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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549
                                    FORM 10-K

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

                   For the Fiscal Year Ended December 31, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-21980

                              CFI PROSERVICES, INC.
             (Exact name of registrant as specified in its charter)

                  OREGON                                     93-0704365
(State or other jurisdiction of incorporation   (I.R.S. Employer Identification

           or organization)                            No.)

400 SW SIXTH AVENUE, PORTLAND, OREGON                                   97204
(Address of principal executive offices)                             (Zip Code)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 503-274-7280

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                           COMMON STOCK, NO PAR VALUE

                                (Title of Class)
                                 ---------------
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 this Form 10-K,  or any  amendment to
this Form 10-K. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant  was  $30,352,440 as of February 29, 2000 based upon the last closing
price as reported by the Nasdaq  National  Market System ($8.00 per share).  The
number of shares outstanding of the Registrant's Common Stock as of February 29,
2000 was 5,253,972 shares.

                                 ---------------
                       DOCUMENTS INCORPORATED BY REFERENCE

The Registrant has incorporated by reference portions of its Proxy Statement for
its 2000 Annual  Meeting to be filed on or about April 20, 2000 into Part III of
this Form 10-K.

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<PAGE>

                              CFI PROSERVICES, INC.
                           DBA CONCENTREX INCORPORATED
                          1999 FORM 10-K ANNUAL REPORT
                                TABLE OF CONTENTS

<TABLE>

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<S>            <C>                                                                                    <C>

               PART I

Item 1.        Business                                                                                  2

Item 2.        Properties                                                                               14

Item 3.        Legal Proceedings                                                                        14

Item 4.        Submission of Matters to a Vote of Security Holders                                      15

               PART II

Item 5.        Market for Registrant's Common Equity and Related Stockholder Matters                    15

Item 6.        Selected Financial Data                                                                  16

Item 7.        Management's Discussion and Analysis of Financial Condition and Results of Operations    18

Item 7A.       Quantitative and Qualitative Disclosures about Market Risk                               26

Item 8.        Financial Statements and Supplementary Data                                              26

Item 9.        Changes in and Disagreements With Accountants on Accounting and Financial Disclosure     26

               PART III

Item 10.       Directors and Executive Officers of the Registrant                                       27

Item 11.       Executive Compensation                                                                   27

Item 12.       Security Ownership of Certain Beneficial Owners and Management                           27

Item 13.       Certain Relationships and Related Transactions                                           27

               PART IV

Item 14.       Exhibits, Financial Statement Schedules and Reports on Form 8-K                          28

Signatures                                                                                              34

</TABLE>

                                       1

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                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

           CFI  ProServices,  Inc.  (doing  business as Concentrex  Incorporated
pending  change in the legal  name of the  company)  is a  leading  provider  of
technology-powered  solutions to the financial services industry. During 1999 we
reorganized  ourselves  into two  product  groups:  the  Software  Products  and
Services group and the e-Commerce  group.  We offer a broad range of traditional
software  products  and  services,  which is the product  group that we are both
growing  and using to finance  our  innovative  business-to-business  e-commerce
solutions.

           Our  Software  Products  and  Services  group  supports  a  financial
institution's   mission   critical   functions   including  back  office  "core"
processing,  loan origination,  new account opening, branch automation and cross
selling.   We  support  the  key  sales   functions   a  financial   institution
traditionally relies on to make money, which are usually delivered  face-to-face
or over the telephone. We believe that financial institutions will need to offer
those same  functions  over the  Internet.  Thus, we have focused our efforts on
both  Internet  banking  software  for account  servicing  and  Internet-enabled
versions of our  traditional  software  for lending and account  opening.  These
integrate  with  other  points  of  customer  contact  and  enable  a  financial
institution to serve its customers,  both in person and over the Internet,  with
consistent, integrated solutions.

           We believe  our focus on the  aspects of the  Internet  that enable a
financial  institution to make money,  and our  integration of our products with
traditional  points of  customer  contact,  will  provide us with a  competitive
advantage.  Further,  we believe our ability to perform loan origination and new
account  opening  functions in compliance  with the extremely  complex laws that
apply to a financial  institution will enable us to increase our market share in
the Internet  delivery  channel as we were able to do in  traditional  settings.
There is no exception to the regulatory  requirements of a financial institution
because it is doing  business over the Internet.  Indeed,  early signs  indicate
that issues such as privacy  will make that burden even  greater.  We believe we
are uniquely positioned to address that legally mandated need. Integrated within
our  business  is  a  "dot.com"   product  group  that  will  enable   financial
institutions to offer true banking transactions over the Internet.  We also have
developed,  and plan to begin  offering  during  the second  quarter of 2000,  a
private business-to-business portal for our financial institution customers that
will allow them to offer  additional  products,  such as insurance,  leasing and
Internet-based training, to their customers via the Internet and in face-to-face
sessions supported by the Internet.

           Our  products  and  technologies  are  designed  to address  critical
functions of a financial  institution at key points of customer  contact.  These
products and  technologies  help financial  institutions  of all types and sizes
continue to thrive in the face of increasing competition.  We intend to continue
our long history of using new  technologies to build profitable  businesses.  We
combine our technology,  banking, and legal expertise to deliver knowledge-based
solutions that enable financial institutions to simplify key business processes,
improve productivity, strengthen customer relationships, and maintain compliance
with both  internal  business  policies  and  external  government  regulations.
Measured  at  the  holding  company  level,   there  are  over  5,000  financial
institutions  using one or more of our  products,  ranging in size from the very
largest  commercial banks to independent  community banks,  thrifts,  and credit
unions.

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SOFTWARE PRODUCTS AND SERVICES GROUP

           The  software  products  and  services  group  consists  of our  core
processing,  application  software  and  ancillary  products  that  we  sell  to
financial  institutions.  The core or "host"  processing  function serves as the
software  backbone  of a  financial  institution.  The key  data of a  financial
institution  resides within the core  processing  system.  Core  processing also
includes functions such as loan accounting,  account processing, general ledger,
and similar  enterprise-wide  systems. Our leading core processing system offers
real-time,  database-oriented  processing  for  all  the  critical  back  office
functions  of a financial  institution.  Our current  system is oriented  toward
larger credit  unions but it is capable of replacing  the older core  processing
systems that community  banks and thrifts use. We are in the process of revising
our core  processing  system to meet the  requirements  of  community  banks and
thrifts.

           We  entered  the  core  processing   business  in  1999  through  two
acquisitions.  In January 1999 we acquired Modern Computer  Systems,  Inc. (MCS)
which  provides an in-house  PC-based  solution for small  commercial  banks and
small  credit  unions.  In  August  1999  we  acquired   ULTRADATA   Corporation
(ULTRADATA) which provides real-time information  management software for larger
credit unions.

