UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)

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

                  For the fiscal year ended December 31, 1997

[ ]  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 or other jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                           Identification No.)

          121 North Columbia Street, Chapel Hill, North Carolina 27514
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (919) 968-2200

          Securities registered pursuant to section 12(g) of the Act:

 Common Stock, no par value                              None
   (Title of each class)              (Name of the exchange on which registered)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) 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 if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference in Part III of the Form 10-K or any amendment to this
Form 10-K. _X_

On February 17, 1998,  the  aggregate  market value of the voting and  nonvoting
common equity held by nonaffiliates of the registrant was $63,184,292.

On February 17, 1998, the number of common shares outstanding was 2,803,915.

                       DOCUMENTS INCORPORATED BY REFERENCE

Documents                                                Form 10-K Reference
----------                                               -------------------
Portions of Annual Report to Shareholders                Part I,  Items 1 and 2
for fiscal year ended December 31, 1997                  Part II, Items 5 - 8
                                                         Part IV, Item 14
Portions of Proxy Statement (in connection with          Part III, Items 10 - 13
Annual Meeting to be held on May 12, 1998)

Location of Exhibit Index:  The Index to Exhibits is contained in Part IV herein
on page 14.


                                       1
<PAGE>


                                     PART I

ITEM 1.  BUSINESS

General

     Investors  Title  Company  ("the  Company") is a holding  company which was
incorporated  in the State of North  Carolina on February 13, 1973.  The Company
became  operational  June 24, 1976 when it acquired as a wholly owned subsidiary
Investors Title Insurance Company, a North Carolina corporation ("ITIC"),  under
a plan of exchange of shares of common stock. On September 30, 1983, the Company
acquired as a wholly owned subsidiary Investors Title Insurance Company of South
Carolina,  a South Carolina  corporation,  under a plan of exchange of shares of
common  stock.  On June 12,  1985,  its name was changed  from  Investors  Title
Insurance  Company of South  Carolina to  Northeast  Investors  Title  Insurance
Company  ("NE-ITIC").  The Company's executive offices are at 121 North Columbia
Street,  Chapel Hill,  North Carolina 27514.  The Company's  telephone number is
(919) 968-2200.

     Through  its two  wholly  owned  title  insurance  subsidiaries,  ITIC  and
NE-ITIC,  the Company underwrites land title insurance for owners and mortgagees
as a primary insurer and as a reinsurer for other title insurance companies.

     ITIC was  incorporated  in the State of North Carolina on January 28, 1972,
and became  licensed to write title  insurance in the State of North Carolina on
February 1, 1972. Since that date it has primarily  written land title insurance
as a primary  insurer and as a  reinsurer  in the States of North  Carolina  and
South  Carolina.  In addition,  the Company  currently  writes  title  insurance
through  issuing  agents or branch  offices in the States of Arkansas,  Florida,
Georgia,  Indiana,  Kentucky,   Maryland,  Michigan,   Minnesota,   Mississippi,
Nebraska,  Pennsylvania,  Tennessee,  Virginia and West  Virginia.  Agents issue
policies for ITIC and may also perform  other  services such as acting as escrow
agents.

     ITIC is also licensed to write title  insurance in the District of Columbia
and the States of Alabama, Arizona,  Colorado,  Connecticut,  Delaware, Idaho,
Illinois,  Kansas,  Louisiana,  Massachusetts,  Missouri,  Montana,  Nevada, New
Jersey, North Dakota, Ohio, Oklahoma, Texas, Utah and Wisconsin.

     NE-ITIC was  incorporated  in the State of South  Carolina on February  23,
1973, and became  licensed to write title insurance in that State on November 1,
1973. It also  currently  writes title  insurance as a primary  insurer and as a
reinsurer in the State of New York.

     Title insurance  guarantees  owners,  mortgagees,  and others with a lawful
interest in real property  against loss by reason of encumbrances  and defective
title to such property.  The  commitments  and policies  issued are the standard
American Land Title


                                       2
<PAGE>


Association  approved  forms.  Title  insurance  policies do not insure  against
future risks. Most other types of insurance protect against losses and events in
the future.

     In the State of North Carolina,  title  insurance  commitments and policies
are issued by the home office and branch offices.  ITIC has 27 branch offices in
North Carolina.

     In the ordinary course of business, ITIC and NE-ITIC reinsure certain risks
with other title  insurers for the purpose of limiting  their  exposure and also
assume  reinsurance  for certain  risks of other title  insurers  for which they
receive  additional income.  Reinsurance  activities account for less than 1% of
total premium volume.

     ITIC currently  assumes primary risks up to $1,500,000,  reinsures the next
$250,000 of risk with NE-ITIC, and all risks above $1,750,000 are then reinsured
with a non-related reinsurer.

     NE-ITIC currently assumes primary risks up to $250,000,  reinsures the next
$1,500,000 of risk with ITIC, and reinsures all amounts above  $1,750,000 with a
non-related reinsurer.

     Each insurance  subsidiaries'  risk retention  limits are  self-imposed and
more conservative than state insurance regulations.

     ITIC is the leading title insurer of North  Carolina  property and has held
this position  fourteen years.  ITIC's  financial  stability was recognized by a
Fannie Mae and Freddie Mac  approved  actuarial  firm with a rating of "A Double
Prime - unsurpassed financial stability."

     NE-ITIC's  financial  stability was  recognized by a Fannie Mae and Freddie
Mac approved  actuarial  firm with a rating of "A Prime - unsurpassed  financial
stability."

