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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: September 30, 2002
----------------
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
---
Shares outstanding of each of the issuer's classes of common stock as of
September 30, 2002:
Common Stock, no par value 2,515,349
-------------------------- ---------
Class Shares Outstanding
1
INVESTORS TITLE COMPANY AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001...3
Consolidated Statements of Income:
Three and Nine Months Ended September 30, 2002 and 2001.................4
Consolidated Statements of Cash Flows:
Three and Nine Months Ended September 30, 2002 and 2001.................5
Notes to Consolidated Financial Statements...................................6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................8
Item 3. Quantitative and Qualitative Disclosures About Market Risk ..........11
Item 4. Controls and Procedures..............................................11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................................... 11
SIGNATURES....................................................................12
CERTIFICATIONS................................................................13
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- ------------------------------
Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2002 and December 31, 2001
September 30, 2002 December 31, 2001
----------------- -------------------
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 7,952,322 $ 3,452,455
Investments in securities:
Fixed maturities:
Held-to-maturity, at amortized cost 4,496,366 4,907,066
Available-for-sale, at fair value 47,888,006 42,683,660
Equity securities, at fair value 4,359,109 5,433,557
Other investments 623,296 64,888
----------------- -------------------
Total investments 57,366,777 53,089,171
Premiums receivable (less allowance for doubtful accounts:
2002: $1,505,000 and 2001: $1,405,000) 6,599,391 7,104,580
Accrued interest and dividends 677,044 725,757
Prepaid expenses and other assets 723,200 765,348
Property acquired in settlement of claims 448,617 294,510
Property, net 4,235,439 4,433,855
Deferred income taxes, net 295,653 354,024
----------------- -------------------
Total Assets (Note 5) $ 78,298,443 $ 70,219,700
================= ===================
Liabilities and Stockholders' Equity
Liabilities:
Reserves for claims (Note 2) $ 24,538,500 $ 21,460,000
Accounts payable and accrued liabilities 2,568,361 3,700,095
Commissions and reinsurance payables 512,152 281,961
Premium taxes payable 242,878 367,055
Current income taxes payable 275,060 138,821
----------------- -------------------
Total liabilities 28,136,951 25,947,932
----------------- -------------------
Stockholders' Equity:
Common stock - no par value (shares authorized 10,000,000;
2,515,349 and 2,516,298 issued and outstanding
2002 and 2001, respectively) (Note 4) 1 1
Retained earnings 47,072,166 41,928,575
Accumulated other comprehensive income (net unrealized gain on investments)
(net of deferred taxes: 2002: $1,592,041; 2001: $1,207,670) (Note 3) 3,089,325 2,343,192
----------------- -------------------
Total stockholders' equity 50,161,492 44,271,768
----------------- -------------------
Total Liabilities and Stockholders' Equity $ 78,298,443 $ 70,219,700
================= ===================
See notes to consolidated financial statements.