           Additionally,  within the software  products  and  services  group we
offer software  applications focusing on loan origination and branch automation.
We offer Windows(R)-based  solutions for teller functions,  new account opening,
cross selling, call centers, and origination of consumer,  commercial,  and real
estate loans.  Because these products are very  knowledge-intensive,  there is a
major  barrier to entry in these  markets and we have been able to obtain either
dominant or leading market positions in many of these areas.

E-COMMERCE PRODUCT GROUP

           Our  second  product  group  is  e-commerce,  which  includes  a  new
generation of Internet  banking  products for both  consumer and small  business
customers, plus a business-to-business  portal that will enable us to connect to
our  over  5,000  financial   institution   customers  and  allow  us  to  offer
supplemental services and products through the Internet.

           Concentrex  was an early  player in the area of home  banking,  a key
element  of our  e-commerce  product  group,  entering  the  market  in 1992 and
enabling the first Internet transaction between a financial  institution and its
customer in 1994.  We also own a bill payment  service,  which serves our online
banking customers.  In May 1999 we acquired MECA Software L.L.C.  (MECA),  which
had  launched the  personal  financial  management  software  business  with its
Managing  Your Money(R)  product and which  recently has focused on research and
development of Internet components for financial institutions.  By combining the
technologies  we acquired from MECA with what we have developed  internally,  we
offer Internet banking  software,  either in-house at the institution or through
our own Internet service bureau. We are in the process of web-enabling  versions
of our  loan  origination,  new  account  opening  and  various  other  software
products.

         Relying  on  technology   developed  by  MECA,  we  have   developed  a
business-to-business  Internet  portal for our customers,  called the Concentrex
Intelliportal  Network.  Starting in the second  quarter of 2000,  we anticipate
that this  network will offer  multiple  "channels"  of products  and  services.
Initial  channels  will be offered  free and will include  customer  support and
compliance  advice.  We intend to offer  additional  fee-based  product channels
later in 2000,  including  products and services such as insurance,  leasing and
Internet-based training.

      We  believe  that  banks,  credit  unions  and  thrifts  are  looking  for
integrated  solutions that address a broad range of their needs. We are going to
be offering the  industry's  only  integrated,  comprehensive  suite of software
solutions  that  provides  true Internet  banking  functionality  supported by a
complete suite of  traditional  application  and core  processing  software.  We
believe  a  significant  opportunity  exists to  market  our  fully  integrated,
end-to-end solutions, including our new e-commerce products and services, to our
existing base of over 5,000 customers and to new customers.  More than 1,000,000
consumers now use Concentrex e-commerce products.

                                       3

<PAGE>

RECURRING REVENUE AND FINANCIAL STRATEGY

           We generate  recurring revenue from software  maintenance  agreements
and by  providing  application  services.  In  1999  service  and  support  fees
accounted  for  approximately  45% of total  revenue.  Substantially  all of our
customers  subscribe  to service and support  programs,  which  provide  ongoing
product  enhancements  and  updates  to  facilitate   compliance  with  changing
regulations.  In our e-commerce  product group, we are increasingly  focusing on
our service  bureau  offering so that we can increase the  percentage of revenue
attributable to our application  service  provider  ("ASP")  business.  Although
these  revenues  are  minimal  at this time  (the  service  bureau  went live in
November 1999), we believe that our ASP business model  represents a substantial
opportunity to grow predictable revenues and earnings.

           Prior to 1995 the vast majority of our revenues were  generated  from
the license of standard  versions of our loan  origination  and account  opening
software applications. These products were usually not customized except through
a  separate  contract  with the  customer.  Since  that time we have  derived an
increasing  percentage  of revenue  from  projects  that are of  greater  scope,
including  implementation of projects for new core processing customers and from
sales to large financial institutions. We believe that the project business will
continue to contribute a significant and increasing  percentage of total revenue
and should provide added visibility to revenue as we build a backlog of upcoming
projects. Over time, we believe recurring revenues from e-commerce and other ASP
products,   and  revenues  from  project   business,   will   generate   greater
predictability in revenues and earnings.

THE FINANCIAL SERVICES INDUSTRY

           The  financial  services  industry  is  undergoing  a period of rapid
change characterized by consolidation,  changing regulations,  focus on Internet
delivery of financial services in addition to traditional branch delivery, and a
desire to offer new types of  financial  services.  In response to this  rapidly
changing  market,  commercial  banks  are  consolidating  in  order  to  achieve
operational  efficiencies  and  increased  revenues.  In addition,  all types of
financial institutions are embracing technological solutions that enable them to
automate  operations,  redirect  routine  transactions  to  more  cost-effective
channels  such as electronic  banking and call centers,  and develop new service
and sales delivery channels with new products.  Further, as the consolidation of
large institutions  continues,  the community bank and credit union sectors have
shown renewed vitality, including an increasing number of new start-up community
banks and thrifts.

           CONSOLIDATION.  Consolidation  continues  at a rapid pace  within the
financial  services  industry,  particularly  among large banks. We believe that
this trend is leading to an increasingly  two-tiered  market  consisting of very
large,  multi-bank holding companies and smaller community banks,  thrifts,  and
credit unions. Each size of organization faces unique challenges.

           Large  banks  that have  grown  through  acquisition  must  integrate
disparate core processing  systems,  which often lack the flexibility  needed to
easily use and deliver  information  across  different  systems.  Bank  customer
service   representatives   often  are  limited  in  their   ability  to  access
comprehensive  customer information on one screen, which limits their ability to
cross-sell  products and services.  Banks must also be able to support  customer
transactions in a number of channels,  such as electronic  banking and telephone
call  centers.  Accordingly,  large  banks  increasingly  find it  necessary  to
centralize  data from several  disparate  core  processing  systems.  Interstate
banking presents these  institutions  with additional and costly  administrative
and legal issues  relating to  compliance  with complex and changing  regulatory
requirements across states. We believe large institutions will increasingly look
to outside providers for critical  functions that can be implemented  within the
overall technology strategy of the institution, such as the loan origination and
branch automation solutions we offer.

           Smaller community  institutions,  including both commercial banks and
credit unions, face similar operational  difficulties.  Lacking the economies of
scale of larger banks,  smaller  institutions find it increasingly  necessary to
exploit  technological  solutions  that enable them to reduce  operating  costs,
generate  additional  revenues  from  existing  customers  and focus on specific
market niches. In addition, compliance with regulatory requirements

                                       4

<PAGE>

can be more  burdensome  to these  smaller  institutions  given  their  resource
limitations.  We believe that these  institutions  will  continue to look toward
outside providers such as Concentrex to obtain the technology they need.