     In 1988, the Company established  Investors Title Exchange  Corporation,  a
wholly  owned  subsidiary  ("ITEC"),  to provide  services  in  connection  with
tax-free  exchanges  of  like-kind  property.  ITEC acts as an  intermediary  in
tax-free exchanges of property held for productive use in a trade or business or
for  investments,  and its income is  derived  from fees for  handling  exchange
transactions.

     South Carolina  Document  Preparation  Company,  a wholly owned  subsidiary
("SCDP"),  purchased the net assets of a former  agency to provide  services and
assistance to licensed  members of the South Carolina Bar in the closing of real
estate transactions.  SCDP was unprofitable and ceased these operations in 1995.
SCDP  currently  provides  services in  connection  with  tax-free  exchanges of
like-kind property.


                                       3
<PAGE>


Operations of Subsidiaries

     ITIC offers  primary title  insurance  coverage to owners and mortgagees of
real estate and  reinsurance of title  insurance  risks to other title insurance
companies.  Title insurance premiums written are for a one-time initial payment,
with no recurring premiums. Schedule A summarizes the insurance premiums written
during the years 1995 through 1997 by this subsidiary.

     NE-ITIC offers primary title insurance coverage to owners and mortgagees of
real estate and  reinsurance of title  insurance  risks to other title insurance
companies.  Title insurance  premiums written are for a one-time initial payment
with no recurring premiums. Schedule A summarizes the insurance premiums written
during the years 1995 through 1997 by this subsidiary.

     ITEC offers  services in  connection  with tax-free  exchanges.  Schedule A
summarizes total revenues during the years 1995 through 1997.

     SCDP had  revenues of $4,186,  $3,712 and  $40,926 in 1997,  1996 and 1995,
respectively.

     For  a  description  of  Premiums  Written  geographically,  refer  to  the
Management's  Discussion  and Analysis of Results of  Operations  and  Financial
Condition in the 1997 Annual Report to Shareholders incorporated by reference in
this Form 10-K Annual Report.

Seasonality

     Title insurance  premiums are closely  related to the level of real estate
activity and the average price of real estate sales.  The  availability of funds
to finance purchases  directly affects real estate sales.  Other factors include
consumer confidence,  economic conditions,  supply and demand, mortgage interest
rates and family  income  levels.  Historically,  the first  quarter has the
least real estate activity,  while the remaining quarters are more active.
Fluctuations in mortgage interest rates can cause shifts in real estate activity
outside of the normal seasonal pattern.

Marketing

     ITIC's  current and future  marketing plan is to provide fast and efficient
service in the  delivery  of title  insurance  coverage  through a home  office,
branch offices,  and issuing agents. In North Carolina,  ITIC operates through a
home office and 27 branch offices.  In South Carolina,  ITIC operates  through a
branch office and issuing agents located  conveniently  to customers  throughout
the State.  ITIC also operates  through issuing agents in Arkansas,  Florida,
Georgia,  Indiana,  Kentucky,   Maryland,  Michigan,   Minnesota,   Mississippi,
Nebraska, Pennsylvania, Tennessee, Virginia and West Virginia. ITIC intends


                                       4
<PAGE>


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

                                   SCHEDULE A
                        INVESTORS TITLE INSURANCE COMPANY
                              NET PREMIUMS WRITTEN
                         For The Years Ended December 31

         1997                          1996                          1995

     $29,434,155                   $20,577,779                   $15,469,394
     ===========                   ===========                   ===========



                   NORTHEAST INVESTORS TITLE INSURANCE COMPANY
                              NET PREMIUMS WRITTEN
                         For The Years Ended December 31

         1997                          1996                          1995

       $441,195                      $533,376                      $384,746
       ========                      ========                      ========



                      INVESTORS TITLE EXCHANGE CORPORATION
                                   FEES EARNED
                         For The Years Ended December 31

         1997                          1996                          1995

       $542,688                      $272,998                       $241,281
       ========                      ========                       ========

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


                                       5
<PAGE>


to establish  branch  and/or  agency  offices in the other states in which it is
licensed. A time frame has not been determined for any additional expansion.

     NE-ITIC  currently  operates through two agency offices in the State of New
York.

     ITIC and NE-ITIC strive to provide  superior service to their customers and
consider this an important factor in attracting and retaining customers.  Branch
and corporate personnel strive to develop new business relationships to increase
market  share.  The  Company's  marketing  efforts  are  also  enhanced  through
advertising.

Customers

     The Company is not dependent  upon any single  customer,  the loss of which
could have a material effect on the Company.

Reserves

     The reserves for claims for financial  reporting  purposes are  established
based  on  criteria  discussed  in  Notes  1 and 6 to the  Financial  Statements
incorporated by reference in this Form 10-K Annual Report.

Regulations

     The Company's two insurance  subsidiaries are subject to examination at any
time  by  the  licensing  states.  Title  insurance  companies  are  extensively
regulated under applicable state laws. The regulatory  authorities possess broad
powers with  respect to the  licensing  of title  insurers  and  agents,  rates,
investments,  policy forms, financial reporting, reserve requirements,  dividend
restrictions as well as examinations and audits of title insurers.

     ITIC is domiciled in North  Carolina  and subject to North  Carolina  state
insurance regulations. Examinations are scheduled every three years by the North
Carolina  Department of Insurance.  ITIC was last examined by the North Carolina
Department  of Insurance  commencing  on May 15, 1995 for the period  January 1,
1992 through December 31, 1994 with no material deficiencies noted.

