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<SEC-DOCUMENT>0001157523-03-004220.txt : 20030813
<SEC-HEADER>0001157523-03-004220.hdr.sgml : 20030813
<ACCEPTANCE-DATETIME>20030813154019
ACCESSION NUMBER:		0001157523-03-004220
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20030813

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INVESTORS TITLE CO
		CENTRAL INDEX KEY:			0000720858
		STANDARD INDUSTRIAL CLASSIFICATION:	TITLE INSURANCE [6361]
		IRS NUMBER:				561110199
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-11774
		FILM NUMBER:		03841127

	BUSINESS ADDRESS:	
		STREET 1:		121 N COLUMBIA ST
		STREET 2:		P O DRAWER 2687
		CITY:			CHAPEL HILL
		STATE:			NC
		ZIP:			27514
		BUSINESS PHONE:		9199682200

	MAIL ADDRESS:	
		STREET 1:		121 NORTH COLUMBIA STREET
		CITY:			CHAPEL HILL
		STATE:			NC
		ZIP:			27514
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a4453559.txt
<DESCRIPTION>INVESTORS TITLE COMPANY 10-Q
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2003

                                       OR

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

For the transition period from              to
                               ------------    -----------------


                         Commission File Number: 0-11774

                             INVESTORS TITLE COMPANY
             (Exact name of registrant as specified in its charter)


     North Carolina                                      56-1110199
- --------------------------------------------------------------------------------
(State of Incorporation)                    (I.R.S. Employer Identification No.)

          121 North Columbia Street, Chapel Hill, North Carolina 27514
          ------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (919) 968-2200
                                 --------------
               (Registrant's Telephone Number Including Area Code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934 during
the preceding 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
                                      ---     ---

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes       No  X
                                                   ---       ---

         As of August 1, 2003, there were 2,855,744 outstanding shares of common
stock of Investors Title Company, including 352,517 shares held by Investors
Title Insurance Company, a wholly owned subsidiary of Investors Title Company.


<PAGE>

<TABLE>
<CAPTION>
                             INVESTORS TITLE COMPANY
                                AND SUBSIDIARIES

                                      INDEX
                                      -----

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements:

<S>                                                                                           <C>
           Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002...............1

           Consolidated Statements of Income for the Three and Six Months Ended
                   June 30, 2003 and 2002......................................................2

           Consolidated Statements of Cash Flows for the Six Months Ended
                   June 30, 2003 and 2002......................................................3

           Notes to Consolidated Financial Statements .........................................4

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of
                  Operations...................................................................8

Item 3.    Quantitative and Qualitative Disclosures About Market Risk ........................12

Item 4.    Controls and Procedures............................................................12


PART II.   OTHER INFORMATION

Item 4.    Submission of Matters to a Vote of Security Holders................................13

Item 5.    Other Information..................................................................13

Item 6.    Exhibits and Reports on Form 8-K...................................................13


SIGNATURES....................................................................................14
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements
- -----------------------------

                                       Investors Title Company and Subsidiaries
                                              Consolidated Balance Sheets
                                       As of June 30, 2003 and December 31, 2002


                                                                                      June 30, 2003   December 31, 2002
                                                                                      --------------  ------------------
                                                                                       (Unaudited)        (Audited)
Assets
<S>                                                                                  <C>             <C>
  Cash and cash equivalents                                                          $    9,826,555  $       3,781,961

  Investments in securities:
     Fixed maturities:
       Held-to-maturity, at amortized cost                                                3,818,218          4,395,081
       Available-for-sale, at fair value                                                 50,588,858         52,491,648
     Equity securities, at fair value                                                     8,075,922          7,884,928
     Other investments                                                                    1,106,990            564,782
                                                                                      --------------  -----------------
        Total investments                                                                63,589,988         65,336,439

  Premiums receivable (less allowance for doubtful accounts of
     $2,475,000 and $1,800,000 for 2003 and 2002, respectively)                           9,758,431          7,949,904
  Accrued interest and dividends                                                            674,478            720,902
  Prepaid expenses and other assets                                                         988,606          1,095,230
  Property acquired in settlement of claims                                                 771,687            749,562
  Property, net                                                                           4,189,690          4,109,885
  Deferred income taxes, net                                                                633,577            893,263
                                                                                      --------------  -----------------

Total Assets                                                                         $   90,433,012  $      84,637,146
                                                                                      ==============  =================

Liabilities and Stockholders' Equity
Liabilities:
  Reserves for claims (Note 2)                                                       $   27,522,000  $      25,630,000
  Accounts payable and accrued liabilities                                                3,223,177          4,780,865
  Commissions and reinsurance payables                                                      390,747            401,040
  Premium taxes payable                                                                     234,423            268,972
  Current income taxes payable                                                              809,463            888,085
                                                                                      --------------  -----------------
      Total liabilities                                                                  32,179,810         31,968,962
                                                                                      --------------  -----------------

Commitments and Contingencies (Note 6)

Stockholders' Equity:
  Class A Junior Participating preferred stock (shares authorized 100,000; no shares
   issued)                                                                                        -                  -
  Common stock-no par value (shares authorized 10,000,000;
     2,498,939 and 2,515,804 shares issued and outstanding 2003 and 2002,
     respectively, excluding 356,805 and 339,940 shares 2003 and 2002,
     respectively, of common stock held by the Company's subsidiary)                              1                  1
  Retained earnings                                                                      54,627,963         49,613,044
  Accumulated other comprehensive income, net of deferred taxes of
    $1,868,117 and $1,574,431 for 2003 and 2002, respectively (Note 3)                    3,625,238          3,055,139
                                                                                      --------------  -----------------
      Total stockholders' equity                                                         58,253,202         52,668,184
                                                                                      --------------  -----------------

Total Liabilities and Stockholders' Equity                                           $   90,433,012  $      84,637,146
                                                                                      ==============  =================


See notes to consolidated financial statements.

</TABLE>

                                       1

<PAGE>


<TABLE>
<CAPTION>

                                        Investors Title Company and Subsidiaries
                                           Consolidated Statements of Income
                               For the Three and Six Months Ended June 30, 2003 and 2002
                                                      (Unaudited)



                                                                              For The Three            For The Six
                                                                              Months Ended            Months Ended
                                                                                 June 30                 June 30
                                                                         ----------------------- -----------------------
                                                                               2003        2002        2003        2002
                                                                         ----------- ----------- ----------- -----------
Revenues:
    Underwriting income:
<S>                                                                     <C>         <C>         <C>         <C>
       Premiums written                                                 $23,415,757 $14,997,015 $43,180,931 $29,780,863
       Less - premiums for reinsurance ceded                                 93,128     125,818     190,317     228,941
                                                                         ----------- ----------- ----------- -----------
           Net premiums written                                          23,322,629  14,871,197  42,990,614  29,551,922
     Investment income - interest and dividends                             679,857     692,781   1,354,435   1,361,819
     Net realized gain on sales of investments                               41,867       5,043      64,914     290,850
     Other                                                                1,135,290     523,066   1,798,123     957,069
                                                                         ----------- ----------- ----------- -----------
          Total                                                          25,179,643  16,092,087  46,208,086  32,161,660
                                                                         ----------- ----------- ----------- -----------