           CHANGING  REGULATIONS.  Financial  institutions  in the United States
remain highly  regulated  with respect to all  functions,  but  especially  with
respect  to  transactions  with  their  customers.  These  regulations  exist at
federal, state and local levels, and an institution must comply with each level.
Requirements  include complex disclosures for consumer loans,  substantive rules
covering the decision  making for all loans,  filing and type size  requirements
for documents,  constraints on the  relationships  an institution  can form with
respect to related products such as title insurance on a home mortgage,  privacy
rules for the use of information  (especially  with respect to third parties and
even  affiliates),  and  limitations  on  interest  and  other  charges  that an
institution can impose.  Even as commercial banks have gained greater ability to
have offices in multiple  states,  the new interstate  banking laws have imposed
additional  constraints  on  the  rules  for  lending  across  state  lines.  To
understand  and remain in  compliance  with the  numerous,  complex and changing
regulations,  a financial  institution  must  invest  significant  resources  in
developing a compliance  infrastructure.  We believe our long-standing expertise
in providing  software  that  incorporates  compliance  with various  regulatory
constraints will continue to set us apart in this market.

           The Financial  Modernization Act of 1999 presents both  opportunities
and challenges for financial  institutions  in terms of powers and  regulations.
Clearly, it is now possible for a financial institution to offer a wide range of
products without the artificial  constraints that have separated the business of
investment banking,  commercial banking and insurance since the 1930s.  However,
each aspect of the institution  must still meet the requirements for the product
group being offered or  underwritten.  This presents a particular  challenge for
community sized institutions, and a significant part of Concentrex's strategy is
to act as a  "concentrator"  bringing  together a variety of these services on a
group basis. This strategy is best reflected in our business-to-business portal,
the Concentrex  Intelliportal  Network,  which will offer a variety of insurance
and other  products  that most  community-sized  institutions  would not, in our
view, be able to offer on their own.  Perhaps the greatest  challenge,  however,
comes from the serious  concerns  being  raised over  privacy and the sharing of
information outside the institution and its third party processors. Based on our
lengthy  and  extensive  relationship  with  many of our  customers,  we have an
opportunity to further assist our customers by also providing  privacy-sensitive
services that do not require the institution to share  sensitive  information on
customers  with other  third  parties.  These  rules are not yet  clear,  but we
believe they will present a further market  opportunity to combine our expertise
in banking,  technology,  and regulatory  issues to create a solution to benefit
our customers.

           ADDING  INTERNET  DELIVERY  CHANNELS.  Financial  institutions of all
sizes are  increasingly  recognizing that the value-added role of branch offices
lies not in their  traditional  capacity  as a  service  center,  but as a sales
channel for financial products and services. In order to make these new delivery
channels attractive and user-friendly,  we believe that consumers require access
to consolidated information and services that are consistent across all delivery
channels.  To accomplish  this,  institutions  will need  software,  such as the
middleware  we  provide,  to  connect  their  products  to each other and to the
various host systems they use. Further,  we believe the market will require most
financial  institutions to add some type of Internet access for their customers,
creating a significant  opportunity for Concentrex and similar providers of such
software.  Bankers already appear to be concerned that they may lose their best,
upscale  customers if they fail to offer robust online banking.  Operating costs
are  expected  to  be  reduced  as  online   banking   increases  and  operating
efficiencies  grow. We believe the  integration of our software  provides better
cost savings, more consistent delivery and gives us a market advantage. Further,
as  Internet  banking  moves  beyond the  current  approach  and toward  account
servicing, we believe our ability to perform fully compliant lending and account
opening functions through the Internet will offer us a unique market opportunity
to serve our heavily regulated customers.

           Because  regulatory   requirements  are  often  triggered  simply  by
interaction  between a  financial  institution  and its  customer,  institutions
remain  subject to  compliance  regulations  even as they  migrate  their  sales
efforts to new delivery channels such as Internet banking.  Increasingly,  these
regulations  extend beyond simple  disclosure or form content  requirements  and
focus on customer  data  collection  and  analysis as well as internal  business
procedures.  This data  collection  and  analysis  must be  obtained  from,  and
available  to,  multiple  delivery  channels.  Data  collection  and analysis is
complicated by the emergence of new channels for interacting  with customers and
potential  customers.  We believe that financial  institutions  will continue to
benefit from our products and services,

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especially our newer generation of Internet  products and services,  because the
institutions  must still  comply  with the complex  regulatory  burden even if a
service is delivered  online rather than in person.  Indeed,  we anticipate that
privacy and related  concerns will increase the  regulatory  burden as financial
institutions move services onto the Internet.

           NEW FINANCIAL SERVICES PRODUCTS.  Recognizing the profit potential in
expanding their product offerings,  financial institutions are no longer content
to offer solely the loan and deposit account  products they  traditionally  have
sold to  customers,  although  those  products  will  remain  central  to  their
profitability.  They also seek to add other types of financial services products
such as insurance and leasing.  Such combinations of services are no longer rare
among  larger  institutions.  Financial  reform  recently  passed by Congress is
expected  to make  it even  easier  for  large  institutions  to  provide  these
offerings.

           The  products  sold by  credit  unions  and  thrifts  have  been less
regulated  than those sold by other  financial  institutions.  Credit  unions in
particular  have  demonstrated  an ability to sell a wide  variety of  financial
services through cooperative  efforts. We believe that most community banks will
not have the  resources  needed  to offer  such  combinations  of  services  and
products on their own. As these products become an increasing focus of community
banks,  we believe that a market  opportunity  for service  center  offerings to
multiple  institutions  will  exist.  We have  opened a service  center to offer
Internet banking to our customers,  including  community banks, so that they are
not required to maintain hardware and software in-house.  We believe that we can
fulfill the needs of community  banks to offer more products to their  customers
by adding additional  financial service products to our service center and, that
by acting as an  application  service  provider,  we will enhance our  recurring
revenues,  which we believe will increase the predictability of our revenues and
earnings.

         THE CONCENTREX SOLUTIONS

           We offer solutions  tailored to the various market product groups and
market needs of  financial  institutions.  Although  regulatory  and  technology
issues facing financial institutions overlap a great deal, the approach taken by
a  particular   institution,   and  therefore  the  correct  solution  for  that
institution, depends on the size and type of institution.

