Dear Shareholder:

For the three month period ended August 31, 1998, revenues increased 27% to $12,478,912 from $9,820,013 for the same period last year. Net income increased 8% to $1,155,477 compared to $1,073,062 for the second quarter last year. Earnings per share for the quarter were $.55, an increase of $.04 or 9% from the $.51 reported for the same three month period last year.

For the six month period ended August 31, 1998, revenues increased 24% to $23,999,211 from $19,307,894 for same period last year. Net income rose 6% to $2,167,708 compared to $2,038,946 for the first six months of last year. Earnings per share for the six month period were $1.04, an increase of $.07 or 7% from the $.97 reported for the same period last year.

Growth in quarterly and year-to-date revenues and operating expenses 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. The growth in net income for the quarter and year-to-date was less than the growth in revenues primarily due to higher interest expense. For the three month period ended August 31, 1998, net interest expense was $64,879 compared to net interest income of $81,791 for the same period last year. Net interest expense for the six month period ended August 31, 1998, was $117,171 compared to net interest income of $138,945 for the same period last year. Debt outstanding under the company’s revolving credit facility was reduced by $1,341,059, or 32%, to $2,908,941 at August 31, 1998, from $4,250,000 at May 31, 1998.

At the August meeting, your Board declared a quarterly dividend of $.14 per share paid September 25, 1998, to shareholders of record as of September 1, 1998.

CSI’s past quarter has been a continuum of the significant momentum that we are feeling as we move through the year. Our aggressive marketing efforts, coupled with the strongest product family in our history and our unique approach to technology planning with the community banks we serve, have clearly positioned CSI as the “nation’s premier community bank servicer.”

CSI saw expansion of our sales and marketing efforts on two fronts during this past quarter. In August, we opened our 22nd service center in Orrville, Ohio. This new facility, located about 45 minutes south of Cleveland, along with our current service center in Cincinnati, will allow for a much broader coverage of the sales opportunities in the state of Ohio. In addition, two new Sales Representatives and a National Accounts Executive joined our team. The National Accounts position will focus on developing a new market for business from the affiliate banks of large regional banks – an area where CSI has already seen success in securing contracts this past year.

On the regulatory front, CSI took the next step with our Year 2000 software preparation efforts. Beginning in July, 75 bankers participated as part of a proxy test group for the entire CSI customer base. These teams were chartered with testing and validating the CSI systems software performance in an environment simulating January 1, 2000, and beyond. Testing was completed for all CSI core applications, and in August “live” Year 2000 compliant code was released and is currently operational in all CSI banks.

We are also pleased to report on the success of our 1998 CSI Customer Conference. With attendance declining at most banking conferences around the country, CSI is proud to report that our bank attendance was at an all-time high – up 26% over last year - with nearly 400 bankers attending. This two-day event showcased CSI’s vast product line and demonstrated our aggressive new product development efforts with eight new products and many enhancements to a host of others.

Through all of the efforts mentioned above, and others, we have continued to see a very strong demand for CSI products and services. New bank contracts are right on target with our projections, and growth in the utilization of new products and services by the 340 banks we currently serve is measuring up to our expectations for these first six months of fiscal 1999. Thank you for your continued confidence and support of CSI......

.....Sincerely,