Operating Expenses:
      Commissions to agents                                              11,462,988   6,767,083  20,855,778  13,776,762
      Provision for claims (Note 2)                                       2,687,693   1,703,640   4,770,731   3,383,051
      Salaries, employee benefits and payroll taxes                       3,708,942   2,729,169   7,255,999   5,667,760
      Office occupancy and operations                                     1,365,677   1,270,795   2,462,793   2,471,192
      Business development                                                  402,204     448,759     783,156     836,880
      Taxes, other than payroll and income                                  121,159     115,357     175,282     191,594
      Premium and retaliatory taxes                                         462,819     304,092     884,105     633,858
      Professional fees                                                     250,795     190,251     458,139     400,506
      Other                                                                 147,914      67,343     199,845     105,280
                                                                         ----------- ----------- ----------- -----------
         Total                                                           20,610,191  13,596,489  37,845,828  27,466,883
                                                                         ----------- ----------- ----------- -----------

Income Before Income Taxes                                                4,569,452   2,495,598   8,362,258   4,694,777
                                                                         ----------- ----------- ----------- -----------

Provision For Income Taxes                                                1,482,000     794,600   2,666,245   1,446,600
                                                                         ----------- ----------- ----------- -----------

Net Income                                                              $ 3,087,452 $ 1,700,998 $ 5,696,013 $ 3,248,177
                                                                         =========== =========== =========== ===========

Basic Earnings Per Common Share (Note 4)                                $      1.24 $      0.68 $      2.27 $      1.29
                                                                         =========== =========== =========== ===========

Weighted Average Shares Outstanding - Basic (Note 4)                      2,494,036   2,517,739   2,503,773   2,517,148
                                                                         =========== =========== =========== ===========

Diluted Earnings Per Common Share (Note 4)                              $      1.18 $      0.65 $      2.18 $      1.25
                                                                         =========== =========== =========== ===========

Weighted Average Shares Outstanding - Diluted (Note 4)                    2,619,743   2,600,191   2,616,098   2,593,565
                                                                         =========== =========== =========== ===========

Dividends Paid                                                          $    74,708 $    77,170 $   150,179 $   151,074
                                                                         =========== =========== =========== ===========

Dividends Per Share                                                     $      0.03 $      0.03 $      0.06 $      0.06
                                                                         =========== =========== =========== ===========


See notes to consolidated financial statements.
</TABLE>

                                       2

<PAGE>


                   Investors Title Company and Subsidiaries
                     Consolidated Statements of Cash Flows
                For the Six Months Ended June 30, 2003 and 2002
                                  (Unaudited)

                                                  2003               2002
                                              --------------    ---------------
Operating Activities:
Net income                                       $5,696,013         $3,248,177
  Adjustments to reconcile net income to net
   cash provided by operating activities:
        Depreciation                                399,390            497,858
        Amortization, net                            12,888             14,867
        Issuance of common stock in payment of
         bonuses and fees                            31,009             41,728
        Provision for losses on premiums
         receivable                                 675,000                  -
        Net gain on disposals
         of property                                 (4,922)            (7,108)
        Net realized gain on sales of
         investments                                (64,914)          (290,850)
        Benefit for deferred
         income taxes                               (34,000)          (254,400)
  Changes in assets and liabilities:
        (Increase) decrease in receivables and
         other assets                            (2,352,604)         2,245,828
        Decrease in accounts payable and
         accrued liabilities                     (1,557,688)        (1,754,985)
        Increase (decrease) in commissions and
         reinsurance payables                       (10,293)            25,996
        Decrease in premium
         taxes payable                              (34,549)          (373,022)
        Increase (decrease) in current income
         taxes payable                              (78,622)            98,714
        Provision for claims                      4,770,731          3,383,051
        Payments of claims, net of recoveries    (2,878,731)        (1,659,551)
                                              --------------    ---------------
    Net cash provided by operating activities     4,568,708          5,216,303
                                              --------------    ---------------

Investing Activities:
  Purchases of available-for-sale securities     (3,452,544)        (5,237,709)
  Purchases of held-to-maturity securities           (4,246)          (362,470)
  Purchases of other securities                    (563,280)          (411,946)
  Proceeds from sales of available-for-sale
   securities                                     6,064,365          3,293,836
  Proceeds from sales of held-to-maturity
   securities                                       592,000            768,750
  Proceeds from other securities                     25,967
  Purchases of property                            (483,508)          (456,858)
  Proceeds from sales of property                     9,235             17,353
                                              --------------    ---------------
    Net cash provided by (used in) investing
     activities                                   2,187,989         (2,389,044)
                                              --------------    ---------------

Financing Activities:
  Repurchases of common stock                      (834,170)           (15,447)
  Exercise of options                               272,246             14,171
  Dividends paid                                   (150,179)          (151,074)
                                              --------------    ---------------
    Net cash used in financing activities          (712,103)          (152,350)
                                              --------------    ---------------

Net Increase in Cash and Cash Equivalents         6,044,594          2,674,909
Cash and Cash Equivalents, Beginning of Year      3,781,961          3,069,929
                                              --------------    ---------------
Cash and Cash Equivalents, End of Period         $9,826,555         $5,744,838
                                              ==============    ===============

Supplemental Disclosures:
Cash Paid During the Year for:
    Income Taxes, net of refunds                 $2,796,000         $1,603,601
                                              ==============    ===============





See notes to consolidated financial statements.


                                       3

<PAGE>

                             INVESTORS TITLE COMPANY
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                   ------------------------------------------
                                  June 30, 2003
                                   (Unaudited)

Note 1 - Basis of Presentation
- ------------------------------

         Reference should be made to the "Notes to Consolidated Financial
Statements" of Investors Title Company's (the "Company") Annual Report to
Shareholders for the year ended December 31, 2002 for a complete description of
the Company's significant accounting policies. There were no changes in the
significant accounting policies during the six months ended June 30, 2003.

         Principles of Consolidation - The unaudited consolidated financial
statements include the accounts and operations of Investors Title Company and
its subsidiaries (Investors Title Insurance Company, Northeast Investors Title
Insurance Company, Investors Title Exchange Corporation, Investors Title
Accommodation Corporation and Investors Title Management Services, Inc.), and
have been prepared in conformity with accounting principles generally accepted
in the United States of America. All intercompany balances and transactions have
been eliminated in consolidation.

         In the opinion of management, all necessary adjustments have been
reflected for a fair presentation of the financial position, results of
operations and cash flows in the accompanying unaudited consolidated financial
statements. All such adjustments are of a normal recurring nature.

         Reclassification - Certain 2002 amounts have been reclassified to
conform to 2003 classifications.

         Earnings Per Share - Basic net income per share information is computed
using the weighted average number of shares of common stock outstanding during
the period. Diluted net income per common share is computed using the weighted
average number of shares of common and dilutive potential common shares
outstanding during the period.

         Recent Accounting Pronouncements - In June 2002, the Financial
Accounting Standards Board (the "FASB") issued Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities ("SFAS No. 146"). SFAS No. 146 addresses accounting and reporting for
costs associated with exit or disposal activities and supercedes Emerging Issues
Task Force Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (Including Certain
Costs Incurred in a Restructuring). SFAS No. 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized and measured
initially at fair value when the liability is incurred. SFAS No. 146 is
effective for exit or disposal activities that are initiated after December 31,
2002. The adoption of this statement had no material impact on the financial
statements.

                                       4

<PAGE>

         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure - an Amendment of FASB
Statement No. 123. SFAS No. 148 amends SFAS No. 123 to provide alternative
methods of transition for a voluntary change to the fair market value based
method of accounting for stock-based employee compensation. The disclosure
provisions of SFAS No. 148 were effective for years ending after December 15,
2002. Presently, the Company does not plan to voluntarily change its method of
accounting for stock-based compensation.