           Each of our solutions  includes a significant focus on the regulatory
issues facing financial  institutions of all types.  Particularly in the area of
loan  origination  and new  account  opening,  we believe we have a  competitive
advantage by virtue of our ability to incorporate regulatory compliance into the
software solution. Further, as lending and account opening become more common on
the  Internet,  we  believe  that this  advantage  will  increase.  Transactions
conducted  over  the  Internet  are not  exempt  from the  customary  regulatory
requirements financial institutions must comply with, including Federal Truth in
Lending and Truth in Savings disclosures and a myriad of often conflicting state
and local requirements.

           A key aspect to our success  has been and will likely  continue to be
our  ability  to build our  technology,  regulatory  and  financial  institution
expertise  into our  solutions  and to  integrate  these  solutions so that they
function  effectively  together.  We rely on a variety  of  knowledge-based  and
technical core competencies. Our vertical market focus on the financial services
industry  has  enabled  us  to  develop  specialized   knowledge  and  expertise
pertaining to business processes and regulations affecting the industry.

           LARGE FINANCIAL  INSTITUTIONS.  For large commercial  banks, we offer
solutions  that  fit  within  the  overall  strategic  technology  plan  of  the
institution.  Large banks develop and implement their own technology  plans, but
rely  on  suppliers  such  as  Concentrex   for  key  elements   including  loan
origination,  branch  automation,  call  centers,  and  e-commerce  products and
services. We offer large financial institutions solutions in each of these areas
and segregate our sales force to address this market.

           Our  software  applications  and  e-commerce  products  enable  large
financial  institutions to use data among disparate and often  incompatible host
processor  platforms.  Our ability to  integrate  among and between our suite of
products also allows large institutions to work with fewer vendors, specifically
ones that provide comprehensive

                                       6

<PAGE>

software solutions. We also believe that our market presence in over 70% of U.S.
banks  above $2 billion in asset  size  provides  an  excellent  opportunity  to
cross-sell additional products and systems.

           CREDIT  UNIONS.  The credit union  market,  unlike  large  banks,  is
characterized by real-time  processing.  Our acquisition of ULTRADATA,  with its
competitive core processing solution and over 400 credit union customers, allows
us to be a player in this  market.  We will  continue  to support  this  market,
including  offering  expanded  capabilities  through  our  other  solutions  for
commercial loans. Credit unions are now entering the commercial loan market, and
this expansion  presents an opportunity for us to rely on our other solutions to
enhance our presence in the credit  union  market.  Similarly,  our credit union
Internet banking product will be enhanced due to the expertise of our e-commerce
group.

           COMMUNITY   BANKS  AND  THRIFTS.   The  community   bank  and  thrift
marketplace  offers  several  opportunities  for our solutions.  First,  we will
continue to sell our traditional software applications to all sizes of banks and
thrifts,  including  lending,  mortgage,  sales and service and e-commerce.  For
these solutions we will rely on our ability to connect our products to a variety
of host processing systems used by community banks and thrifts.  Where possible,
we will  attempt to form  alliances  with other host  companies  to augment  the
offerings of those  companies with our solutions.  We have grown,  and expect to
continue to grow, in significant part through the sale of software applications.

           In  addition to our  traditional  software  applications,  we plan to
offer our real time host processing to community  banks and thrifts.  We plan to
augment  the  ULTRADATA  solution  to meet the  needs of  commercial  banks  and
thrifts,  and believe that the  real-time  nature of that system will give it an
advantage  over batch  processing  systems our  competitors  offer to  community
banks. Further, we will offer this core processing solution tightly coupled with
the  other  software   applications  already  marketed  by  us,  especially  our
e-commerce solutions.

           Our products  provide a number of benefits to financial  institutions
by addressing regulatory  requirements,  system connectivity issues and internal
business  process   challenges  faced  by  institutions  in  their  increasingly
competitive business environment.  Using our solutions,  financial  institutions
are able to  simplify  sales and  service  processes  and  improve  productivity
through reduced  operating costs and expanded  capacity.  The ability to view an
entire customer account relationship on-screen,  for example,  enables financial
institutions  to cross  sell  their  products  to  customers  and to  strengthen
relationships  with their customers at each point of contact and across multiple
delivery channels.

           With respect to each of our solutions,  we offer  implementation  and
training services and customer support.  Essentially all customers  subscribe to
these  services,  and we derive a substantial  portion of our recurring  revenue
from the relationship created when a financial  institution selects and installs
one of our products.

         THE CONCENTREX STRATEGY

           Our strategic objective is to be the leading full service provider of
innovative  technology  solutions that enable our customers to succeed. In doing
so, we strive to  achieve  rapid,  predictable,  and  consistent  growth in both
revenues  and  earnings.  We intend to achieve this  objective by combining  our
expertise in regulatory issues, banking and technology.  Primary elements of our
strategy include:

           PRODUCT QUALITY.  Financial  institutions require that their software
and  hardware  solutions  function at very high levels of quality.  We have been
able to meet the demands of many of the largest  financial  institutions  in the
country and believe that a significant  focus on product  quality is a necessary
element  of our  success.  Further,  as  systems  become  more  complex  and the
interrelationship among systems becomes more critical, we believe our ability to
develop  and  implement  systems  with  high  quality  standards  will  become a
competitive advantage.

           INTEGRATION OF SOLUTIONS.  Financial  institutions are no longer able
to run disparate  systems that do not communicate with each other. We are in the
process  of  integrating  our  solutions  so that  they are able to  communicate
effectively among themselves,  creating an advantage for financial  institutions
that  purchase  a suite of  solutions  rather  than  just one  application.  For
example, the branch automation and Internet banking solutions

                                       7

<PAGE>

contain  modules  that will  collect  the data  needed for our loan  origination
software to enable it to produce  required  loan  documents in  compliance  with
applicable  laws and  regulations.  Each of our solutions for loan  origination,
teller,  new account  opening,  and  Internet  banking  rely on the same general
system setup, enabling customers to add new solutions quickly once they have set
up any of our key software applications.

           Our  acquisition  strategy  has not  been  focused  on a  traditional
"roll-up" of competing  solutions.  Instead, we have sought the best solution we
can develop or acquire for each aspect of our target markets, and then proceeded
to  integrate  that  solution  with  the  other  software  already  acquired  or
developed.  We believe this approach to integration  best satisfies our market's
need.  Further,  we believe  this  approach  enhances  our ability to cross sell
additional products into our customer base.

           INTEGRATION  OF  CONCENTREX.  We  do  not  operate  as  a  series  of
independent  business units, but as an integrated  company. We believe this is a
critical factor in order to enable us to integrate  products,  and to present an
integrated image and reality to our customers. Because we believe that financial
institutions are looking for a smaller number of key vendors, we feel that it is
critical not to have competing  business  units,  but rather to focus efforts on
integration of solutions for and at our various customers.  Further, this allows
us to leverage our various corporate functions,  technology research,  sales and
marketing efforts.