3
Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2002 and 2001
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30 September 30
-------------------------------- --------------------------------
2002 2001 2002 2001
------------- ------------- -------------- -------------
Revenues:
Underwriting income:
Premiums written $ 18,135,156 $ 14,849,202 $ 47,916,019 $ 41,296,179
Less - premiums for reinsurance ceded 93,735 119,168 322,676 261,143
------------- ------------ ------------- --------------
Net premiums written 18,041,421 14,730,034 47,593,343 41,035,036
Investment income - interest and dividends 680,991 661,803 2,042,810 2,019,734
Net realized gain on sales of investments 9,882 - 300,732 2,053
Other 556,775 529,310 1,513,844 1,429,083
------------- ------------ ------------- --------------
Total 19,289,069 15,921,147 51,450,729 44,485,906
------------- ------------ ------------- --------------
Operating Expenses:
Commissions to agents 8,615,016 6,762,756 22,391,778 18,842,967
Provision for claims (Note 2) 1,949,054 1,765,253 5,332,105 5,117,088
Salaries, employee benefits and payroll taxes 3,106,076 2,920,136 8,773,836 8,022,825
Office occupancy and operations 1,067,244 1,048,337 3,538,436 3,641,988
Business development 706,341 419,606 1,543,221 1,303,375
Taxes, other than payroll and income 72,707 31,386 264,301 184,258
Premium and retaliatory taxes 353,588 285,708 987,446 858,385
Professional fees 166,974 158,078 567,480 598,424
Other 142,644 147,343 247,924 290,582
------------- ------------ ------------- --------------
Total 16,179,644 13,538,603 43,646,527 38,859,892
------------- ------------ ------------- --------------
Income Before Income Taxes (Note 5) 3,109,425 2,382,544 7,804,202 5,626,014
------------- ------------ ------------- --------------
Provision For Income Taxes 963,400 778,100 2,410,000 1,736,900
------------- ------------ ------------- --------------
Net Income $ 2,146,025 $ 1,604,444 $ 5,394,202 $ 3,889,114
============= ============ ============= ==============
Basic Earnings Per Common Share $ 0.85 $ 0.63 $ 2.14 $ 1.52
============= ============ ============= ==============
Weighted Average Shares Outstanding - Basic (Note 4) 2,517,762 2,555,778 2,517,351 2,561,721
============= ============ ============= ==============
Diluted Earnings Per Common Share (Note 4) $ 0.83 $ 0.61 $ 2.08 $ 1.49
============= ============ ============= ==============
Weighted Average Shares Outstanding - Diluted (Note 4) 2,594,915 2,611,806 2,593,984 2,607,741
============= ============ ============= ==============
Dividends Paid $ 73,955 $ 85,672 $ 225,029 $ 257,017
============= ============ ============= ==============
Dividends Per Share $ 0.03 $ 0.03 $ 0.09 $ 0.09
============= ============ ============= ==============
See notes to consolidated financial statements.
4
Investors Title Company and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2002 and 2001
(Unaudited)
2002 2001
------------------ ------------------
Operating Activities:
Net income $ 5,394,202 $ 3,889,114
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 707,490 1,148,316
Amortization, net 20,060 5,408
Provision for losses on premiums receivable 100,000 125,000
Net gain on disposals of property (12,435) (21,248)
Net realized gain on sales of investments (300,732) (2,053)
Benefit for deferred income taxes (326,000) (669,622)
Provision for claims 5,332,105 5,117,088
Payments of claims, net of recoveries (2,253,605) (2,297,088)
Changes in assets and liabilities:
(Increase) decrease in receivables and other assets 341,943 (2,908,444)
Decrease in accounts payable and accrued liabilities (1,131,734) (288,079)
Increase in commissions and reinsurance payables 230,191 73,680
Increase (decrease) in premium taxes payable (124,177) 340,863
Increase in current income taxes payable 136,239 317,152
------------- -------------
Net cash provided by operating activities 8,113,547 4,830,087
------------- -------------
Investing Activities:
Purchases of available-for-sale securities (10,357,900) (7,184,820)
Purchases of held-to-maturity securities (362,470) (600,000)
Purchases of other securities (558,408) -
Proceeds from sales of available-for-sale securities 7,638,598 3,089,464
Proceeds from sales of held-to-maturity securities 773,750 10,000
Purchases of property (546,272) (339,280)
Proceeds from sales of property 49,633 58,103
------------- -------------
Net cash used in investing activities (3,363,069) (4,966,533)
------------- -------------
Financing Activities:
Repurchases of common stock, net (39,753) (206,047)
Exercise of options 14,171 33,162
Dividends paid (225,029) (257,017)
------------- -------------
Net cash used in investing activities (250,611) (429,902)
------------- -------------
Net Increase (Decrease) in Cash and Cash Equivalents 4,499,867 (566,348)
Cash and Cash Equivalents, Beginning of Year 3,452,455 4,268,713
------------- -------------
Cash and Cash Equivalents, End of Period $ 7,952,322 $ 3,702,365
============= ==============
Supplemental Disclosures:
Cash Paid During the Year for:
Income Taxes, net of refunds $ 2,601,076 $ 2,097,721
============= ==============
Noncash Financing Activities:
Bonuses and fees totaling $51,752 and $56,155 were paid for the nine months
ended September 30, 2002 and 2001, respectively, by issuance of the Company's
common stock.