         In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging Activities. SFAS No. 149 is generally
effective for contracts entered into or modified after June 30, 2003 and for
hedging relationships designated after June 30, 2003. The effect of the adoption
of this statement was not material to the Company's operating results or
financial position.

         In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity. This
SFAS is generally effective for financial instruments entered into or modified
after May 31, 2003 and otherwise effective at the beginning of the first interim
period beginning after June 15, 2003. The Company has not yet determined the
effect, if any, of the adoption of this statement.

         FASB Interpretation No. 45, Guarantor's Accounting and Disclosures
Requirements for Guarantees, including Indirect Guarantees of Indebtedness of
Others, became effective on December 31, 2002. This Interpretation addresses the
disclosure requirements for guarantees and indemnification agreements entered
into by the entity. The implementation of this pronouncement did not have any
effect on the Company's financial statements.

         In January 2003, the FASB issued Interpretation No. 46, Consolidation
of Variable Interest Entities. FIN 46 requires that unconsolidated variable
interest entities must be consolidated by their primary beneficiaries. A primary
beneficiary is the party that absorbs a majority of the entity's expected losses
or residual benefits. FIN 46 applies immediately to variable interest entities
in the periods beginning after June 15, 2003. The adoption of FIN 46 had no
significant impact on our financial condition or results of operations.

         Stock-Based Compensation - The Company accounts for stock-based
compensation based on the provisions of Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, which states that, for fixed
plans, no compensation expense is recorded for stock options or other
stock-based awards to employees that are granted with an exercise price equal to
or above the estimated fair value per share of the Company's common stock on the
grant date. In the event that stock options are granted with an exercise price
below the estimated fair value of the Company's common stock at the grant date,
the difference between the fair value of the Company's common stock and the
exercise price of the stock option is recorded as deferred compensation.
Deferred compensation is amortized to compensation expense over the vesting
period of the stock option. The Company has adopted the disclosure requirements
of Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation ("SFAS No. 123"), and Statement of Financial Accounting
Standards No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure - an Amendment to FASB Statement No. 123, which together require
compensation expense to be disclosed based on the fair value of the options
granted at the date of the grant.

                                       5

<PAGE>

         Had compensation cost for the Company's stock option plan been
determined based on the fair value at the grant dates for awards under the plan
consistent with the method required by SFAS No. 123, the Company's net income
and diluted net income per common share would have been the pro forma amounts
indicated in the following table:

<TABLE>
<CAPTION>
                                                     For the Three Month Periods           For the Six Month Periods
                                                              Ended June 30                       Ended June 30
                                                 ---------------- ------------------   ----------------- -------------------
                                                     2003               2002                 2003               2002
                                                 ---------------- ------------------   ----------------- -------------------
<S>                                                  <C>                <C>                 <C>                 <C>
Net income as reported                               $ 3,087,452        $ 1,700,998         $ 5,696,013         $ 3,248,177
Less:  Total stock-based employee compensation
     expense determined under fair value-based
     method for all awards, net of related tax
     effects                                            (32,534)           (30,426)            (70,447)            (59,930)
                                                 ---------------- ------------------  ------------------ -------------------
Pro forma net income                                $ 3,054,918        $ 1,670,572         $ 5,625,566         $ 3,188,247
                                                    ============       ============        ============        ============
Net income per share:
     Basic - as reported                               $    1.24          $    0.68           $    2.27           $    1.29
     Basic - pro forma                                 $    1.22          $    0.66           $    2.25           $    1.27

     Diluted - as reported                             $    1.18          $    0.65           $    2.18           $    1.25
     Diluted - pro forma                               $    1.17          $    0.64           $    2.15           $    1.23
</TABLE>

Note 2 - Reserves for Claims

         Transactions in the reserves for claims for the six months ended June
30, 2003 and the year ended December 31, 2002 were as follows:

                                          June 30, 2003      December 31, 2002
                                          ----------------  --------------------
  Balance, beginning of year                $ 25,630,000         $ 21,460,000
  Provision, charged to operations             4,770,731            6,871,822
  Payments of claims, net of recoveries       (2,878,731)          (2,701,822)
                                          ----------------  --------------------

  Ending balance                            $ 27,522,000         $ 25,630,000
                                          ================  ====================

         In management's opinion, the reserves are adequate to cover claim
losses which might result from pending and possible claims. The Company's
reserves for unpaid losses and loss adjustment expenses are established using
estimated amounts required to settle claims for which notice has been received
(reported) and the amount estimated to be required to satisfy incurred claims of
policyholders which may be reported in the future. Despite the variability of
such estimates, management believes that the reserves are adequate to cover
claim losses which might result from pending and future claims. The Company
continually reviews and adjusts its reserve estimates to reflect its loss
experience and any new information that becomes available.

                                       6

<PAGE>

Note 3 - Comprehensive Income
- -----------------------------

         Comprehensive income for the three months ended June 30, 2003 and 2002
was $3,679,441 and $2,369,666, respectively. Comprehensive income for the six
months ended June 30, 2003 and 2002 was $6,266,112 and $3,670,627, respectively.
Other comprehensive income is comprised solely of unrealized gains or losses on
the Company's available-for-sale securities.

Note 4 - Earnings Per Common Share
- ----------------------------------

         Employee stock options are considered outstanding for the diluted
earnings per common share calculation and are computed using the treasury stock
method. The total increase in the weighted average shares outstanding related to
these equivalent shares was 125,707 and 82,452 for the three months ended June
30, 2003 and 2002, respectively, and 112,325 and 76,417 for the six months ended
June 30, 2003 and 2002, respectively. Options to purchase 282,246 and 301,316
shares of common stock were outstanding as of June 30, 2003 and 2002,
respectively. Of the total options outstanding, 28,100 and 68,686 options were
not included in the computation of diluted earnings per share for the three
months ended June 30, 2003 and 2002, respectively; and 39,840 and 68,686 options
were not included in the computation of diluted earnings per share for the six
months ended June 30, 2003 and 2002, respectively, because the options' exercise
prices were greater than the average market price of the common shares.

<TABLE>
<CAPTION>
Note 5 - Segment Information
- ----------------------------

                                                                   Income
Three Months                              Operating                Before
Ended                                      Revenues             Income Taxes            Assets
- --------------------------------------------------------------------------------------------------
June 30, 2003
- --------------------------------------------------------------------------------------------------
<S>                                      <C>                    <C>                   <C>
Title Insurance                          $23,846,555            $ 4,225,350           $83,774,269
Exchange Services                            389,811                277,381               408,640
All Other                                    221,553                 66,721             6,250,103
- --------------------------------------------------------------------------------------------------
                                         $24,457,919            $ 4,569,452           $90,433,012
- --------------------------------------------------------------------------------------------------

June 30, 2002
- --------------------------------------------------------------------------------------------------
Title Insurance                          $15,021,352            $ 2,363,446           $69,338,805
Exchange Services                            180,542                 70,698               295,038
All Other                                    192,369                 61,454             3,872,031
- --------------------------------------------------------------------------------------------------
                                         $15,394,263            $ 2,495,598           $73,505,874
- --------------------------------------------------------------------------------------------------
</TABLE>

                                       7

<PAGE>

<TABLE>
<CAPTION>

                                                                    Income
Six Months                                Operating                 Before
Ended                                      Revenues              Income Taxes           Assets
- --------------------------------------------------------------------------------------------------
June 30, 2003
- --------------------------------------------------------------------------------------------------
<S>                                      <C>                    <C>                   <C>
Title Insurance                          $43,838,001            $ 7,959,007           $83,774,269
Exchange Services                            490,901                242,500               408,640
All Other                                    459,835                160,751             6,250,103
- --------------------------------------------------------------------------------------------------
                                         $44,788,737            $ 8,362,258           $90,433,012

June 30, 2002
- --------------------------------------------------------------------------------------------------
Title Insurance                          $29,845,072            $ 4,510,778           $69,338,805
Exchange Services                            286,797                 50,396               295,038
All Other                                    377,122                133,603             3,872,031
- --------------------------------------------------------------------------------------------------
                                         $30,508,991            $ 4,694,777           $73,505,874
- --------------------------------------------------------------------------------------------------
</TABLE>


     Operating revenues represent net premiums written and other revenues,
excluding investment income and net realized gain on sales of investments.