     NE-ITIC is domiciled in South  Carolina and subject to South Carolina state
insurance  regulations.   NE-ITIC  was  last  examined  by  the  South  Carolina
Department  of Insurance  on November 14, 1994 for the period  December 31, 1991
through December 31, 1993 with no material deficiencies noted.  Examinations are
scheduled periodically by the South Carolina Department of Insurance.

     In accordance with the insurance laws and  regulations  applicable to title
insurance in the State of North  Carolina,  ITIC has established and maintains a
statutory premium


                                       6
<PAGE>


reserve for the  protection of  policyholders.  ITIC reserves an amount equal to
10% of current year premiums written. This amount is then reduced annually by 5%
and the net amount is accumulated in a statutory premium reserve.

     NE-ITIC  has  established  and  maintains a  statutory  premium  reserve as
required by the insurance laws and regulations of the State of New York. A $1.50
for each risk assumed under a policy or  commitment  plus  one-eightieth  of one
percent of the face amount of each commitment or policy, reduced by that portion
of the  reserve  established  15 years  earlier are  accumulated  in a statutory
premium  reserve for years up to 1985. In subsequent  years, the addition to the
reserve is calculated in the same manner but is reduced annually by 5%.

     These statutory premium reserve additions are not charged to operations for
financial  reporting  purposes and changes in the statutory premium reserve have
no effect on net income of the companies for financial reporting purposes.

     The  Company  is an  insurance  holding  company,  and is also  subject  to
regulation in the states in which its insurance subsidiaries do business.  These
regulations, among other things, require insurance holding companies to register
and file certain reports and require prior regulatory approval of intercorporate
transfers including,  in some instances,  the payment of shareholders' dividends
by the insurance  subsidiary.  All states set  requirements  for admission to do
business,  including  minimum  levels of capital and  surplus.  State  insurance
departments  have broad  administrative  powers and  monitor the  stability  and
service of insurance companies.

     In addition to the financial  statements  which are required to be filed as
part  of this  report  and are  prepared  on the  basis  of  generally  accepted
accounting  principles,   the  Company's  insurance  subsidiaries  also  prepare
financial  statements  in  accordance  with  statutory   accounting   principles
prescribed or permitted by state regulations.  Based upon the latter principles,
as of December 31, 1997, ITIC reported  $18,779,979 of capital and surplus,  and
net income of  $4,148,233;  and  NE-ITIC  reported  $2,121,078  of  capital  and
surplus, and net income of $166,303.

     ITIC and NE-ITIC both meet the minimum capital and surplus  requirements of
the states in which they are licensed.

Competition

     ITIC  currently  operates  primarily in  Michigan,  North  Carolina,  South
Carolina and Virginia.  ITIC's major  competitors  are Chicago  Title  Insurance
Company,  Commonwealth  Land Title Insurance  Company,  Fidelity  National Title
Insurance  Company,  First  American  Title  Insurance  Company,  Lawyers  Title
Insurance Corporation, Old Republic National Title Insurance Company and Stewart
Title  Guaranty  Company.  ITIC and NE-ITIC have a number of competitors in each
state where they


                                       7
<PAGE>


operate. The title insurance industry is highly competitive.  Key elements which
affect  competition  are price,  expertise,  timeliness  and quality of service,
financial strength and size of the insurer.

Investments

     The  Company and its  subsidiaries  derive a  substantial  portion of their
income  from   investments  in  bonds   (municipal  and  corporate)  and  equity
securities.  The  investment  policy is  designed  to  maintain  a high  quality
portfolio and maximize income. Some state laws impose certain  restrictions upon
the types and amounts of investments that can be made by the Company's insurance
subsidiaries.

     The Company,  ITIC, NE-ITIC, ITEC and SCDP had investment income as set out
in the following table for the years 1993 through 1997:

                           FOR THE YEARS ENDED DECEMBER 31

                     1997         1996         1995         1994         1993
                  ----------   ----------   ----------   ----------   ----------
Company           $   15,295   $   67,162   $   16,238   $   12,225   $   10,529

ITIC               1,476,807    1,161,795    1,007,255      926,976      842,367

NE-ITIC              126,426      121,007      111,939      103,600      100,576

ITEC                   9,616        2,708        3,457        3,911          968

SCDP                      44          260        1,747            0            0
                  ----------   ----------   ----------   ----------   ----------

TOTAL             $1,628,188   $1,352,932   $1,140,636   $1,046,712   $  954,440
                  ==========   ==========   ==========   ==========   ==========

     See Note 3 to the Financial Statements incorporated herein by reference for
the  major  categories  of  investments,   earnings  by  investment  categories,
scheduled   maturities,   amortized   cost,  and  market  values  of  investment
securities.

Employees

     The Company, ITEC, NE-ITIC and SCDP have no paid employees. Officers of the
Company are full-time paid employees of ITIC, which had 153 full-time  employees
and 29 part-time employees as of December 31, 1997.


                                       8
<PAGE>


Trademark

     The  Company's  subsidiary,   ITIC,  registered  its  logo  with  the  U.S.
Patent-Trademark Office in February, 1987. The loss of said registration, in the
Company's opinion, would not materially affect its business.

ITEM 2.  PROPERTIES

     The Company owns property located at 135-137 East Rosemary  Street,  Chapel
Hill, North Carolina. This property currently serves as a parking facility.

     The Company owns the office building and property  located on the corner of
North  Columbia and West Rosemary  Streets in Chapel Hill,  North Carolina which
serves  as  the  Company's   corporate   headquarters.   The  building  contains
approximately  23,000 square feet.  The Company's  principal  subsidiary,  ITIC,
leases office space in 30 locations  throughout North Carolina,  South Carolina,
Michigan and Virginia.