See notes to consolidated financial statements.
5
Notes to Consolidated Financial Statements
September 30, 2002
(Unaudited)
Note 1 - Basis of Presentation
- ------------------------------
The consolidated financial statements include Investors Title Company
and its subsidiaries, and have been prepared in conformity with
accounting principles generally accepted in the United States of
America.
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.
Certain 2001 amounts have been reclassified to conform to 2002
classifications.
Reference should be made to the "Notes to Consolidated Financial
Statements" of the Registrant's Annual Report to Shareholders for the
year ended December 31, 2001 for a description of accounting policies.
No significant accounting policies of the Company have changed since
December 31, 2001.
Note 2 - Reserves for Claims
- ----------------------------
Transactions in the reserves for claims for the nine months ended
September 30, 2002 and the twelve months ended December 31, 2001 were
as follows:
September 30, December 31,
2002 2001
-------------- --------------
Balance, beginning of year $ 21,460,000 $ 17,944,665
Provision, charged to operations 5,332,105 6,786,263
Recoveries 457,146 873,532
Payments of claims (2,710,751) (4,144,460)
-------------- -------------
Ending balance $ 24,538,500 $ 21,460,000
============== =============
In management's opinion, the reserves are adequate to cover losses
which might result from pending and possible claims.
Note 3 - Comprehensive Income
- -----------------------------
Total comprehensive income for the three months ended September 30,
2002 and 2001 was $2,469,708 and $1,898,034, respectively. Total
comprehensive income for the nine months ended September 30, 2002 and
2001 was $6,140,335 and $4,196,236, respectively. Other comprehensive
income is comprised solely of unrealized gains or losses on the
Company's available-for-sale securities.
6
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 77,153 and
56,028 for the three months ended September 30, 2002 and 2001,
respectively and 76,633 and 46,020 for the nine months ended September
30, 2002 and 2001, respectively. Options to purchase 73,686 and 55,626
shares of common stock were outstanding for the three months ended
September 30, 2002 and 2001, respectively and 73,686 and 57,626 for
the nine months ended September 30, 2002 and 2001, respectively but
were not included in the computation of diluted EPS because the
options' exercise prices were greater than the average market price of
the common shares.
Issued and outstanding shares for the nine months ended September 30,
2002 and 2001 do not include 340,395 and 339,446 shares, respectively,
of common stock held by the Company's subsidiary, Investors Title
Insurance Company.
Note 5 - Segment Information
- ----------------------------
Income
Three Months Operating Before
Ended Revenues Income Taxes Assets
- --------------------------------------------------------------------------------------------
September 30, 2002
- --------------------------------------------------------------------------------------------
Title Insurance $18,260,367 $ 2,970,073 $71,019,015
Exchange Services 282,083 172,386 449,687
All Other 55,746 (33,034) 6,829,741
- --------------------------------------------------------------------------------------------
$18,598,196 $ 3,109,425 $78,298,443
- --------------------------------------------------------------------------------------------
September 30, 2001
- --------------------------------------------------------------------------------------------
Title Insurance $14,831,527 $ 2,165,734 $61,865,185
Exchange Services 242,711 138,651 312,777
All Other 185,106 78,159 4,115,324
- --------------------------------------------------------------------------------------------
$15,259,344 $ 2,382,544 $66,293,286
- --------------------------------------------------------------------------------------------
Income
Nine Months Operating Before
Ended Revenues Income Taxes Assets
- --------------------------------------------------------------------------------------------
September 30, 2002
- --------------------------------------------------------------------------------------------
Title Insurance $48,105,439 $ 7,480,851 $71,019,015
Exchange Services 568,880 222,782 449,687
All Other 432,868 100,569 6,829,741
- --------------------------------------------------------------------------------------------
$49,107,187 $ 7,804,202 $78,298,443
- --------------------------------------------------------------------------------------------
September 30, 2001
- --------------------------------------------------------------------------------------------
Title Insurance $41,218,843 $ 5,023,551 $61,865,185
Exchange Services 732,910 433,454 312,777
All Other 512,366 169,009 4,115,324
- --------------------------------------------------------------------------------------------
$42,464,119 $ 5,626,014 $66,293,286
- --------------------------------------------------------------------------------------------
7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
------------------------------------------------------------
The 2001 Form 10-K and the 2001 Annual Report should be read in
conjunction with the following discussion since they contain important
information for evaluating the Company's operating results and
financial condition.