Note 6 - Commitments and Contingencies
- --------------------------------------

     The Company and its subsidiaries are involved in various routine legal
proceedings that are incidental to their business. All of these proceedings
arose in the ordinary course of business and, in the Company's opinion, any
potential liability of the Company or its subsidiaries with respect to these
legal proceedings will not, in the aggregate, be material to the Company's
consolidated financial condition or operations.

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations
           ----------------------------------------------------------------

     The Company's 2002 Form 10-K and 2002 Annual Report to Shareholders should
be read in conjunction with the following discussion since they contain
important information for evaluating the Company's operating results and
financial condition.

Critical Accounting Policies:
- -----------------------------

     During the six months ended June 30, 2003, the Company made no changes in
its critical accounting policies as previously disclosed within the Company's
Annual Report on Form 10-K for the year ended December 31, 2002.

                                       8

<PAGE>

Results of Operations:
- ----------------------

     For the quarter ended June 30, 2003, net premiums written increased 57% to
$23,322,629, investment income decreased 2% to $679,857, revenues increased 56%
to $25,179,643 and net income increased 82% to $3,087,452, all compared with the
same quarter in 2002. Both net income per basic and diluted common share
increased 82%, to $1.24 and $1.18, respectively, as compared with the same
quarter ended June 30, 2002. For the quarter ended June 30, 2003, the title
insurance segment's operating revenues increased 59% compared with the second
quarter of 2002, while the exchange services segment's operating revenues
increased 116% for the quarter ended June 30, 2003, compared with the same
quarter in 2002.

     For the six months ended June 30, 2003, net premiums written increased 45%
to $42,990,614, investment income decreased 1% to $1,354,435, revenues increased
44% to $46,208,086 and net income increased 75% to $5,696,013, all compared with
the same period in 2002. Net income per basic and diluted common share increased
76% and 74%, respectively, to $2.27 and $2.18 as compared with the same six
month period ended June 30, 2002. For the six months ended June 30, 2003, the
title insurance segment's operating revenues increased 47% compared with the
same period in 2002, while the exchange services segment's operating revenues
increased 71% for the six months ended June 30, 2003 compared with the same
period in 2002.

     Revenue and earnings continued to be driven by mortgage refinancing.
Mortgage interest rates declined through the period as fears persisted over
possible deflation. In response to lower rates, applications for mortgage
refinancing surged to unprecedented levels. Nationally, refinancings represented
over 75% of weekly mortgage applications at the end of the quarter. According to
the Freddie Mac Weekly Mortgage Rate Survey, the monthly average 30-year fixed
mortgage interest rates decreased to an average of 5.67% for the six months
ended June 30, 2003, compared with 6.89% for the six months ended June 30, 2002.
The volume of business remained strong in the second quarter of 2003 as the
number of policies and commitments issued rose to 214,228, an increase of 49.2%
compared with 143,583 in the same period in 2002.

     Branch net premiums written as a percentage of total net premiums written
were 34% and 38% for the three months ended June 30, 2003 and 2002,
respectively, and 35% and 37% for the six months ended June 30, 2003 and 2002,
respectively. Net premiums written from branch operations increased 43% and
decreased 3% for the three months ended June 30, 2003 and 2002, respectively, as
compared with the same periods in the prior year. For the six months ended June
30, 2003 and 2002, net premiums written from branch operations increased 38% and
8%, respectively, as compared with the same prior year periods.

     Agency net premiums written as a percentage of total net premiums written
were 66% and 62% for the three months ended June 30, 2003 and 2002,
respectively, and 65% and 63% for the six months ended June 30, 2003 and 2002,
respectively. Agency net premiums increased 65% and 2% for the three months
ended June 30, 2003 and 2002, respectively, as compared with the same periods in
the prior year. For the six months ended June 30, 2003 and 2002, net premiums
written from agency operations increased 50% and 15%, respectively, as compared
with the same prior year periods.

                                       9

<PAGE>

         Shown below is a schedule of premiums written for the six months ended
June 30, 2003 and 2002 in all states in which the Company's two insurance
subsidiaries, Investors Title Insurance Company and Northeast Investors Title
Insurance Company, currently underwrite insurance:


    State                               2003                        2002
    ------                          ------------               ------------
    Alabama                            $ 645,527                 $  275,440
    Arkansas                              18,170                      7,638
    District of Columbia                   6,274                          -
    Florida                               25,150                          -
    Georgia                               27,639                      1,836
    Illinois                             756,449                          -
    Indiana                              175,701                      5,114
    Kentucky                             941,646                    503,741
    Louisiana                              1,676                          -
    Maryland                             975,414                    636,148
    Michigan                           4,394,450                  4,419,751
    Minnesota                          1,093,748                    652,130
    Mississippi                          565,025                    413,665
    Missouri                              19,218                          -
    Nebraska                           1,163,552                    387,291
    New Jersey                            41,266                     11,943
    New York                           3,106,336                  1,527,021
    North Carolina                    14,909,659                 10,817,167
    Ohio                                  65,129                     11,673
    Pennsylvania                       3,297,694                  1,551,870
    South Carolina                     3,272,382                  2,616,019
    Tennessee                          2,029,754                  1,521,794
    Virginia                           4,608,819                  3,625,674
    West Virginia                      1,034,122                    772,049
    Wisconsin                              (100)                      7,234
                                  -----------------      ---------------------
       Direct Premiums                43,174,700                 29,765,198
    Reinsurance Assumed                    6,231                     15,665
    Reinsurance Ceded                   (190,317)                  (228,941)
                                  -----------------      ---------------------
       Net Premiums                  $42,990,614                $29,551,922
                                  =================      =====================

         The increase in premiums is primarily the result of lower mortgage
interest rates that continue to stimulate a healthy demand for home sales and
mortgage refinancing. The continued effort to increase our market share with
existing and new agents also contributed to the increase in premium volume.

                                       10

<PAGE>

         Total operating expenses increased 52% and 38% for the three and six
month periods ended June 30, 2003, respectively, compared with the same periods
in 2002. This was due primarily to an increase in commission expense as a result
of increased business from agent sources. The increase in volume of premiums and
costs associated with entering and supporting new markets also contributed to
the increase in operating expenses.

         The provision for claims as a percentage of net premiums written was
approximately 11% for the three and six months ended June 30, 2003 and 2002.

         The provision for income taxes was 32% of income before income taxes
for the three months ended June 30, 2003 and 2002. For the six months ended June
30, 2003 and 2002, the provision for income taxes was 32% and 31% of income
before income taxes, respectively. The slight increase in the tax provision
percentage was primarily due to a change in the ratio of tax-exempt investment
income to taxable income.