     See Note 9 to the Financial Statements incorporated herein by reference for
the amounts of future  minimum  lease  payments.  Each of the office  facilities
occupied by the Company and its  subsidiaries are in good condition and adequate
for present operations.

ITEM 3.  LEGAL PROCEEDINGS

     The Company and its  subsidiaries are involved in litigation on a number of
claims  which  arise in the normal  course of  business,  none of which,  in the
opinion of  management  are  expected to have a material  adverse  effect on the
Company's consolidated financial position.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were  submitted to a vote of security  holders during the fourth
quarter of the fiscal year ended December 31, 1997.

ITEM 4A.  EXECUTIVE OFFICERS OF THE COMPANY

Identification of Executive Officers

     The following table sets forth the executive  officers of the Company as of
December 31, 1997.  Each officer is appointed at the annual meeting of the Board
of  Directors  to serve until the next annual  meeting of the board or until his
respective successor has been elected.


                                       9
<PAGE>


                             Position with                  Officer     Term to
Name                  Age     Registrant                     Since       Expire
----                  ---     ----------                     -----       ------

J. Allen Fine         63     Chairman,                       1973         1998
                             Director and
                             CEO

James A. Fine, Jr.    35     President, Director and         1987         1998
                             Treasurer

W. Morris Fine        31     Executive Vice                  1992         1998
                             President and
                             Secretary

Elizabeth P. Bryan    37     Vice President                  1987         1998
                             and Assistant Secretary

L. Dawn Martin        32     Vice President                  1993         1998
                             and Assistant Secretary

     J.  Allen  Fine,  Chief  Executive  Officer  and  Chairman  of the Board of
Directors,  is the  father  of James  A.  Fine,  Jr.,  President,  Director  and
Treasurer  of the Company,  and W. Morris Fine,  Executive  Vice  President  and
Secretary of the Company.

     The business  experience  of the  Executive  Officers of the Company is set
forth below:

     J. Allen Fine was the principal  organizer of ITIC and has been Chairman of
the Board and Chief  Executive  Officer of that  Company,  the  Registrant,  and
NE-ITIC  since their  incorporation.  Mr. Fine also served as  President of ITIC
until February,  1997. Mr. Fine also serves as Chairman of the Board of ITEC and
as a Director of SCDP. Mr. Fine is the father of James A. Fine, Jr.,  President,
Director  and  Treasurer  of the Company,  and W. Morris  Fine,  Executive  Vice
President and Secretary of the Company.

James A. Fine, Jr. joined the Company in 1986 as Investment  Manager of ITIC and
NE-  ITIC.  In  1987  he was  named  Vice  President  of the  Company, and  Vice
President-Finance  of ITIC and Vice President of NE-ITIC.  In 1988, he was named
President and Director of ITEC.  In 1990, he was appointed  Director of ITIC and
in 1991 was  appointed  Director  of NE-ITIC.  In 1994,  Mr. Fine was named Vice
President and Director of SCDP. In 1996, he was named  Executive  Vice President
and Chief Financial  Officer of NE-ITIC and President of SCDP. In 1997, Mr. Fine
was named President and Treasurer and appointed a Director of the Company, named
Executive  Vice  President,  Treasurer and Chief  Financial  Officer of ITIC and
named Chairman of SCDP. James A. Fine, Jr.


                                       10
<PAGE>


is the son of J. Allen Fine,  Chief Executive  Officer and Chairman of the Board
of the Company,  and brother of W. Morris Fine,  Executive  Vice  President  and
Secretary of the Company.

     W. Morris Fine joined the Company in July, 1992, and was subsequently named
Vice  President  of the  Company,  Vice  President-Marketing  of ITIC,  and Vice
President  of ITEC.  In 1993,  Mr. Fine was named  Treasurer  of the Company and
ITIC; Vice President and Director of NE-ITIC;  and Director of ITIC and ITEC. In
1994,  Mr. Fine was named  Treasurer and Director of SCDP. In 1995, he was named
Treasurer of NE-ITIC.  In 1996, he was named  Executive Vice President and Chief
Operating  Officer  of  NE-ITIC.  In 1997,  Mr.  Fine was named  Executive  Vice
President  and  Secretary  of the Company,  and  President  and Chief  Operating
Officer of ITIC.  In 1998,  Mr.  Fine was named  President  and Chief  Operating
Officer of NE-ITIC.  Morris Fine is the son of J. Allen Fine, Chairman and Chief
Executive Officer of the Company,  and brother of James A. Fine, Jr., President,
Director and Treasurer of the Company.

Elizabeth P. Bryan joined the Company in 1985 as Controller of the Company, ITIC
and  NE-ITIC.  In  1987  she was  named  Vice  President  of the  Company,  Vice
President-Accounting  of ITIC and Vice President of NE-ITIC.  In 1988, Ms. Bryan
was named Vice President, Treasurer and Director of ITEC. In 1996, she was named
Treasurer of NE-ITIC,  and Vice  President and  Treasurer of SCDP. In 1997,  Ms.
Bryan was named  Assistant  Secretary of the Company and Assistant  Treasurer of
ITIC.

L. Dawn Martin joined the Company in February,  1991, and was subsequently named
Vice  President,  Assistant  Secretary and Director of ITEC. In 1993, Ms. Martin
was named Vice  President of the Company and Vice  President-Human  Resources of
ITIC. In 1994, Ms. Martin was named Assistant Secretary for both the Company and
ITIC, and Secretary for both ITEC and SCDP. In 1995, she was appointed  Director
of ITIC and SCDP, and named Assistant  Secretary of NE-ITIC. In 1997, Ms. Martin
was named Secretary of NE-ITIC.  In 1998, Ms. Martin was named Vice President of
NE-ITIC.