           LEGAL AND INDUSTRY KNOWLEDGE. We are focused on a very large vertical
market:  software solutions for the financial  services industry.  To serve that
market,  we have developed an extensive base of knowledge about the industry and
the forces that shape it. This  includes  knowledge  of the key  functions  that
software must perform,  such as teller transactions,  and key areas of extensive
regulation, such as loan origination.  Further, through our 1999 acquisitions of
MCS and  ULTRADATA,  we now have  expertise  in the back  office  core  ("host")
processing   world  of  information   management,   giving  us  a  comprehensive
understanding  of the various  technology needs of a financial  institution.  We
believe that this knowledge  base,  especially in the regulatory  area, is a key
competitive advantage over companies that focus solely on the technology aspects
of financial institutions.

           CUSTOMER  SUPPORT  AND  IMPLEMENTATION.  The  license  or sale of our
products   includes   customer   support   services  and,  in  many   instances,
implementation or customization  services.  This creates an ongoing relationship
with the customer,  including  updates and  enhancements  of the software.  This
enables us to achieve a recurring  revenue  stream in  addition to our  revenues
from initial sales.  Further,  the nature of both core processing and e-commerce
solutions  requires an even tighter  relationship  with  customers,  and we have
entered these markets in part to improve that relationship. This is particularly
true as we establish and implement ASP models for those services.  Finally,  the
most  critical  aspect  of our  ability  to make  new  sales is the  quality  of
references from existing  customers.  We believe our growth in both revenues and
absolute numbers of customers,  to over 5,000 banks, thrifts, and credit unions,
reflects a high level of customer satisfaction. We intend to continue to monitor
and improve our customers' satisfaction.

           STRENGTH OF THE SALES FORCE. Unlike many of our competitors,  we sell
nearly all our products directly rather than through third party sales channels.
We have invested  significantly in the creation of our direct sales force, which
is  organized  so that field sales  personnel  cover major  accounts and general
accounts and telephone sales personnel cover smaller customers. Further, we have
created telephone sales groups and marketing programs to support our field sales
force.  We believe  that the  strength of our sales  force  enables us to create
direct  relationships with customers,  and insulates us from shifting priorities
of third  party  distributors.  Further,  since  third  party  distributors  may
represent  other  products  that  compete  with us, use of a direct  sales force
enables us to increase our success at cross-selling  additional  products to our
existing customers.

           ADHERENCE TO CONCENTREX  VALUES. We have adopted and enforce a values
statement that we use to help manage and unify our various offices and operating
units.  Further, we recognize that our markets are fiercely  competitive and not
all of our competitors  share our positive values.  We believe that adherence to
our  values  including   honesty  and  integrity,   care  and  concern  for  all
stakeholders, winning, continuous improvement, and embracing change - enables us
to maintain and enhance our relationships with our customers and partners.

                                       8

<PAGE>

PRODUCTS

           SOFTWARE  PRODUCTS AND SERVICES:  CORE  PROCESSING.  Core  processing
solutions  provide  the  institution-wide  "host"  processing  that a  financial
institution requires to operate. They include functions such as loan accounting,
account processing,  general ledger and data retrieval of customer  information.
The systems connect to other software  applications  such as e-commerce and loan
origination.  Beginning in January 1999 with our  acquisition of MCS, we started
offering hardware and software solutions for the back office accounting needs of
community banks and credit unions.  The MCS system runs on Intel-based  personal
computers  ("PCs") using SCO UNIX,  which means that the core system for a small
bank can operate on a standard PC. We have  connected the MCS system to our loan
and branch automation  software,  and offer it as a low-cost,  in-house solution
for  smaller  community  banks.  The MCS system also  connects  to our  Internet
banking service bureau.

           In August 1999 we acquired  ULTRADATA  which provides over 400 credit
unions with  real-time,  scaleable core processing and a full range of ancillary
services.  The ULTRADATA  system  operates on either HP 9000 or IBM RS/6000 UNIX
operating systems,  and is being ported to Windows NT. We believe this system is
also capable of providing  scaleable,  real-time  host  processing for community
banks,  and we have a project  underway to augment  the system for the  features
that are used by a community  bank but not by a credit  union,  primarily  small
business lending.  We believe the market favors our core processing services for
both credit  unions and community  banks,  especially as credit unions enter the
market for small business loans.  Further,  we believe this market both supports
the  other  software  products  and  services  we  offer  and  provides  greater
predictability  of revenues.  In turn, this greater  predictability  of revenues
should provide greater predictability of earnings.

           SOFTWARE  PRODUCTS  AND  SERVICES:   LENDING  PRODUCTS.  Our  lending
products  automate  processes  at nearly  every step in the lending  process for
consumer,  commercial,  and  residential  real estate lending lines of business.
General  business  functions  automated  by our lending  solutions  include loan
application  and  analysis,  loan  closing,   portfolio  analysis  and  workflow
management,  and risk management.  We also offer  connectivity for interfaces to
credit scoring and reporting  systems and remote printing of loan documents.  We
design  our  lending  products  to  operate  with  common  user  interfaces  and
databases.

           SOFTWARE  PRODUCTS  AND  SERVICES:  MORTGAGE  PRODUCTS.  Our mortgage
products  improve the consistency of the loan process,  speed  origination,  and
increase  capacity  for their  users.  Among  their  functions,  these  products
automate the complex analyses  necessary for ensuring optimal mortgage loan pool
sales, speed the process of preparing mortgage loans for sale faster than manual
methods,  and allow  lenders  to take  advantage  of higher  near term  delivery
prices.

           SOFTWARE  PRODUCTS AND  SERVICES:  SALES AND  SERVICE.  Our sales and
service  products  automate the customer  service,  sales,  and account  opening
functions for the branch  platform,  teller  station and telephone  call center.
These  products  provide  a common  view of the  entire  customer  relationship,
enabling service personnel to leverage selling opportunities.

           E-COMMERCE SOLUTIONS

         We offer  Internet  banking to provide a full range of account  inquiry
and  maintenance  capabilities,  which are integrated  with many of our software
products for functions such as lending and account opening. Integration includes
product  descriptions and set-up  functions.  Our Internet banking products will
provide dozens of functions,  including account balance,  account history,  bill
payment,  and online loan  applications.  We have also created a service  bureau
that provides  financial  institutions with an inexpensive  method of initiating
home banking  services with their  customers.  This is  accomplished by allowing
these  customers  to  interface  with  their  financial  institution  through  a
Concentrex maintained and monitored web site. We plan to expand the capabilities
of our home banking  solution for both our in-house and service bureau customers
with added functionality and access to financial portals.