Liquidity and Capital Resources:
- --------------------------------

         Net cash provided by operating activities for the six months ended June
30, 2003, amounted to $4,568,708 compared with $5,216,303 for the same six month
period of 2002. The decrease is primarily the result of an increase in
receivables, an increase in payments of claims, net of recoveries, and a
decrease in accounts payable, offset by an increase in net income.

         On June 5, 2000, the Board of Directors of Investors Title Insurance
Company approved Investors Title Insurance Company's purchase of 500,000 shares
of the Company's common stock. Pursuant to this approval, Investors Title
Insurance Company purchased 87,446 shares at an average price of $19.09 per
share. For the six months ended June 30, 2003 and 2002, a total of 36,128 shares
and 829 shares at an average price of $23.09 per share and $18.63 per share,
respectively, were repurchased.

         On May 16, 2001, the Board of Directors approved the 2001 Stock Option
and Restricted Stock Plan. Pursuant to the Plan, 250,000 shares of common stock
are available. For the six months ended June 30, 2003, options for a total of
43,500 shares had been granted. As of August 1, 2003, options for 1,300 shares
had been exercised under this plan.

         During the six months ended June 30, 2003, Investors Title Insurance
Company purchased common stock for $834,170 and issued common stock totaling
$303,255 in satisfaction of stock option exercises, stock bonuses and other
stock issuances.

         Management believes that funds generated from operations (primarily
underwriting and investment income) will enable the Company to adequately meet
its operating needs and is unaware of any trend likely to result in adverse
liquidity changes. In addition to operational liquidity, the Company maintains a
high degree of liquidity within the investment portfolio in the form of
short-term investments and other readily marketable securities.

                                       11

<PAGE>

Safe Harbor Statement
- ---------------------

         Except for the historical information presented, the matters disclosed
in the foregoing discussion and analysis and other parts of this report include
forward-looking statements. These statements represent the Company's current
judgment on the future and are subject to risks and uncertainties that could
cause actual results to differ materially. Such factors include, without
limitation: (1) that the demand for title insurance will vary due to factors
beyond the control of the Company such as changes in mortgage interest rates,
availability of mortgage funds, level of real estate activity, cost of real
estate, consumer confidence, supply and demand for real estate, inflation and
general economic conditions; (2) that losses from claims may be greater than
anticipated such that reserves for possible claims are inadequate; (3) that
unanticipated adverse changes in securities markets could result in material
losses on investments made by the Company; and (4) the Company's dependence on
key management personnel, the loss of whom could have a material adverse effect
on the Company's business. Other risks and uncertainties may be described from
time to time in the Company's other reports and filings with the Securities and
Exchange Commission.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
         ----------------------------------------------------------

         The Company's market risk exposure has not changed materially from the
exposure as disclosed in the Company's 2002 Annual Report on Form 10-K.

Item 4.  Controls and Procedures
         -----------------------

         Based on their evaluation of the effectiveness of the Company's
disclosure controls and procedures, the Chief Executive Officer and the Chief
Financial Officer of the Company concluded that, as of June 30, 2003, the
Company's disclosure controls and procedures were effective to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Securities and Exchange Act of 1934, as amended, was
recorded, processed, summarized and reported within the time periods specified
by the Securities and Exchange Commission's rules and forms. In reaching this
conclusion, the Company's Chief Executive Officer and Chief Financial Officer
determined that the Company's disclosure controls and procedures were effective
in ensuring that such information was accumulated and communicated to the
Company's management to allow timely decisions regarding required disclosure.

         There was no change in the Company's internal control over financial
reporting identified in connection with the above-referenced evaluation that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

                                       12

<PAGE>

PART II.   OTHER INFORMATION

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

           Investors Title Company's Annual Meeting of Shareholders was held on
May 21, 2003. The voting results for the proposal to elect three Directors to
the Company's Board of Directors, each for a three-year term, are as follows:

<TABLE>
<CAPTION>
                                                                                                      Broker
                                           For         Against      Abstentions      Withheld        Non-votes
                                           ---         -------      -----------      --------        ---------
<S>                                   <C>                                              <C>
     James A. Fine, Jr.               2,260,594          N/A            N/A            64,695           N/A

     H. Joe King, Jr.                 2,322,833          N/A            N/A             2,456           N/A

     James R. Morton                  2,287,685          N/A            N/A            37,604           N/A
</TABLE>


Item 5.    Other Information
           -----------------

           On April 17, 2003, the Audit Committee of the Company's Board of
Directors voted to engage Deloitte and Touche, LLP to perform audit and tax
services for the Company for the year ending December 31, 2003.

Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

(a) Exhibits

     3(ii)        Amended and Restated By-Laws

     31(i)        Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002

     31(ii)       Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002

     32           Certification of Chief Executive Officer and Chief Financial
                  Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002

(b) Reports on Form 8-K

              On April 24, 2003, the Company furnished a report on Form 8-K that
     reported under Item 9 that, on April 24, 2003, the Company released
     earnings for the quarter ended March 31, 2003.

                                       13

<PAGE>


                                   SIGNATURES

      Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed in its behalf by the
undersigned hereunto duly authorized.

                               INVESTORS TITLE COMPANY

                               By:  /s/ James A. Fine, Jr.
                                    ----------------------
                                    James A. Fine, Jr.
                                    President, Principal Financial Officer and
                                    Principal Accounting Officer


Dated: August 13, 2003

                                       14


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>3
<FILENAME>a4453559ex3ii.txt
<DESCRIPTION>EXHIBIT 3(II)
<TEXT>
                                                                   Exhibit 3(ii)
                                                                   -------------

                                     BY-LAWS
                                       OF
                             INVESTORS TITLE COMPANY

                    RESTATED AND AMENDED THROUGH MAY 21, 2003


                                   ARTICLE I.

                                    OFFICES:

     Section 1. Principal Office: The principal office of the Corporation shall
be located at 121 North Columbia Street, Chapel Hill, North Carolina.

     Section 2. Registered Office: The registered office of the Corporation
required by law to be maintained in the State of North Carolina may be, but need
not be, identical with the principal office.

     Section 3. Other Offices: The Corporation may have offices at such other
places, either within or without the State of North Carolina, as the Board of
Directors may from time to time determine, or as the affairs of the Corporation
may require.


                                   ARTICLE II.

                            MEETING OF SHAREHOLDERS:

     Section 1. Place of Meetings: All meetings of shareholders shall be held at
the principal office of the Corporation, or at such other place, either within
or without the State of North Carolina, as shall be designated in the notice of
the meeting or agreed upon by a majority of the shareholders entitled to vote
thereat.

     Section 2. Annual Meetings: The annual meeting of shareholders shall be
held on the third Wednesday in May of each year, if not a legal holiday, but if
a legal holiday, then on the next day following not a legal holiday, for the
purpose of electing directors of the Corporation and for the transaction of such
other business as may be properly brought before the meeting.

     Section 3. Substitute Annual Meeting: If the annual meeting shall not be
held on the day designated by these by-laws, then a substitute annual meeting
may be called in accordance with the provisions of Section 4 of this Article. A
meeting so called shall be designated and treated for all purposes as the annual
meeting.