                                       11
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The high and low  sales  prices  for the  common  stock on  NASDAQ  and the
dividends  paid per common  share for each  quarter in the last two fiscal years
are  indicated  under  "Shareholder  Information"  in the 1997 Annual  Report to
Shareholders and are incorporated herein by reference.

ITEM 6.  SELECTED FINANCIAL DATA

     The selected  financial  data for the five years ended December 31, 1997 is
in  the  1997  Annual  Report  to  Shareholders  under  the  caption  "Financial
Highlights" and is incorporated  herein by reference.  The information should be
read in conjunction with the Financial Statements and Notes and the Management's
Discussion and Analysis of Results of Operations and Financial  Condition  which
are in the 1997 Annual Report to  Shareholders  and are  incorporated  herein by
reference.

ITEM 7.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF RESULTS OF  OPERATIONS  AND
         FINANCIAL CONDITION

     Management's Discussion and Analysis of Results of Operations and Financial
Condition in the 1997 Annual Report to Shareholders  is  incorporated  herein by
reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial  statements and supplementary  data in the 1997 Annual Report
to Shareholders are incorporated herein by reference.

     The financial  statement  schedules  meeting the requirements of Regulation
S-X are shown as Schedules I, II, III, IV and V included on pages 19 through 26.

     The supplementary data (Selected  Quarterly  Operating Results) in the 1997
Annual Report to Shareholders is incorporated herein by reference.


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

     There were no changes in, nor disagreements  with accountants on accounting
and financial disclosure.


                                       12
<PAGE>


                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Identification of Directors

     Information  pertaining  to  Directors  of the  Company  under the  heading
"Election of  Directors"  in the Company's  definitive  Proxy  Statement for the
Annual Meeting of Shareholders to be held on May 12, 1998 is incorporated herein
by reference.  Other information with respect to executive officers is contained
in Part I - Item 4(a) under the caption "Executive Officers of the Company".

ITEM 11.  EXECUTIVE COMPENSATION

     Information   pertaining  to  executive   compensation  under  the  heading
"Executive Compensation" in the Company's definitive Proxy Statement relating to
the Annual Meeting of  Shareholders  to be held on May 12, 1998 is  incorporated
herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information pertaining to securities ownership of certain beneficial owners
and management under the heading  "Ownership of Stock by Executive  Officers and
Certain Beneficial Owners" in the Company's  definitive Proxy Statement relating
to the Annual Meeting of Shareholders to be held on May 12, 1998 is incorporated
herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information  pertaining to certain  relationships and related  transactions
under the heading "Compensation  Committee Interlocks and Insider Participation"
in the Company's  definitive  Proxy Statement  relating to the Annual Meeting of
Shareholders to be held on May 12, 1998 is incorporated herein by reference.


                                       13
<PAGE>


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)  The following documents are filed as part of this report:

1.   Financial Statements

     The   following   financial   statements  in  the  1997  Annual  Report  to
Shareholders are hereby incorporated by reference:

     Report of Independent Accountants
     Consolidated Balance Sheets as of December 31, 1997 and 1996
     Consolidated  Statements  of Income for the Years Ended  December 31, 1997,
          1996 and 1995
     Consolidated  Statements  of  Stockholders'  Equity  for  the  Years  Ended
          December 31, 1997, 1996 and 1995
     Consolidated  Statements  of Cash Flows for the Years  Ended  December  31,
          1997, 1996 and 1995
     Notes to Consolidated Financial Statements

2.   Financial Statement Schedules

The  following  is a list of financial  statement  schedules  and the  Auditors'
Report on such schedules filed as part of this report on Form 10-K:

Investors Title Company and Subsidiaries:
Independent Auditors' Report on Financial Statement Schedules

Schedule Number               Description
---------------               -----------
I                             Summary of Investments- Other Than Investments
                                   in Related Parties
II                            Condensed Financial Information of Registrant
III                           Supplementary Insurance Information
IV                            Reinsurance
V                             Valuation and Qualifying Accounts

All other schedules are omitted,  as the required  information is not applicable
or required,  or the  information  is presented  in the  consolidated  financial
statements or the notes thereto.


                                       14
<PAGE>


3.   Exhibits

                                                       Page Number or
Exhibit                                                Incorporation by
Number         Description                             Reference to
------         -----------                             ------------

(3)(i)         Articles of Incorporation               Exhibit 1 to Form 10,
                                                       dated June 12, 1984

(3)(ii)        By-Laws                                 Exhibit 2 to Form 10,
                                                       dated June 12, 1984


(3)(iii)       Amendment to Bylaws adopted             Exhibit 3(iii) to Form
               March 10, 1997                          10-K, page 27, dated
                                                       December 31, 1996

Management contract of compensatory plan or arrangement
(Exhibits (10)(i) - (10)(xi))

(10)(i)        1988 Incentive Stock Option Plan        Exhibit 10 to Form
                                                       10-K, page 31, dated
                                                       December 31, 1989

(10)(ii)       1993 Incentive Stock Option Plan        Exhibit 10 to Form
                                                       10-K, page 32, dated
                                                       December 31, 1993

(10)(iii)      1993 Incentive Stock Option Plan--      Exhibit 10 to Form
               W. Morris Fine                          10-K, page 33, dated
                                                       December 31, 1993

(10)(iv)       Employment Agreement dated              Exhibit 10 to Form
               February 9, 1984 with                   10-K, page 14, dated
               J. Allen Fine, Chairman                 December 31, 1985

