CSI Reports Record Fourth Quarter Net Income.

Business Editors

PADUCAH, Ky.--(BUSINESS WIRE)--April 13, 2000

Computer Services, Inc. (CSI) (stock symbol: CSVI) today reported record net income for the fourth quarter ended February 29, 2000, the tenth consecutive quarterly increase in net income.

"Net income rose 49% to $2.3 million compared with $1.5 million in the fourth quarter in fiscal 1999," stated President and CEO Steven A. Powless. "CSI's operating margins showed strong improvement in the fourth quarter as we benefited from continued expense controls, better productivity and enhanced product mix."

CSI's fourth quarter revenue was $14.6 million compared with $16.9 million in the same quarter of fiscal 1999. The 1999 results included non-recurring revenue of $3.2 million compared with $1.0 million in fiscal 2000. The non-recurring revenue was from early termination fees associated with data processing agreements. Fourth quarter revenues for fiscal 2000 were also affected by reduced sales opportunities related to Y2K and were offset somewhat by increased demand for CSI's EFT and check imaging products. CSI signed eight new customers in the fourth quarter of fiscal 2000 compared with ten customers in the same quarter last year.

"We continue to expand our check imaging services," reported Mr. Powless. "Check imaging added over $1 million in new revenue last year. We plan to add new check imaging centers in Indianapolis, Indiana, and Bloomington, Illinois, in early fiscal 2001. We also plan to consolidate our southwestern processing centers into a new Dallas operation later this year. We believe the new Dallas processing center will provide CSI with a strong platform from which we can sell our services in this large market.

"We remain focused on growing our core processing services by expanding into Western Missouri and Kansas and have a new service center planned for Kansas City to support these markets. We have already signed our first two customers in this area.

"We are enthusiastic about sales opportunities for new products like Internet banking. Demand for Internet banking grew dramatically in fiscal 2000 with 50 banks under contract at year-end. CSI was the largest reseller of Digital Insight's Internet home banking products last year. In addition, our ISP service has grown to cover 120 customer banks, and we are looking at additional services to support over the Internet," concluded Mr. Powless.

Revenues for fiscal 2000 were $53.0 million compared with $54.2 million in fiscal 1999. Revenues, before non-recurring liquidated damages, rose to $52.0 million compared with $51.0 million in fiscal 1999. Core application and on-line revenues were about even with the prior year. CSI replaced the revenue lost through deconversions in 1999 with the addition of new customers and continued volume growth. Imaging revenues almost doubled to $2.2 million, EFT revenues rose 14% to $6.7 million, and other banking revenue was up 22% to $4.3 million compared with fiscal 1999.

Operating expenses decreased to $43.2 million from $45.2 million and benefited from management's increased focus on expense control, lower goodwill amortization and increased productivity measures throughout the Company. Net non-operating income was $321,000 in fiscal 2000 compared with a net non-operating loss of $5,000 in the prior year. The $326,000 improvement was due to higher interest income. Net income for fiscal 2000 rose to $6.0 million, or $2.60 per share, compared with net income of $5.0 million, or $2.18 per share, in fiscal 1999.

CSI, the nation's premier community bank processor, serves nearly 350 community banks that have combined assets of $27 billion in the states of Kentucky, Illinois, Indiana, Texas, West Virginia, Missouri, Ohio, Tennessee, Arkansas, Louisiana, Michigan, Mississippi and Kansas. CSI's address on the World Wide Web is http://www.csiweb.com

All statements except historical statements contained herein constitute "forward-looking statements." These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside of CSI's control, which may cause actual results to differ materially from such statements. Such risks and uncertainties include, but are not limited to, economic, competitive, technological and governmental factors affecting the Company's operations, markets, services, products, prices and other factors.

                        COMPUTER SERVICES, INC.
                   Financial Highlights (Unaudited)
               (In thousands, except per share amounts)

                                      Fourth Quarter
                                    Feb. 29,   Feb. 28,
                                      2000       1999
Revenues                            $ 14,644   $ 16,911
Expenses                              11,038     13,957
                                    --------   --------
Operating income                       3,606      2,954
Other income (expense)                   223        221
                                    --------   --------
Net income                          $  2,289   $  1,540
                                    ========   ========
Net income per share:
   Diluted (a)                      $   0.99   $   0.68
                                    ========   ========
Weighted average number of
   common shares outstanding:
       Diluted                         2,307      2,293


                                     Fiscal Year Ended
                                     Feb. 29,   Feb. 28,
                                       2000       1999
                                     --------   --------
Revenues                             $ 52,978   $ 54,197
Expenses                               43,242     45,173
                                     --------   --------
Operating income                        9,736      9,024
Other income (expense)                    321         (5)
                                     --------   --------
Net income                           $  6,000   $  5,015
                                     ========   ========
Net income per share:
   Diluted (a)                       $   2.60   $   2.18
                                     ========   ========

Weighted average number of
   common shares outstanding:
       Diluted                          2,309      2,304

(a) Per share amounts adjusted for a 5% stock dividend issued on
    December 14, 1998 and December 13, 1999.