     Section 4. Special Meetings: Special meetings of the shareholders may be
called by any of the following: (a) by the Chairman of the Board of Directors;
(b) by the President of the Corporation; (c) by the Board of Directors upon the
affirmative vote of at least seventy-five percent (75%) of the entire Board of
Directors; or (d) by the shareholders upon written request of those persons
holding of record not less than eighty percent (80%) of the total voting power
of the shares entitled to vote thereon.

<PAGE>

     Section 5. Notice of Meetings: Written or printed notice stating the time
and place of the meeting shall be delivered no fewer than 10 nor more than 60
days before the date thereof, either personally or by mail, by or at the
direction of the President or the other person calling the meeting, to each
shareholder of record entitled to vote at such meeting and to each nonvoting
shareholder entitled to notice of the meeting. If the corporation is required by
law to give notice of proposed action to nonvoting shareholders and the action
is to be taken without a meeting pursuant to Section 9 of this Article, written
notice of such proposed action shall be delivered to such shareholders not less
than 10 days before such action is taken.

     If notice is mailed, such notice shall be effective when deposited in the
United States mail with postage thereon prepaid and correctly addressed to the
shareholder's address shown in the corporation's current record of shareholders.

     In the case of an annual or substitute annual meeting, the notice of
meeting need not specifically state the business to be transacted thereat unless
it is a matter with respect to which specific notice to the shareholders is
expressly required by the provisions of the North Carolina Business Corporation
Act. In the case of a special meeting, the notice of meeting shall specifically
state the purpose or purposes for which the meeting is called.

     When a meeting is adjourned for more than 120 days after the date fixed for
the original meeting or if a new record date for the adjourned meeting is fixed,
notice of the adjourned meeting shall be given as in the case of an original
meeting. When a meeting is adjourned for 120 days or less and no new record date
for the adjourned meeting is fixed, it is not necessary to give notice of the
adjourned meeting other than by announcement at the meeting at which the
adjournment is taken.

     Section 6. Voting Lists: At least ten days before each meeting of
shareholders, the Secretary of the Corporation shall prepare an alphabetical
list of the shareholders entitled to vote at such meetings, with the address of
and number of shares held by each, which list shall be kept on file at the
registered office of the Corporation for a period of ten days prior to such
meeting, and shall be subject to inspection by any shareholder at any time
during the usual business hours. This list shall also be provided and kept open
at the time and place of the meeting and shall be subject to inspection by any
shareholder during the whole time of the meeting.

     Section 7. Quorum: The holders of a majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at meetings
of shareholders. If there is no quorum at the opening of a meeting of
shareholders, such meeting may be adjourned from time to time by the vote of a
majority of the shares voting on the motion to adjourn; and, at any adjourned
meeting at which a quorum is present, any business may be transacted which might
have been transacted at the original meeting.

     The shareholders at a meeting at which a quorum is present may continue to
do business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.

<PAGE>

     Section 8. Voting of Shares: Each outstanding share having voting rights
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders.

     Except in the election of directors, the vote of a majority of the shares
voted on any matter at a meeting of shareholders at which a quorum is present
shall be the act of the shareholders on that matter, unless the vote of a
greater number is required by law or by the charter or by-laws of this
Corporation.

     Voting on all matters shall be by voice or by a show of hands unless the
holders of one-tenth of the shares represented at the meeting shall, prior to
the voting on any matter, demand a ballot vote on that particular matter.

     Section 9. Informal Action by Shareholders: Any action which may be taken
at a meeting of the shareholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
persons who would be entitled to vote upon such action at a meeting, and filed
with the Secretary of the Corporation to be kept in the Corporate Minute Book.


                                  ARTICLE III.

                                    DIRECTORS

     Section 1. General Powers: The business and affairs of the Corporation
shall be managed by the Board of Directors or by such Executive Committees as
the Board may establish pursuant to these by-laws.

     Section 2. Number, Term and Qualifications: The number of Directors of the
Corporation shall not be less than nine nor more than twelve, as determined from
time to time by the shareholders. The Board shall be divided into three classes,
having staggered terms of three years each. Each director shall hold office
until his death, resignation, retirement, removal, disqualification, or his
successor is elected and qualified. Directors need not be residents of the State
of North Carolina or shareholders of the Corporation.

     Section 3. Election of Directors: Except as provided in Section 6 of this
Article, the directors shall be elected at the annual meeting of shareholders;
and those persons who receive the highest number of votes shall be deemed to
have been elected.

     Section 4. Removal: Neither the entire Board of Directors nor any
individual director of the corporation shall be removed from office, with or
without cause, unless a meeting of the shareholders of the corporation is held
to act thereon and there is obtained the approval of a percentage of all votes
entitled to be cast thereon of at least eighty percent (80%); provided, however,
that if any such removal shall have been recommended to the shareholders of the
corporation by a resolution of the Board of Directors adopted by the affirmative
vote of seventy-five percent (75%) of the entire Board of Directors, then such
removal may be effected if a meeting of the shareholders of the corporation is
held to act thereon and there is obtained the approval of a percentage of all
votes entitled to be cast thereon equal to a majority of all votes entitled to
be cast thereon; provided, further, that any such removal may be effected
without a meeting or vote of the shareholders of the corporation if a resolution
determining that cause exists for such removal shall be adopted by the
affirmative vote of seventy-five percent (75%) of the entire Board of Directors.

<PAGE>


     Section 5. Vacancies: A vacancy occurring in the Board of Directors may be
filled by a majority of the remaining directors, though less than a quorum, or
by the sole remaining director; but a vacancy created by an increase in the
authorized number of directors shall be filled only by election at an annual
meeting or at a special meeting of shareholders called for that purpose. The
shareholders may elect a director at any time to fill any vacancy not filled by
the directors.

     Section 6. Chairman: There may be a Chairman of the Board of Directors
elected by the directors from their number at any meeting of the Board. The
Chairman shall preside at all meetings of the Board of Directors and perform
such other duties as may be directed by the Board.

     Section 7. Compensation: The Board of Directors may compensate directors
for their services.

     Section 8. Executive Committee: The Board of Directors may, by resolution
adopted by a majority of the number of directors fixed by these by-laws,
designate two or more directors to constitute an Executive Committee, which
committee, to the extent provided in such resolution, shall have and may
exercise all of the authority of the Board of Directors in the management of the
Corporation.

     Section 9. Indemnification: Any person who at any time serves or has served
as a director of the corporation, or who, while serving as a director of the
corporation, serves or has served, at the request of the corporation, as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or as a trustee or
administrator under an employee benefit plan, shall have a right to be
indemnified by the corporation to the fullest extent permitted by law against
(a) all expenses, including but not limited to attorneys' fees, the costs of any
investigation, experts and similar expenses incurred by him in connection with
any threatened, pending, or completed civil, criminal, administrative,
investigative, or arbitrative action, suit or proceeding (and any appeal
therein), whether or not brought by or on behalf of the corporation, seeking to
hold him liable by reason of the fact that he is or was acting in such capacity,
and (b) all payments made by him in satisfaction of any judgment, money decree,
fine (including an excise tax assessed with respect to an employee benefit
plan), penalty, or settlement for which he may have become liable in any such
action, suit or proceeding.

     The Board of Directors of the corporation shall take all such action as may
be necessary and appropriate to authorize the corporation to pay the
indemnification required by this bylaw.

     To the fullest extent from time to time permitted by law, the Company
agrees to pay as incurred all the expenses, including but not limited to
attorneys' fees and expenses of any person indemnified hereunder, incurred in
defending any action, proceeding, suit or investigation and in advance of the
final disposition of such action, proceeding, suit or investigation.

