amortized over their useful lives.

The  Trust  will apply the new rules on  accounting  for  goodwill  and other
intangible  assets  as of  April 1,  2002.  Application  of the  nonamortization
provisions of the  statement  will not have an effect on net income as the Trust
currently has no goodwill or other intangibles.

# -13-

---

## Item 7: FINANCIAL STATEMENTS

Financial Statements at March 31, 2002, and 2001 and for each of the years in
the two-year  period ended  March 31,  2002, are  incorporated by reference from
Pages 17 through 33 of the 2002 Annual Report to Shareholders.

The report of independent  auditors with respect to the financial  statements
at March 31,  2002,  and 2001 and for each of the years in the  two-year  period
ended  March 31,  2002 is  incorporated  by  reference  from Page 16 of the 2002
Annual Report to Shareholders.

## Item  8:  CHANGES  IN  AND  DISAGREEMENTS   WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

# PART III

## Item 9: DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS
AND  CONTROL   PERSONS;   COMPLIANCE   WITH   SECTION   16(a)  OF  THE  EXCHANGE
ACT

(a) Board of Trust  Managers.  The following  information  is furnished as to
each individual who now serves as a member of the Board of Trust Managers of the
Trust:

B. R. McMorries,  age 75, is a consulting engineer.  He has served as a Trust
Manager since 1963. He serves as Chairman of the Board of Trust Managers.

Larry Brown, age 59, is the President of Larry Brown Realtors,  Inc. and is a
licensed  realtor.  He has served as a Trust  Manager  since 1981.  He serves as
Vice-Chairman of the Board of Trust Managers.

Alfred  J.  Smith,  age 67,  is in the  independent  oil  and gas  production
business.  Mr.  Smith has served as a Trust  Manager  since  1999.  He serves as
Secretary of the Board of Trust Managers.

Jack R. Vincent,  age 72, is engaged in farming and ranching  operations.  He
has served as a Trust Manager since 1989.

Steve  Rogers,  age 54, is the  President  of Steve Rogers Co., a real estate
appraisal firm. He has served as a Trust Manager since 1990.

Mike  Bahn,  age 58, is the  President of Amarillo  Blueprint  Co., an office
equipment  and supply and  reproduction  services  business.  He has served as a
Trust Manager since 1997.

# -14-

---

Terry Hays, age 51, is the  Information  Systems  Manager for the law firm of
Perdue,  Brandon,  Fielder,  Collins  and Mott.  Mr.  Hays has served as a Trust
Manager since 1998.

Michael  W. Borger,  age 47, is the  President of Turnkey  Leasing,  Ltd., an
equipment  leasing  business.  Mr.  Borger  was  elected  to the  Board of Trust
Managers by the existing  Board of Trust  Managers in April of 2002.  Mr. Borger
previously served as a Trust Manager from 1988 to 1990.

(b)  Executive  Officers.  The following  information is furnished as to each
individual  who now  serves  as an  executive  officer  of the  Trust who is not
mentioned under "Board of Trust Managers" above:

M. Kelly Archer, age 50, serves as President, Manager of Operations and Chief
Financial  Officer of the Trust. As such, Mr. Archer  functions as the Executive
Officer of the Trust. Mr. Archer has served in this capacity for 20 years.

Robert E. Martin, age 52, serves as the Senior Vice-President-Lending for the
Trust.  Mr. Martin has served in such capacity  since 1999.  Prior to serving in
such capacity, Mr. Martin served as the President/CEO of Santa Fe Federal Credit
Union.  Mr. Martin also served as a member of the Board of Trust Managers of the
Trust prior to becoming an employee of the Trust.

Robert E. Fowler, age 49, serves as the Senior  Vice-President-Accounting and
Information Systems for the Trust. Mr. Fowler has served in such capacity for 20
years.