Results of Operations:
----------------------
For the quarter ended September 30, 2002, net premiums written
increased 22% to $18,041,421, investment income increased 3% to
$680,991, total revenues increased 21% to $19,289,069 and net income
increased 34% to $2,146,025, all compared with the same quarter in
2001. Net income per basic and diluted common share increased 35% and
36% to $.85 and $.83, respectively, as compared with the year ago
period. For the quarter ended September 30, 2002, the title insurance
segment's operating revenues increased 23% versus the third quarter of
2001, while the exchange services segment's revenues increased 16% for
the three months ended September 30, 2002 compared with the prior year
quarter.
For the nine months ended September 30, 2002, net premiums written
increased 16% to $47,593,343, investment income increased 1% to
$2,042,810, revenues increased 16% to $51,450,729, net income
increased 39% to $5,394,202, and net income per basic and diluted
common share increased 41% and 40% to $2.14 and $2.08, respectively,
as compared with the same period in 2001. For the nine months ended
September 30, 2002, the title insurance segment's operating revenues
increased 17% versus the same period in 2001, while the exchange
services segment's operating revenues decreased 22% for the nine
months ended September 30, 2002 compared with the same period in 2001.
Fueled by near 40-year lows in interest rates, mortgage lending in the
third quarter rose dramatically. Led by consumer demand for
refinancing, the volume of total loan originations is on pace to
surpass the previous year's record level. According to the Freddie Mac
Weekly Mortgage Rate Survey, the monthly average 30-year fixed
mortgage interest rates decreased to 6.69% for the nine months ended
September 30, 2002 compared with 7.04% for the nine months ended
September 30, 2001. The volume of business increased in the third
quarter of 2002 as the number of policies and commitments issued rose
to 86,589, an increase of 5% compared with 82,322 in the same period
in 2001. Policies and commitments issued for the nine months ended
September 30, 2002 were 230,172 compared with 215,663 in 2001, an
increase of 7%.
Branch net premiums written as a percentage of total net premiums
written were 35% and 38% for the three months ended September 30, 2002
and 2001, respectively, and 36% and 38% for the nine months ended
September 30, 2002 and 2001, respectively. Net premiums written from
branch operations increased 13% and 34% for the three months ended
September 30, 2002 and 2001, respectively, as compared with the same
periods in the prior year. For the nine months ended September 30,
2002 and 2001, net premiums written from branch operations increased
10% and 29%, respectively, as compared with the same prior year
periods.
Agency net premiums written as a percentage of total net premiums
written were 65% and 62% for the three months ended September 30, 2002
and 2001, respectively, and 64% and 62% for the nine months ended
September 30, 2002 and 2001, respectively. Agency net premiums
increased 28% and 54% for the three months ended September 30, 2002
and 2001, respectively, as compared with the same periods in the prior
year. For the nine months ended September 30, 2002 and 2001, net
premiums written from agency operations increased 20% and 54%,
respectively, as compared with the same prior year periods.