         A critical part of our e-commerce group is the Concentrex Intelliportal
Network,  a  business-to-business  portal  that will enable us to connect to our
over 5,000 customers.  Initially, the Network will focus on customer support and
compliance information, which is critical to our customers. We believe that will
encourage customers

                                       9

<PAGE>

to  participate in the Network,  since these  services will be free.  During the
second half of 2000,  we plan to add products and  services  such as  insurance,
leasing, and Internet-based  training, on a series of "pay" channels. These will
assist our customers with key functions such as training, and also allow smaller
institutions  to offer  products and services that may be too expensive for them
to offer on their own. In this respect,  Concentrex will act as a "concentrator"
or "aggregator" of services for our community bank and credit union customers.

PRODUCTS BY PRODUCT GROUP

SOFTWARE PRODUCTS AND SERVICES GROUP

<TABLE>
<CAPTION>

         CORE PROCESSING

PRODUCT                           DESCRIPTION                                        BENEFITS TO CUSTOMER
<S>                               <C>                                                <C>
Concentrex Host                   Real time enterprise wide software system for      Provides easy access to
Processing Engine for             credit union transaction processing, accounting,   information and enhances
Credit Unions                     administration, database management and            customer service, cross-
                                  information access                                 selling, transaction efficiency
                                                                                     and accounting controls

Concentrex Host                   PC Based--Back office core ("host") processing     Automates back room
Processing                        software for community banks and credit unions     accounting and servicing
                                  including applications available for bulk          functions
                                  account storage, voice response and account
                                  inquiry

</TABLE>

<TABLE>
<CAPTION>

         LENDING PRODUCTS

PRODUCT                           DESCRIPTION                                        BENEFITS TO CUSTOMER
<S>                               <C>                                                <C>
Concentrex Laser Pro              Integrated, modular loan processing systems        Standardizes lending policies
Lending                           for consumer, commercial, SBA, real estate         and products, streamlines
                                  home equity and agricultural loans, including a    processing, incorporates a
                                  module for geocoding to assist in analyzing        national database of
                                  fair lending and CRA compliance                    regulations

Concentrex Application            Processes applications for indirect consumer       Speeds the loan application
Manager - Consumer                lending                                            and approval process for
                                                                                     indirect lenders

</TABLE>

<TABLE>
<CAPTION>

         MORTGAGE PRODUCTS

PRODUCT                           DESCRIPTION                                       BENEFITS TO CUSTOMER
<S>                               <C>                                               <C>
Concentrex Mortgage               Provides mortgage origination, processing and     Improves consistency of loan
                                  servicing capabilities                            processes, speeds origination,
                                                                                    increases capacity

</TABLE>

                                       10

<PAGE>

<TABLE>
<CAPTION>

PRODUCT                           DESCRIPTION                                       BENEFITS TO CUSTOMER
<S>                               <C>                                               <C>
Concentrex Secondary              Comprehensive risk and pipeline management        Automates complex analyses
Marketing                         system that automates secondary mortgage          necessary for ensuring optimal
                                  marketing functions from registration through     mortgage loan pool sales
                                  delivery of loans

Concentrex Mortgage Document      Automates the labor intensive functions           Speeds process of preparing
Tracking                          performed after a mortgage loan is closed         mortgage loans for sale faster
                                                                                    than manual methods, allowing
                                                                                    lenders to take advantage of
                                                                                    higher near term delivery
                                                                                    prices

</TABLE>

<TABLE>
<CAPTION>

         RETAIL DELIVERY PRODUCTS

PRODUCT                           DESCRIPTION                                       BENEFITS TO CUSTOMER
<S>                               <C>                                               <C>
Concentrex Teller                 Automates the teller station by providing         Improves productivity and
                                  comprehensive transaction automation,             facilitates sales referrals
                                  electronic journaling, store-and-forward
                                  capabilities, simplified balancing, and access
                                  to the customer database

Concentrex Sales & Service        Provides sales and service capabilities,          Opens accounts, enables
Version 5                         including account opening screens,                cross-selling and customer
                                  customer/product matching, customer contact       information requests
                                  histories, letter and fulfillment generation,
                                  and institution and product information

Concentrex Sales and Service      Integrates in a common and consistent format      Enables cross-selling and
Version 5 Call Center             customer, product and internal procedure          improves service
                                  information

Concentrex Sales and Service      Windows-based system that graphically links       Allows customized arrangements
Version 1                         each user to Concentrex software and other        of modules and access to
                                  business applications                             customer information

Cocentrex Account                 Automates and ensures regulatory compliance       Speeds account opening,
Opening                           in the account opening and cross-selling          ensures compliance with
                                  processes for checking, savings, certificates     regulations, improves the
                                  of deposit, and IRA accounts                      consistency of new account
                                                                                    policies and procedures

</TABLE>

                                       11

<PAGE>

<TABLE>
<CAPTION>

E-COMMERCE GROUP

PRODUCT                           DESCRIPTION                                       BENEFITS TO CUSTOMER
<S>                               <C>                                               <C>
Concentrex Online Banking         System that allows institutions to provide        Provides Internet access,
Suite                             personal consumer and small business Internet     strengthens customer
                                  banking with in house or service bureau options   relationships, extends
                                                                                    institution branding,
                                                                                    increases customer convenience

Concentrex Online Payment         On-line bill payment system                       Internet bill payment
Services                                                                            capability

Concentrex Intelliportal          The intelligent portal to Internet based          Provides cost effective access
Network                           products and services for financial institutions  to and one stop resource for
                                                                                    new financial service products

Concentrex Service Bureau         Houses and maintains the dedicated technology     Significantly reduces the
                                  for online banking websites                       hardware and staff
                                                                                    requirements banks need to
                                                                                    have an internet presence

</TABLE>

PRODUCT DEVELOPMENT AND NEW PRODUCTS

           We ensure that our products meet customer  requirements by conducting
primary research,  tracking customer calls and requests for enhancements,  doing
competitive  analysis,  working with industry trade groups,  and holding product
user and focus group meetings.  We also incorporate knowledge learned during the
sales and installation process into development of new and enhanced products and
processes.