     Any person who at any time after the adoption of this bylaw serves or has
served in the aforesaid capacity for or on behalf of the corporation shall be
deemed to be doing or to have done so in reliance upon, and as consideration
for, the right of indemnification provided herein. Such right shall inure to the
benefit of the legal representatives of any such person and shall not be
exclusive of any other rights to which such person may be entitled apart from
the provision of this bylaw.

<PAGE>

                                  ARTICLE IV.

                              MEETING OF DIRECTORS

     Section 1. Regular Meetings: A regular meeting of the Board of Directors
shall be held immediately after, and at the same place as, the annual meeting of
shareholders. In addition, the Board of Directors may provide, by resolution,
the time and place, either within or without the State of North Carolina, for
the holding of additional regular meetings.

     Section 2. Special Meetings: Special Meetings of the Board of Directors may
be called by or at the request of the President or any two directors. Such
meetings may be held either within or without the State of North Carolina.

     Section 3. Notice of Meetings: Regular meetings of the Board of Directors
may be held without notice.

     The person or persons calling a special meeting of the Board of Directors
shall, at least two days before the meeting, give notice thereof by the usual
means of communication. Such notice need not specify the purpose for which the
meeting is called.

     Attendance by a director at a meeting shall constitute a waiver of notice
of such meeting, except where a director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called.

     Section 4. Quorum: A majority of the directors fixed by these by-laws shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors.

     Section 5. Manner of Acting: Except as otherwise provided in this section,
the act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.

     The vote of a majority of the number of directors fixed by these by-laws
shall be required to adopt a resolution constituting an executive committee. The
vote of a majority of the directors then holding office shall be required to
adopt, amend or repeal a by-law, or to adopt a resolution dissolving the
corporation without action by the shareholders. Vacancies in the Board of
Directors may be filled as provided in Article III, Section 6 of these by-laws.

     Section 6. Informal Action by Directors: Action taken by a majority of the
directors without a meeting is nevertheless Board action if written consent to
the action in question is signed by all the directors and filed with the minutes
of the proceedings.

<PAGE>

     Section 7. Bonds: The Board of Directors may by resolution require any or
all officers, agents and employees of the Corporation to give bond to the
Corporation, with sufficient sureties, conditioned on the faithful performance
of the duties of their respective offices or positions, and to comply with such
other conditions as may from time to time be required by the Board of Directors.


                                   ARTICLE V.

                                    OFFICERS

     Section 1. Number: The officers of the Corporation shall consist of a
President, a Secretary, a Treasurer, and such Vice-Presidents, Assistant
Secretaries, Assistant Treasurers and other officers as the Board of Directors
may from time to time elect. Any two or more offices may be held by the same
person, except the offices of President and Secretary.

     Section 2. Election and Term: The officers of the Corporation shall be
elected by the Board of Directors. Such elections may be held at any regular or
special meeting of the Board. Each officer shall hold office until his death,
resignation, retirement, removal, disqualification, or his successor is elected
and qualified.

     Section 3. Removal: Any officer or agent elected or appointed by the Board
of Directors may be removed by the Board with or without cause; but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.

     Section 4. Compensation: The compensation of all officers of the
Corporation shall be fixed by the Board of Directors.

     Section 5. Chief Executive Officer: The Chief Executive Officer shall be
the principal executive and administrative officer of the Corporation and,
subject to the control of the Board of Directors, shall supervise and control
the management of the Corporation in accordance with these by-laws.

     He shall, when present, preside at all meetings of shareholders. At the
request of the Chairman of the Board, or in case of his absence or inability to
act, the Chief Executive Officer may act in his place. He shall sign, with any
other proper officer, any deeds, mortgages, bonds, contracts, or other
instruments which may be lawfully executed on behalf of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be delegated by the Board
of Directors to some other officer or agent. The Chief Executive Officer shall
perform all duties incident to his office and such other duties as may be
prescribed by the Board of Directors from time to time.

     Section 6. President: The President shall be a principal administrative
officer of the Corporation and, subject to the control of the Chief Executive
Officer, shall assist the Chief Executive Officer in supervising and controlling
the management of the Corporation in accordance with these by-laws.

<PAGE>

     At the request of the Chief Executive Officer, or in case of his absence or
inability to act, the President may act in his place. Furthermore, at the
request of the Chairman of the Board, or in case of the absence or inability to
act of both the Chairman of the Board and the Chief Executive Officer, the
President may act in the Chairman's place. He shall sign, with any other proper
officer, certificates for shares of the Corporation and any deeds, mortgages,
bonds, contracts, or other instruments which may be lawfully executed on behalf
of the Corporation, except where required or permitted by law to be otherwise
signed and executed and except where the signing and execution thereof shall be
delegated by the Board of Directors to some other officer or agent. The
President shall perform all duties incident to his office and such other duties
as may be prescribed by the Board of Directors from time to time.

     Section 7. Vice-Presidents: The Vice-Presidents in the order of their
election, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President, perform the duties and exercise the
powers of that office, subject to the restrictions applicable to such office. In
addition, they shall perform such other duties and have such other powers as the
Board of Directors shall prescribe.

     Section 8. Secretary: The Secretary shall keep accurate records of the acts
and proceedings of all meetings of shareholders and directors. He shall give all
notices required by law and by these by-laws. He shall have general charge of
the corporate books and records and of the corporate seal, and he shall affix
the corporate seal to any lawfully executed instrument requiring it. He shall
have general charge of the stock transfer books of the Corporation and shall
keep, at the registered or principal office of the Corporation, a record of
shareholders showing the name and address of each shareholder and the number and
class of the shares held by each. He shall sign such instruments as may require
his signature, and, in general, shall perform all duties incident to the office
of Secretary and such other duties as may be assigned to him from time to time
by the President or by the Board of Directors.

     Section 9. Treasurer: The Treasurer shall have custody of all funds and
securities belonging to the Corporation and shall receive, deposit or disburse
the same under the direction of the Board of Directors. He shall keep full and
accurate accounts of the finances of the Corporation in books especially
provided for that purpose; and he shall cause a true statement of its assets and
liabilities as of the close of each fiscal year and of the results of its
operations and of changes in surplus for such fiscal year, all in reasonable
detail, including particulars as to convertible securities then outstanding, to
be made and filed at the registered or principal office of the Corporation
within four months after the end of such fiscal year. The statement so filed
shall be kept available for inspection by any shareholder for a period of ten
years; and the Treasurer shall mail or otherwise deliver a copy of the latest
such statement to any shareholder upon his written request thereof. The
Treasurer shall, in general perform all duties incident to his office and such
other duties as may be assigned to him from time to time by the President or by
the Board of Directors.

     Section 10. Assistant Secretaries and Treasurers: The Assistant Secretaries
and Assistant Treasurers shall, in the absence or disability of the Secretary or
the Treasurer, respectively, perform the duties and exercise the powers of those
offices, and they shall, in general, perform such other duties as shall be
assigned to them by the Secretary or the Treasurer, respectively, or by the
President or the Board of Directors.

<PAGE>



                                   ARTICLE VI.

                          CONTRACTS, LOANS AND DEPOSITS

     Section 1. Contracts: The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument on behalf of the Corporation, and such authority may be general or
confined to specific instances.

     Section 2. Loans: No loans to or from the Corporation shall be contracted
on behalf of the Corporation and no evidences of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of Directors. Such
authority may be general or confined to specific instances.