(10)(v)        Form of Incentive Stock Option          Exhibit 10(v) to Form
               Agreement under 1993 Incentive          10-K, page 29, dated
               Stock Option Plans                      December 31, 1994

(10)(vi)       Form of Amendment dated                 Exhibit 10(vi) to Form
               November 8, 1994 to Stock Option        10-Q, page 11, dated
               Agreement dated as of November 13,      March 31, 1995
               1989


                                       15
<PAGE>


(10)(vii)      Form of Stock Option Agreement          Exhibit 10(vii) to Form
               dated November 13, 1989                 10-Q, page 13, dated
                                                       March 31, 1995

(10)(viii)     1997 Stock Option and Restricted        Exhibit 10(viii) to Form
               Stock Plan                              10-K, page 29, dated
                                                       December 31, 1996

(10)(ix)       Form of Nonqualified Stock Option       Exhibit 10(ix) to Form
               Agreement to Nonemployee Directors      10-Q, page 13, dated
               dated May 13, 1997 under the 1997       June 30, 1997
               Stock Option and Restricted Stock
               Plan

(10)(x)        Form of Nonqualified Stock Option       Page 27 of this report
               Agreement under 1997 Stock Option
               and Restricted Stock Plan

(10)(xi)       Form of Incentive Stock Option          Page 34 of this report
               Agreement under 1997 Stock Option
               and Restricted Stock Plan

(13)           Portions of 1997 Annual                 Included herewith
               Report to Shareholders
               incorporated by reference
               in this report as set forth
               in Part II hereof.

(21)           Subsidiaries of Registrant              Exhibit 21 to Form
                                                       10-K, page 55, dated
                                                       December 31, 1994

(27)(i)        Financial Data Schedule - 1996          Included herewith
               Restated

(27)(ii)       Financial Data Schedule - First         Included herewith
               Three Quarters 1997 Restated

(27)(iii)       Financial Data Schedule - Fourth        Included herewith
               Quarter 1997



(B)  Reports on Form 8-K

     No reports were filed on Form 8-K for the fourth quarter.


                                       16
<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements of Section 13 or 15(d) of the Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                      INVESTORS TITLE COMPANY


                                      By:  /s/J. Allen Fine
                                           ---------------------------
                                           J. Allen Fine
                                           Chairman and Chief Executive Officer
                                      Date March 26, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities on the 26th day of March, 1998.


/s/J. Allen Fine                                /s/Loren B. Harrell, Jr.
--------------------------------------------    --------------------------------
J. Allen Fine, Chairman and Chief               Loren B. Harrell, Jr., Director
Executive Officer


/s/James A. Fine, Jr.                           /s/William J. Kennedy III
--------------------------------------------    --------------------------------
James A. Fine, Jr., President, Treasurer and    William J. Kennedy III, Director
Director (Principal Financial Officer)


/s/Elizabeth P. Bryan                           /s/H. Joe King, Jr.
--------------------------------------------    --------------------------------
Elizabeth P. Bryan, Vice President and Asst.    H. Joe King, Jr., Director
Secretary (Principal Accounting Officer)


                                                /s/James R. Morton
--------------------------------------------    --------------------------------
Lillard H. Mount, General Counsel and           James R. Morton, Director
Director


/s/David L. Francis                             /s/A. Scott Parker, Jr.
--------------------------------------------    --------------------------------
David L. Francis, Director                      A. Scott Parker, Jr., Director


                                       17
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


Investors Title Company:

We have audited the consolidated financial statements of Investors Title Company
(the  "Company") and its  subsidiaries as of December 31, 1997 and 1996, and for
each of the three years in the period ended  December 31, 1997,  and have issued
our  report  thereon  dated  January  30,  1998;  such  consolidated   financial
statements  and report are included in your 1997 Annual  Report to  Shareholders
and  are  incorporated  herein  by  reference.  Our  audits  also  included  the
consolidated  financial statement  schedules of the Company,  listed in Item 14.
These  financial  statement  schedules are the  responsibility  of the Company's
management.  Our responsibility is to express an opinion based on our audits. In
our opinion, such financial statement schedules,  when considered in relation to
the basic consolidated  financial statements taken as a whole, present fairly in
all material respects the information set forth therein.

/s/ DELOITTE & TOUCHE L.L.P.
Raleigh, North Carolina
January 30, 1998


                                       18
<PAGE>


                                                                      SCHEDULE I

                    INVESTORS TITLE COMPANY AND SUBSIDIARIES
                             SUMMARY OF INVESTMENTS
                             As of December 31, 1997

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                                          Amount at
                                                                                         which shown
                                                                                           in the
Type of Investment                                         Cost(1)       Market Value   Balance Sheet
-----------------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>             <C>        
Fixed Maturities:
  Bonds:
    States, municipalities and political
      subdivisions                                       $22,176,247     $23,172,050     $22,960,031
    Public utilities                                         599,003         619,000         619,000
    All other corporate bonds                                864,179         884,000         884,000
  Certificates of deposit                                    130,985         130,985         130,985
                                                         -----------     -----------     -----------
      Total fixed maturities                              23,770,414      24,806,035      24,594,016
                                                         -----------     -----------     -----------

Equity Securities:
  Common Stocks:
    Public utilities                                         425,433         692,803         692,803
    Banks, trust and insurance companies                     495,684       1,613,832       1,613,832
    Industrial, miscellaneous and all other                2,315,693       3,587,421       3,587,421
  Nonredeemable preferred stocks                             608,117         636,338         636,338
                                                         -----------     -----------     -----------
    Total equity securities                                3,844,927       6,530,394       6,530,394
                                                         -----------     -----------     -----------
Total investments per the consolidated balance sheet      27,615,341                      31,124,410
                                                         -----------                     -----------

Short-term investments                                     2,523,114                       2,523,114
                                                         -----------                     -----------
      Total investments                                  $30,138,455                     $33,647,524
                                                         ===========                     ===========
</TABLE>

(1)  Fixed  maturities  are shown at amortized  cost and equity  securities  are
     shown at original cost.


