Dear Shareholder:

.....For the three-month period ended May 31, 1998, revenues increased 21% to $11,520,299 from $9,487,881 for the same period last year. Net income increased 5% to $1,012,231 compared to $965,883 for the first quarter last year. Earnings per share for the quarter were $.49, an increase of $.03 or 6% from the $.46 reported for the same three month period last year.

.....The growth in revenues and operating expenses, which increased 22% to $9,762,864 from the same period last year, are attributable to the conversion of new business previously contracted, volume growth, cross-sales to existing customers and the inclusion of the Computer Bank, Inc. acquisition in our financial results as of May 1, 1998. Growth in net income did not keep pace with the revenue increase because of lower investment income and higher interest expense. Cash and cash equivalents were down nearly $5.8 million from a year ago principally due to capital outlays for the completion of the new corporate headquarters and the opening of new service centers in St. Louis, Missouri and Charleston, West Virginia. Outstandings under the company's revolving line of credit were $4,250,000 at May 31, 1998, compared to no outstandings a year ago. The proceeds were used primarily to fund the replacement of the host processor in Paducah during the third quarter of fiscal 1998 and in conjunction with the Computer Bank, Inc. acquisition, which closed on April 30, 1998.

.....At the May meeting, your Board declared a 14% increase in the quarterly dividend, from $.14 to $.16 per share. The dividend was paid June 25, 1998, to shareholders of record as of June 1, 1998.

.....The achievements of the first quarter have been particularly satisfying. Contiguous geographic expansion, finalizing a strategic acquisition and new product releases highlight some key initiatives completed. Many of these have been in the works for some time, and we are glad to see our efforts bear fruit. We:

• Opened a new service center in Charleston, West Virginia for processing customers in West Virginia and southeast Ohio;
• Completed the acquisition of Computer Bank, Inc., expanding our presence into the Texas, Arkansas and Louisiana markets;
• Announced plans to open a service center in Orrville, Ohio in August for expansion into northern Ohio;
• Saw our first customer bank come live with internet banking services through CSI; and
• Introduced CSI's newly developed check imaging solution in the metro St. Louis, Missouri service center.

.....In addition, your Board met in a strategic visioning session and discussed direction, strategies and aspirational goals necessary to move your company to a $100 million organization over the next five years.

.....This past quarter over 1,000 people attended one of four open house activities for the new CSI corporate headquarters. We realize that everyone was not able to attend, so we would like to extend an open invitation to any shareholder who would like a tour to give us a call and let us arrange one for you.

.....In May we were all deeply saddened by the unexpected death of Ann Carney, CSI Vice President and Corporate Secretary. Ann served your company for over thirty-one years and will be forever remembered for her untiring efforts and the lives she touched helping to make CSI a better company.

.....We are pleased to report the addition of an investor relations section to our web site at http://www.csiweb.com. Here you will find our most recent annual report, quarterly reports, press releases and current trading information on CSI stock. We invite you to check out this newest addition to the CSI web site.

.....Thank you for your continued confidence and support of CSI.

.....Sincerely,