     Section 3. Checks and Drafts: All checks, drafts or other orders for the
payment of money issued in the name of the Corporation shall be signed by such
officer or officers, agent or agents of the Corporation and in such manner as
shall from time to time be determined by resolution of the Board of Directors.

     Section 4. Deposits: All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
depositories as the Board of Directors shall direct.



                                  ARTICLE VII.

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

     Section 1. Certificates for Shares: Certificates representing shares of the
Corporation shall be issued, in such form as the Board of Directors shall
determine, to every shareholder for the fully paid shares owned by him. These
certificates shall be signed by the President or any Vice-President and the
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer. They shall be
consecutively numbered or otherwise identified; and the name and address of the
persons, corporations, firms or organizations to whom they are issued, with the
number of shares and date of issue, shall be entered on the stock transfer books
of the Corporation.

     Section 2. Transfer of Shares: Transfer of shares shall be made on the
stock transfer books of the Corporation only upon surrender of the certificates
for the shares sought to be transferred by the record holder thereof or by his
duly authorized agent, transferee or legal representative. All certificates
surrendered for transfer shall be cancelled before new certificates for the
transferred shares shall be issued.

     Section 3. Fixing Record Date. For the purpose of determining the
shareholders entitled to notice of a meeting of shareholders, to demand a
special meeting, to vote, to take any other action, or to receive a dividend
with respect to their shares, the Board of Directors may fix in advance a date
as the record date for any such determination of shareholders. Such record date
fixed by the Board of Directors under this Section shall not be more than 70
days before the meeting or action requiring a determination of shareholders.

<PAGE>

     If no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders entitled
to a dividend, the close of the business day before the first notice is
delivered to shareholders or the date on which the Board of Directors authorizes
the dividend, as the case may be, shall be the record date for such
determination of shareholders.

     When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof unless the Board of Directors fixes a new
record date, which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.

     Section 4. Lost Certificates: The Board of Directors may authorize the
issuance of a new share certificate in place of a certificate claimed to have
been lost or destroyed, upon receipt of an affidavit of such fact from the
person claiming the loss or destruction. When authorizing such issuance of a new
certificate, the Board may require the claimant to give the Corporation a bond
in such sum as it may direct to indemnify the Corporation against loss from any
claim with respect to the certificate claimed to have been lost or destroyed; or
the Board may, by resolution reciting that the circumstances justify such
action, authorize the issuance of the new certificate without requiring such a
bond.


                                  ARTICLE VIII.

                               GENERAL PROVISIONS

     Section 1. Dividends: The Board of Directors may from time to time declare,
and the Corporation may pay, dividends on its outstanding shares in the manner
and upon the terms and conditions provided by law and by its charter.

     Section 2. Seal: The corporate seal of the Corporation shall consist of two
concentric circles between which is the name of the Corporation and in the
center of which is inscribed SEAL; and such seal, as impressed on the margin
hereof, is hereby adopted as the corporate seal of the Corporation.

     Section 3. Waiver of Notice: Whenever any notice is required to be given to
any shareholder or director under the provisions of the North Carolina Business
Corporation Act or under the provisions of the charter or by-laws of this
Corporation, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be equivalent to the giving of such notice.

     Section 4. Fiscal Year: Unless otherwise ordered by the Board of Directors,
the fiscal year of the Corporation shall be from January 1 to December 31.

     Section 5. Amendments: Except as otherwise provided herein, these by-laws
may be amended or repealed and new by-laws may be adopted by the affirmative
vote of a majority of the directors then holding office at any regular or
special meeting of the Board of Directors.

<PAGE>

     The Board of Directors shall have no power to adopt a by-law: (1) requiring
more than a majority of the voting shares for a quorum at a meeting of
shareholders or more than a majority of the votes cast to constitute action by
the shareholders, except where higher percentages are required by law; (2)
providing for the management of the Corporation otherwise than by the Board of
Directors or its Executive Committees; (3) increasing or decreasing the number
of directors; (4) classifying and staggering the election of directors. No
by-law adopted or amended by the shareholders shall be altered or repealed by
the Board of Directors.

     No provision of the by-laws may be amended, altered or repealed by the
shareholders of the corporation unless a meeting of the shareholders is held to
act thereon and there is obtained the approval of a percentage of all the votes
entitled to be cast on at least eighty percent (80%); provided, however, that
the approval of the majority of all the votes entitled to be cast shall be
sufficient to approve any such amendment, alteration or repeal that has been
favorably recommended to the shareholders by resolution adopted by the
affirmative vote of at least seventy-five percent (75%) of the entire Board of
Directors.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>a4453559ex31i.txt
<DESCRIPTION>EXHIBIT 31(I)
<TEXT>
                                                                   Exhibit 31(i)

                                  Certification

I, J. Allen Fine, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Investors Title
     Company;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
     have:

     a) designed such disclosure controls and procedures, or caused such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

     b) {Reserved}

     c) evaluated the effectiveness of the registrant's disclosure controls and
     presented in this report our conclusions about the effectiveness of the
     disclosure controls and procedures, as of the end of the period covered by
     this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal quarter that has materially affected, or is reasonably likely to
     materially affect the registrant's internal control over financial
     reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the registrant's ability to record, process,
     summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal control
     over financial reporting.



Date: August 13, 2003

/s/ J. Allen Fine
- -------------------
J. Allen Fine
Chief Executive Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>5
<FILENAME>a4453559ex31ii.txt
<DESCRIPTION>EXHIBIT 31(II)
<TEXT>
                                                                  Exhibit 31(ii)

                                  Certification


I, James A. Fine, Jr., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Investors Title
     Company;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
     have:

     a) designed such disclosure controls and procedures, or caused such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

     b) {Reserved}

     c) evaluated the effectiveness of the registrant's disclosure controls and
     presented in this report our conclusions about the effectiveness of the
     disclosure controls and procedures, as of the end of the period covered by
     this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal quarter that has materially affected, or is reasonably likely to
     materially affect the registrant's internal control over financial
     reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a) all significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the registrant's ability to record, process,
     summarize and report financial information; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal control
     over financial reporting.


Date: August 13, 2003

/s/ James A. Fine, Jr.
- ---------------------------------------
James A. Fine, Jr.
Chief Financial Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>a4453559ex32.txt
<DESCRIPTION>EXHIBIT 32
<TEXT>
                                                                      Exhibit 32
                                                                      ----------

                                 Certification
           Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
              (Subsections (a) and (b) of Section 1350, Chapter 63
                        of Title 18, United States Code)


         Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections
(a) and (b) of section 1350, a chapter 63 of title 18, United States Code), each
of the undersigned officers of Investors Title Company, a North Carolina
corporation (the "Company"), does hereby certify that:

         The Quarterly Report on Form 10-Q for the quarter ended June 30, 2003
(the "Form 10-Q") of the Company fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained
in the Form 10-Q fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Dated:   August 13, 2003                    /s/ J. Allen Fine
                                            ----------------------------------
                                            J. Allen Fine
                                            Chief Executive Officer


Dated:   August 13, 2003                    /s/ James A. Fine, Jr.
                                            ----------------------------------
                                            James A. Fine, Jr.
                                            Chief Financial Officer


      The foregoing certification is being furnished solely pursuant to section
906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350,
chapter 63 of title 18, United States Code) and is not being filed as part of
the Form 10-Q or as a separate disclosure document.

      A signed original of this written statement required by Section 906 has
been provided to Investors Title Company and will be retained by Investors Title
Company and furnished to the Securities and Exchange Commission or its staff
upon request.


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