                                       19
<PAGE>


                                   SCHEDULE II

                    INVESTORS TITLE COMPANY (PARENT COMPANY)
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                 BALANCE SHEETS
                        AS OF DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
                                                                 1997            1996
<S>                                                          <C>             <C>        
Assets
  Cash and Cash Equivalents                                  $   535,565     $   139,668
  Investments in equity securities                                75,000          90,000
  Investments in affiliated companies at equity*              26,685,072      22,743,358
  Income taxes receivable                                        392,531         463,445
  Other receivables                                              116,039          45,232
  Deferred income tax                                             94,571          25,688
  Prepaid expenses and other assets                               68,645         218,122
  Property, net                                                1,765,509       1,791,759
                                                             -----------     -----------

Total Assets                                                 $29,732,932     $25,517,272
                                                             ===========     ===========

Liabilities and Stockholders' Equity
Liabilities:
  Accounts payable and accrued liabilities                   $   148,894     $   120,927
                                                             -----------     -----------

Stockholders' Equity:
  Common stock-No par (shares authorized,
    6,000,000; 2,855,744 and 2,855,744 shares issued and
    2,800,240 and 2,767,830 shares outstanding 1997 and
    1996, respectively)                                        1,650,350       1,650,350
  Retained earnings                                           27,933,688      23,745,995
                                                             -----------     -----------
    Total stockholders' equity                                29,584,038      25,396,345
                                                             -----------     -----------

Total Liabilities and Stockholders' Equity                   $29,732,932     $25,517,272
                                                             ===========     ===========
</TABLE>

*Eliminated in consolidation.
See notes to condensed financial statements.


                                       20
<PAGE>


                                                                     SCHEDULE II

                    INVESTORS TITLE COMPANY (PARENT COMPANY)
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                              STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
                                                    1997             1996            1995
<S>                                             <C>              <C>             <C>        
Revenues:
  Investment income-interest and dividends      $    15,295      $    67,163     $    19,430
  Rental income                                     362,889          350,331         304,931
  Miscellaneous income                                                 1,000
                                                -----------      -----------     -----------
    Total                                           378,184          418,494         324,361
                                                -----------      -----------     -----------
Operating Expenses:
  Office occupancy and operations                   133,283          142,872         121,415
  Business development                               10,927            8,593           9,079
  Taxes-other than payroll and income                30,499           49,579          47,032
  Professional fees                                  43,516           33,684          18,251
  Interest expense                                                     7,692          43,191
  Other expenses                                    184,492           36,231          92,769
                                                -----------      -----------     -----------
    Total                                           402,717          278,651         331,737
                                                -----------      -----------     -----------

Equity in Net Income of Affiliated Cos.*          4,536,715        3,745,375       3,138,446
                                                -----------      -----------     -----------
Income Before Income Taxes                        4,512,182        3,885,218       3,131,070
                                                -----------      -----------     -----------
Provision for Income Taxes                          (18,200)          41,681        (119,588)
                                                -----------      -----------     -----------
Net Income                                      $ 4,530,382      $ 3,843,537     $ 3,250,658
                                                ===========      ===========     ===========
Basic Earnings per Common Share                 $      1.63      $      1.39     $      1.16
                                                ===========      ===========     ===========
Weighted Average Shares Outstanding-Basic         2,782,449        2,772,286       2,804,632
                                                ===========      ===========     ===========
Diluted Earnings Per Common Share               $      1.60      $      1.37     $      1.15
                                                ===========      ===========     ===========
Weighted Average Shares Outstanding-Diluted       2,826,730        2,813,001       2,816,544
                                                ===========      ===========     ===========
</TABLE>

* Eliminated in consolidation
See notes to condensed financial statements.


                                       21
<PAGE>


                                                                     SCHEDULE II

                    INVESTORS TITLE COMPANY (PARENT COMPANY)
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                                                               1997             1996             1995
<S>                                                                         <C>              <C>              <C>       
Operating Activities:
  Net income                                                                $4,530,382       $3,843,537       $3,250,658
  Adjustments to reconcile net income to net cash provided
    by operating activities:
        Equity in net earnings of subsidiaries less dividends received
        of $595,000, $510,000 and $856,828 in 1997, 1996 and 1995,
        respectively                                                        (3,941,715)      (3,235,375)      (2,281,618)
      Provision for building impairment                                        150,000
      Depreciation                                                              62,362           68,560           67,793
      Benefit for deferred income taxes                                        (68,883)          (7,116)          (6,171)
      (Increase) decrease in receivables                                       (70,806)          13,607            1,216
      (Increase) decrease in income taxes receivable-current                    70,914          100,942         (311,222)
      Increase in prepaid expenses                                                (523)
      Increase (decrease) in accounts payable and accrued liabilities           27,967          (19,580)          39,861
                                                                           -----------      -----------      -----------
        Net cash provided by operating activities                              759,698          764,575          760,517
                                                                           -----------      -----------      -----------

Investing Activities:
  Purchases of securities                                                                       (30,000)
  Proceeds from sales of securities                                             15,000
  Purchases of furniture and equipment and building                            (36,112)          (2,980)         (69,605)
                                                                           -----------      -----------      -----------
        Net cash used in investing activities                                  (21,112)         (32,980)         (69,605)
                                                                           -----------      -----------      -----------