(c)  Compliance  with Section 16(a) of the  Securities  Exchange Act of 1934.
Based upon  information  provided to the Trust by individual  Trust Managers and
Executive Officers, the Trust believes that during the preceding fiscal year the
Trust  Managers and Executive  Officers  have complied with all such  applicable
filing requirements.

## Item 10: EXECUTIVE COMPENSATION

(a) Executive Officers:

The  following table sets forth certain  information  regarding  compensation
paid during each of the Trust's last three  fiscal years to the Trust's  Manager
of Operations (CEO). The Trust has no other

# -15-

---

executive officers whose salary, bonuses and other compensation earned during
fiscal 2002 exceeded $100,000 for services rendered in all capacities.

`Annual Compensation
                                          -------------------------------
                                  Fiscal                     Other Annual
Name and Principal Position        Year    Salary    Bonus   Compensation
------------------------------     ----   --------   -----   ------------
  CEO-M. Kelly Archer              2002   $108,350     0      $ 18,225
         Manager of Operations     2001    108,510     0        14,490
                                   2000    109,667     0         7,653`

(b) Trust Managers' Compensation:

The Board of Trust Managers of the Trust were paid $49,900 in cash as a group
during the last fiscal year for services as Trust Managers.  The Chairman of the
Board of Trust Managers, B. R. McMorries,  is paid $500 per month for serving in
such  capacity.  The remaining  members of the Board of Trust  Managers are paid
$300 per month for serving as a member of the board. All Trust Managers are paid
an additional $100 per board or committee meeting attended. In addition, a Trust
Manager  receives  $400  per day for  their  services  when out of town on trust
business.

The  members of the Board of Trust  Managers  of the Trust are not  otherwise
employed or compensated by the Trust.

## Item 11: SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

(a)  No  persons  owned  beneficially  more than five (5) percent of the shares of
beneficial interest in the Trust as of March 31, 2002.

(b)  The  following  table  indicates  the  number of  shares  of  beneficial
ownership  interest  in the  Trust  owned by the  Board of  Trust  Managers  and
Executive Officers, individually and as a group:

# -16-

---

`Name and Address of                Amount of and Nature          Percent
     Beneficial Owner                  of Beneficial Ownership *     of Class
     ----------------------------      -----------------------       --------

           B. R. McMorries                     269,700                3.852%

             Larry Brown                       50,989                 0.728%

           Jack R. Vincent                      9,576                 0.137%

            Steve Rogers                        1,300                 0.019%

              Mike Bahn                         1,650                 0.024%

             Terry Hays                         2,566                 0.037%

           Alfred J. Smith                     38,383                 0.548%

          Michael W. Borger                    13,850                 0.198%

           M. Kelly Archer                     137,283                1.961%

          Robert E. Fowler                      5,176                 0.074%

          Robert E. Martin                     3,412                  0.049%
                                              -------                 -------
         All Trust Managers and               533,895                 7.626%
           Executive Officers                 =======                 =======
               as a Group`

*     The  nature of  beneficial  ownership  of such shares is
either directly by such named person, indirectly through such person's spouse or
through  Individual  Retirement  Accounts  directed  by  such  person  or  their
spouse.

(c) Change in control.

There  are no  arrangements  which may  result in a change of  control of the
Trust.

## Item  12:  CERTAIN   RELATIONSHIPS  AND  RELATED
TRANSACTIONS

The Trust issues a limited  number of "Master Notes" which are unsecured debt
instruments  of the Trust.  The Trust pays the obligee of such notes interest at
the rate of one  percent  per annum  (1%) less  than the prime  lending  rate of
Amarillo  National Bank, the Trust's primary  lender.  As of March 31, 2002, the
Trust had entered into Master Note Agreements with B.