8
Shown below is a schedule of premiums written for the nine months
ended September 30, 2002 and 2001 in all states and districts where
the Company's two insurance subsidiaries, Investors Title Insurance
Company and Northeast Investors Title Insurance Company, currently
underwrite insurance:
2002 2001
---- ----
Alabama $ 445,882 $ 632
Arkansas 39,550 -
District of Columbia 250 -
Florida 1,745 -
Georgia 45,182 218,410
Illinois 6,816 -
Indiana 106,159 1,452
Iowa - 3,788
Kentucky 823,431 -
Maryland 1,029,080 680,890
Michigan 7,478,133 7,812,916
Minnesota 873,195 1,069,902
Mississippi 695,708 20,103
Nebraska 842,352 710,497
New Jersey 23,130 -
New York 2,356,430 2,411,705
North Carolina 17,178,141 15,644,222
Ohio 26,210 30,736
Pennsylvania 2,677,715 2,309,698
South Carolina 4,106,633 2,940,957
Tennessee 2,369,835 1,699,465
Virginia 5,579,815 4,820,625
West Virginia 1,183,924 886,986
Wisconsin 10,776 22,783
----------- -----------
Direct Premiums 47,900,092 41,285,767
Reinsurance Assumed 15,927 10,412
Reinsurance Ceded (322,676) (261,143)
----------- -----------
Net Premiums $47,593,343 $41,035,036
============= ============
Total operating expenses increased 20% and 12% for the three and
nine-month periods ended September 30, 2002 compared with the same
periods in 2001. This increase was due primarily to additional
commissions relating to increase in premium volume.
9
The provision for claims as a percentage of net premiums written was
11% for the three and nine months ended September 30, 2002, versus 12%
for the same periods in 2001.
The provision for income taxes was 31% of income before income taxes
for the three months ended September 30, 2002 versus 33% for the same
period in 2001. For the nine months ended September 30, 2002 and 2001,
the provision for income taxes was 31% of income before income taxes.
Liquidity and Capital Resources:
--------------------------------
Net cash provided by operating activities for the nine months ended
September 30, 2002, amounted to $8,113,547 compared with $4,830,087
for the same nine-month period during 2001. The increase is primarily
the result of a decrease in receivables and other assets, an increase
in net income and a net decrease in noncash adjustments to reconcile
net income to net cash, offset by a decrease in the total payables.
On May 11, 1999, the Board of Directors approved the repurchase of
200,000 shares of the Company's common stock. Pursuant to this
approval, the Company repurchased 200,000 shares prior to 2002 at an
average price of $12.50 per share including 17,914 shares purchased at
an average price of $14.66 in the nine months ended September 30,
2001.
On May 9, 2000, the Board of Directors approved the repurchase of an
additional 500,000 shares of the Company's common stock. Pursuant to
this approval, the Company repurchased a total of 37,238 shares at an
average price of $15.20, of which 5,054 shares were purchased at an
average purchase price of $18.11 in the nine months ended September
30, 2002.
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 nine months ended September 30,
2002, 23,000 options have been granted. As of November 5, 2002, no
shares have been issued under this plan.
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 its
investment portfolio in the form of short-term investments and other
readily marketable securities.
10
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 with 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 dependence of the Company 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 2001 Annual Report on Form
10-K.
Item. 4. Controls and Procedures
-----------------------
Based on their evaluation of the Company's disclosure controls and
procedures, which was completed within 90 days prior to the filing of
this report, the Chief Executive Officer and the Chief Financial
Officer of the Company have concluded that the Company's disclosure
controls and procedures are 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,
is 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 are effective in ensuring that such
information is accumulated and communicated to the Company's
management to allow timely decisions regarding required disclosure.
There were no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
(a) Exhibits
--------
(99)(i) 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)
(b) Reports on Form 8-K
--------------------
There were no reports filed on Form 8-K for this
quarter.
11
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
(Chief Financial Officer and
Chief Accounting Officer)
Dated: November 12, 2002
12
Certifications
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 quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 12, 2002
----------------
/s/ J. Allen Fine
- -----------------
J. Allen Fine
Chief Executive Officer
13
Certifications (continued)
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 quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 12, 2002
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/s/ James A. Fine, Jr.
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James A. Fine, Jr.
Chief Financial Officer
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