           We  continue  to  invest  significantly  in our  product  development
efforts.  During the past four years we have  focused a  considerable  amount of
that investment on converting our products from the DOS environment to Windows .
That effort is now  complete,  and  essentially  all of our  products  have been
either  rewritten  or  significantly   enhanced.   We  are  in  the  process  of
"sunsetting"  the DOS versions of our products,  and plan to have  substantially
completed  that task by the end of 2000.  At that time we will  support only the
Windows  version,   or  other  newer  versions,   of  our  products,   including
browser-based  products.  Our redevelopment  effort also has included  increased
focus  on the  use of  software  components  that  can be  re-used  in  multiple
products,  such as calculation modules and credit bureau communication  modules.
We  intend  to  continue  enhancement  of our  products  in terms of both  added
features and increased use of components,  which will help us remain competitive
and will enhance our goal of product integration. We also have begun investments
in service  centers  for  customers  who do not have the desire or  capacity  to
install the solutions in-house.

           We have made significant  investments in e-commerce technology,  both
in terms of internal  development  and the 1999  purchase of MECA.  We also have
focused on Web-enabling our existing product lines, such as loan origination and
new account  opening  software,  and will continue to invest in technology  that
enables our suite of solutions to work with and on the Internet.

           We  believe  that  market  acceptance  of our  products  is  based in
significant  part on the  ability of the  products to share  information  with a
financial  institution's  host  processor  system or with the  vendor  providing
processing  services to the institution.  This is particularly true for software
applications  that  require  information  from the host or that need to  provide
information  to the host,  including  loan  origination,  new  account  opening,
account servicing,  and home banking.  We have developed  significant  expertise
with most available host processor systems and the methods necessary to transfer
data to and from such systems. However, many of the companies

                                       12

<PAGE>

that provide host  software are  unwilling to allow  connections  with  software
other than the solution  developed or selected by the host. We have been able to
overcome this in many instances  through our market presence and pressure on the
host system's vendor from individual customers.  We also believe that the market
trend is toward open systems,  and we have initiated  efforts to focus attention
on that issue,  including  positioning  our own information  management  product
offerings as an open system alternative.

SERVICE AND SUPPORT

           Substantially   all  of  our  customers   subscribe  to   maintenance
agreements under which we provide periodic product updates  reflecting  evolving
regulations,  product enhancements and toll-free telephone support.  Maintenance
fees  consist of  per-item  or  per-user  charges or are  calculated  based on a
percentage of the current product list price or of the size of the customer.

           We provide training to our customers, and account for this revenue as
service and support fees. Service and support fees have grown significantly over
the last three years. For the year ended December 31, 1999, such fees were $48.3
million,  or 45.1% of our total revenue.  We anticipate  that our e-commerce and
information  management  product  offerings will increase that  percentage  over
time.

           We  install,  implement  and  customize  our  software  solutions  at
customer sites,  particularly at larger institutions,  and at the time we sell a
host system for information management.  As our sales to larger institutions and
our sales of core processing  solutions  increase,  we anticipate demand for our
customization services to increase. Revenue from these services is accounted for
as software license fees using the percentage of completion method.

CUSTOMERS

           We have  licensed  our  software  products  to over  5,000  financial
institutions in the United States. Our target customer base includes  commercial
banks,  thrifts and credit unions. No customer  accounted for 10% or more of our
total revenues in 1999, 1998 or 1997.

           Our largest  accounts  include Bank of America,  Union Planters Bank,
NCR Corporation,  Banc One, PNC Bank,  Citicorp  Mortgage,  and Central Carolina
Bank & Trust.

SALES AND MARKETING

           We sell our products  through  national direct sales teams. The major
accounts  sales team is devoted  exclusively  to the largest  approximately  200
financial  institutions in the United States. A second team focuses on all other
accounts with respect to software  sales. A third  national team  specializes in
selling core processing  products. A fourth team focuses on e-commerce products.
A fifth team consists of  telemarketing  personnel who contact  institutions for
lead generation and qualification, and who sell add-on modules and products. All
sales  teams are  supported  by  product  specialists.  Our  marketing  group is
responsible for direct sales campaigns, trade media support and advertisements.

           We have a number of third-party reseller and co-marketing  alliances,
including  agreements  with some of the largest  host  processors  and  hardware
vendors.  For  example,  co-marketing  alliances  with both IBM and NCR  provide
access to institutions,  or departments within large institutions,  with whom we
may otherwise have no relationship.  We also have endorsement relationships with
some  associations that serve the financial  institutions,  which assist us with
marketing and promotion of our products. We have also been a leader in promoting
an  open  systems   environment   throughout  the  industry  serving   financial
institutions.  As part of our commitment,  these partnerships are supported by a
team of sales and account relationship managers.

                                       13

<PAGE>

LEGAL NETWORK

           We maintain a network of independent  legal counsel in all 50 states,
Puerto Rico,  Guam, and the District of Columbia.  This network,  as well as our
internal  legal staff,  keeps us informed of changes in state and federal  laws,
changes in state and local documentation  requirements,  pending legislation and
court  actions  affecting  financial  institution  practices,  as well as  other
information  required to maintain  regulatory  compliance.  We believe  that the
quality of this  information,  our ability to effectively  manage the continuous
information  flow provided by the network  participants,  and our  capability to
integrate  this  information  into  our  software  products  provide  us  with a
significant competitive advantage.

           We use legal  counsel in all  jurisdictions,  other  than  Louisiana,
under  agreements  that are  terminable at will by either party and that provide
for compensation based on an hourly rate. We have entered into a long-term legal
services  agreement  with a Louisiana  law firm pursuant to which it earns legal
fees based upon sales of our products in Louisiana.

ACQUISITIONS

           To  remain  competitive  and  to  meet  the  changing  needs  of  our
customers, we pursue acquisitions of products,  technologies and businesses as a
part of our growth strategy.  We continuously  evaluate  acquisition  candidates
that provide opportunities to expand our customer base, cross-sell products, and
broaden  our  product   offerings   with  proven   solutions  in  a  timely  and
cost-effective  manner. Since 1994 we have made 15 acquisitions and believe that
to date we have  achieved our  objectives of growth and  broadening  our product
offerings through this acquisition  program. We intend to continue such activity
in the future,  although we do not anticipate material  acquisitions in the near
term as we complete the integration of our 1999 acquisitions.

EMPLOYEES

           As of December 31, 1999, we had 1,023  full-time  employees.  Of this
number, 280 were engaged in product groups (primarily product development),  293
in  customer  service  and  support,   106  in  sales  and  marketing,   161  in
implementation and training,  21 in technology,  research ad development and 162
in general and administrative functions.