# -17-

---

R. McMorries,  Chairman of the Board of Trust Managers, and related persons,
in the amount of  $1,796,868.29;  with Larry  Brown,  Secretary  of the Board of
Trust Managers,  and related persons, in the amount of $220,544; the First State
Bank,  Happy,  Texas,  of which  Jack R.  Vincent,  member of the Board of Trust
Managers, owns,

either  directly or indirectly,  10% or more of the outstanding stock, in the
amount  of  $750,000;  and  Jack R.  Vincent,  a  member  of the  Board of Trust
Managers, in the amount of $151,461. The terms of such Master Notes are the same
as Master Notes  entered  into with other  unrelated  persons,  except as to the
amounts thereof.

## Item   13:   EXHIBITS   AND   REPORTS   ON  FORM
8-K

(a) Exhibits

The Exhibits listed on the accompanying Index to Exhibits are filed as a part
of this Annual Report.

(b) Reports on Form 8-K

None

# -18-

---

# CHURCH LOANS & INVESTMENTS TRUST

INDEX TO EXHIBITS
Item 13(a)

| | (2) | None
| | --- | ----

| | (3) | Declaration of Trust of Church Loans & Investments Trust, as amended, has been previously
filed under File No. 2-51235 and is incorporated herein by reference.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Bylaws of Church Loans & Investments Trust, as amended,  has been previously filed under
File No. 2-51235 and is incorporated herein by reference.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | None other than those listed in (3) above.
| | --- | ------------------------------------------

| | (9) | None
| | --- | ----

| | (10) | None
| | ---- | ----

| | (11) | Statement regarding computation of per share earnings  -omitted since information necessary to
make the computation is included in the Financial Statements and Note 4 thereto.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (13) | Pages 16 through 33 of the 2002 Annual Report to Shareholders
| | ---- | -------------------------------------------------------------

| | (16) | None
| | ---- | ----

| | (18) | None
| | ---- | ----

| | (21) | None
| | ---- | ----

| | (22) | None
| | ---- | ----

| | (23) | None
| | ---- | ----

| | (24) | None
| | ---- | ----

# -19-

---

SIGNATURES

In accordance with Section 13 or
15(d) 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 of the Board of
                 Trust Managers | Dated: June 27, 2002 | 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | 

In accordance with the
Exchange  Act,  this report has been signed  below by the  following  persons on
behalf   of  the   Registrant   and  in  the   capacities   and  on  the   dates
indicated.

|Signature | Capacity | Date
|--------- | -------- | ----

|/s/ B. R. McMorries
         ______________________________
                 B. R. McMorries | Chairman of the Board ofTrust Managers | June 27, 2002
|-------------------------------------------------------------------------------------------- | -------------------------------------- | -------------

|______________________________
                 Larry Brown | Vice-Chairman of the Boardof Trust Managers | 
|----------------------------------------------------------- | ------------------------------------------- | 

|/s/ Alfred J. Smith
         ______________________________
                 Alfred J. Smith | Secretary of the Boardof Trust Managers | June 27, 2002
|-------------------------------------------------------------------------------------------- | --------------------------------------- | -------------

|/s/ M. Kelly Archer
         ______________________________
                 M. Kelly Archer | President, Principal Financialand Accounting Officer | June 27, 2002
|-------------------------------------------------------------------------------------------- | ---------------------------------------------------- | -------------

|/s/ Jack R. Vincent
         ______________________________
                 Jack R. Vincent | Trust Manager | June 27, 2002
|-------------------------------------------------------------------------------------------- | ------------- | -------------

# -20-

---

|/s/ Steve Rogers
         ______________________________
                 Steve Rogers | Trust Manager | June 27, 2002
|-------------------------------------------------------------------------------------- | ------------- | -------------

|/s/ Mike Bahn
         ______________________________
                 Mike Bahn | Trust Manager | June 27, 2002
|-------------------------------------------------------------------------------- | ------------- | -------------

|______________________________
                 Terry Hays | Trust Manager | 
|---------------------------------------------------------- | ------------- | 

|/s/ Michael W. Borger
         ______________________________
                 Michael W. Borger | Trust Manager | June 27, 2002
|------------------------------------------------------------------------------------------------ | ------------- | -------------

# -19-

---