Financing Activities:
  Payments on demand notes                                                                     (362,000)        (500,000)
  Dividends paid                                                              (342,689)        (271,297)        (228,460)
                                                                           -----------      -----------      -----------
        Net cash used in financing activities                                 (342,689)        (633,297)        (728,460)
                                                                           -----------      -----------      -----------

Net Increase (Decrease) in Cash and Cash Equivalents                           395,897           98,298          (37,548)
Cash and Cash Equivalents, Beginning of Year                                   139,668           41,370           78,918
                                                                           -----------      -----------      -----------
Cash and Cash Equivalents, End of Year                                        $535,565         $139,668          $41,370
                                                                           ===========      ===========      ===========

Supplemental Disclosures:
Cash Paid During the Year For:
  Interest                                                                           0          $15,837          $35,046
                                                                           ===========      ===========      ===========
  Income Taxes                                                                ($20,231)        ($48,801)        $203,253
                                                                           ===========      ===========      ===========
</TABLE>

Supplemental Schedule of Noncash Investing Activities:
Net  unrealized  gains (losses) on investments in common stocks were $0 in 1997,
1996 and 1995.

See notes to condensed financial statements.

During 1996, the Company  exchanged assets with a value of $60,000 for an equity
investment.


                                       22
<PAGE>


                                                                     SCHEDULE II

                    INVESTORS TITLE COMPANY (PARENT COMPANY)
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


1.   The  accompanying   condensed  financial   statements  should  be  read  in
     conjunction with the consolidated financial statements and notes thereto of
     Investors Title Company and Subsidiaries.

2.   Cash  dividends  paid  to  Investors  Title  Company  by its  wholly  owned
     subsidiary, Investors Title Insurance Company, were $350,000, $350,000, and
     $836,828  in 1997,  1996 and 1995,  respectively.  Cash  dividends  paid to
     Investors  Title Company by its wholly owned  subsidiary,  Investors  Title
     Exchange Corporation were $245,000, $160,000, and $20,000 in 1997, 1996 and
     1995, respectively.

3.   Certain  1995  amounts  have  been   reclassified   to  conform  with  1997
     classifications.


                                       23
<PAGE>


                                                                    SCHEDULE III
                    INVESTORS TITLE COMPANY AND SUBSIDIARIES
                       SUPPLEMENTARY INSURANCE INFORMATION
              For the Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                Future
                                Policy               Other
                               Benefits,             Policy                             Benefits   Amortization
                   Deferred     Losses,              Claims                              Claims,   of Deferred
                    Policy      Claims                and                     Net      Losses and    Policy      Other
                 Acquisition   and Loss  Unearned   Benefits    Premium    Investment  Settlement  Acquisition  Operating   Premiums
     Segment         Cost      Expenses  Premiums    Payable    Revenue      Income     Expenses      Costs      Expenses   Written
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>      <C>          <C>       <C>      <C>          <C>         <C>            <C>      <C>           <C>
Year Ended
December 31, 1997
Title                 --       7,622,140    --        96,241   29,875,350   1,628,188   4,679,353      --       21,260,381    N/A
                                        
Year Ended
December 31, 1996
Title                 --       5,086,065    --        60,902   21,111,155   1,352,932   2,939,741      --       14,629,904    N/A
                                        
Year Ended
December 31, 1995
Title                 --       3,836,065    --        38,601   15,854,140   1,140,636   1,429,660      --       11,532,632    N/A
</TABLE>


                                       24
<PAGE>


                                                                     SCHEDULE IV
                    INVESTORS TITLE COMPANY AND SUBSIDIARIES
                                   REINSURANCE
              For the Years Ended December 31, 1997, 1996, and 1995

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                        Ceded to          Assumed from                      Percentage of
                                      Gross              Other               Other             Net              Amount
                                     Amount            Companies           Companies          Amount        Assumed to Net
--------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                  <C>                 <C>            <C>                   <C> 
YEAR ENDED
DECEMBER 31, 1997
Title Insurance Premiums           $30,058,724          $241,821            $58,447        $29,875,350           0.2%

YEAR ENDED
DECEMBER 31, 1996
Title Insurance Premiums            21,187,689           121,093             44,559         21,111,155           0.2%

YEAR ENDED
DECEMBER 31, 1995
Title Insurance Premiums            15,903,006            78,683             29,817         15,854,140           0.2%
</TABLE>


                                       25
<PAGE>


                                                                      SCHEDULE V
                    INVESTORS TITLE COMPANY AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
              For the Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                            Balance at             Additions       Additions Charged      
                             Beginning            Charged to            to Other           Deductions-       Balance at
Description                  of Period        Costs and Expenses   Accounts - Describe      describe*       End of Period
------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                   <C>                     <C>             <C>                <C>      
1997
Premiums Receivable
Valuation Provision           $200,000              $150,000               $0                      $0          $350,000

Impairment of
Building Plans                       0               150,000                0                       0           150,000

Reserves for
Claims                       5,086,065             4,679,353                0              (2,143,278)        7,622,140

1996
Premiums Receivable
Valuation Provision            120,000                80,000                0                       0           200,000

Reserves for
Claims                       3,836,065             2,939,741                0              (1,689,741)        5,086,065

1995
Premiums Receivable
Valuation Provision            120,000                     0                0                       0           120,000

Reserves for
Claims                       3,635,850             1,429,660                0              (1,229,445)        3,836,065
</TABLE>

*Payments of claims


                                       26