ITEM 2.  PROPERTIES

           Our  corporate  headquarters  are  located in  Portland,  Oregon in a
leased facility consisting of approximately 86,921 feet of office space occupied
under  leases that  expire in 2004.  Annual  lease  payments  for our  corporate
headquarters are  approximately  $1.6 million,  with provisions for inflationary
increases. We also lease office space in Atlanta, Georgia (32,277 square feet) ;
Dayton, Ohio (15,151 square feet);  Burnsville,  Minnesota (18,392 square feet);
Englewood Cliffs, New Jersey (14,198 square feet); Houston,  Texas (7,565 square
feet); Denver, Colorado (4,470 square feet);  Charleston,  South Carolina (2,500
square feet);  Vienna,  Virginia  (5,666 square  feet);  Pleasanton,  California
(60,242  square  feet);  Jericho,  New  York  (1,140  square  feet);   Trumbull,
Connecticut  (92,000  square feet);  and  Carrolton,  Texas (4,800 square feet).
These leases expire in 2007,  2006,  2000,  2005,  2002, 2004, 2003, 2003, 2007,
2002, 2003 and 2001,  respectively.  Annual lease payments for these  additional
facilities,  in aggregate, are approximately $3.3 million. We believe the office
space currently under lease is adequate to meet our needs for the next year.

ITEM 3.  LEGAL PROCEEDINGS

           We are involved in routine legal matters  incidental to our business.
We  believe  that  the  resolution  of  any  such  matters  that  are  currently
outstanding  will not have a  material  effect  on our  financial  condition  or
results of operation.  However,  no assurance  can be given that the  concurrent
resolution of several of such matters in manners  adverse to us would not have a
material adverse effect on our financial condition or results of operations.

                                       14

<PAGE>

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

           The Company did not submit any matters to a vote of security  holders
during the quarter ended December 31, 1999.

                                     PART II

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

           Our common stock trades  publicly on the Nasdaq National Market under
the  trading  symbol  CCTX.  The table  below  sets forth the high and low sales
prices for our common stock for the periods  indicated as reported by the Nasdaq
National Market.

                                                  HIGH          LOW

                1998

                    First Quarter               $16.69        $12.25
                    Second Quarter              $17.88        $14.50
                    Third Quarter               $16.38        $ 9.38
                    Fourth Quarter              $13.13        $10.00

                1999

                    First Quarter               $14.00        $10.50
                    Second Quarter              $18.00        $ 8.88
                    Third Quarter               $13.75        $ 9.63
                    Fourth Quarter              $10.38        $ 5.25

           On February 29, 2000,  the last reported  sales price reported on the
Nasdaq  National  Market for our common  stock was $8.00 per share.  On the same
date,  the  number of  shareholders  of  record  and the  approximate  number of
beneficial   holders  of  the  Company's   Common  Stock  were  276  and  1,803,
respectively.

           In May 1999 we issued  90,000 shares of our common stock in an equity
sale to a private  investor for $900,000.  In August 1999 we issued  warrants to
purchase  381,822 shares of our common stock at $12.34 per share and convertible
notes convertible into 602,534 shares of our common stock at $12.34 per share to
seven of our lenders in  connection  with lending  commitments  totalling  $85.5
million. See Note 6 of Notes to Consolidated  Financial Statements.  On December
31,  1999  certain  terms of the  warrants,  convertible  notes  and  associated
financing agreement were renegotiated and the exercise price of the warrants and
the conversion price of the convertible notes were reduced from $12.34 to $10.00
per share. At maturity,  the convertible notes would be convertible into 743,753
shares of common stock.

           Also in August 1999, we issued a warrant to purchase 58,000 shares of
our  common  stock at  $12.34  per  share  in  consideration  for the  recipient
providing financial advisory and placement agent services in connection with the
above financing.  On December 31, 1999, as a result of the  renegotiation of the
financing arrangement, the exercise price of this warrant was adjusted to $10.00
per  share  consistent  with the  adjustments  made to the  other  warrants  and
convertible  notes  issued in  connection  with the  financing.  The issuance of
shares,  warrants and convertible notes described above were made in reliance on
Section  4 (2) of the  Securities  Act of 1933,  as  amended.  We made no public
solicitation  in connection  with the issuance of the above  securities nor were
there any other offerees.  We relied on  representations  from the recipients of
the  securities  that they purchased the securities for investment for their own
account  and  not  with a view  to,  or  for  resale  in  connection  with,  any
distribution  thereof  and that  they were  aware of our  business  affairs  and
financial  condition  and had  sufficient  information  to reach an informed and
knowledgeable decision regarding their acquisition of the securities.

           There were no cash dividends  declared or paid on our common stock in
1999 or 1998. We do not anticipate  declaring cash dividends on our common stock
in the  foreseeable  future.  The  terms  of our  lending  agreements  generally
prohibit the payment of dividends on our common stock.

                                       15

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

IN THOUSANDS:
EXCEPT PER SHARE AMOUNTS                    1999(1)          1998(2)             1997           1996(3)        1995(4)
---------------------------------------    -----------     -------------     --------------    -----------    -----------
CONSOLIDATED STATEMENT OF OPERATIONS
DATA REVENUE(5):
<S>                                     <C>             <C>               <C>               <C>            <C>
   Software Products and Services
   Group

     License Revenue                    $      48,730   $        47,590   $         38,281  $      31,133  $      17,277
     Service and Support Revenue               38,284            28,077             26,235         21,804         14,965
       Other                                    8,295             4,141              3,143          2,899          2,665
   e-Commerce Group
     License Revenue                            1,786             1,612              2,193          2,802          1,641
     Service and Support Revenue                9,986             4,210              2,797          1,311            228
                                           -----------     -------------     --------------    -----------    -----------
               Total revenue                  107,081            85,630             72,649         59,947         36,776
Cost of revenue                                42,625            29,423             27,041         20,844         11,672
                                           -----------     -------------     --------------    -----------    -----------
Gross profit                                   64,456            56,207             45,608         39,103         25,104
Operating expenses                             64,436            45,357             36,780         29,810         20,552
Acquired in-process research and
   development and other charges               10,208             2,661                 --          8,030          4,549
                                           ===========     =============     ==============    ===========    ===========
Income (loss) from operations           $     (10,188)  $         8,189   $          8,828  $       1,263  $           3
                                           ===========     =============     ==============    ===========    ===========

Net income (loss)                       $     (13,831)  $         3,960   $          4,680  $         114  $         323
Preferred Stock dividend                           93                95                 95             97             97
                                           -----------     -------------     --------------    -----------    -----------
Net income (loss) applicable to
   common shareholders                  $     (13,924)  $         3,865   $          4,585  $          17  $         226
                                           ===========     =============     ==============    ===========    ===========
Diluted net income (loss) per share     $       (2.71)  $          0.75   $           0.90  $          --  $        0.05
                                           ===========     =============     ==============    ===========    ===========
Shares used in diluted per share
   calculations                                 5,132             5,167              5,124          5,112          4,877

Basic net income (loss) per share       $       (2.71)  $          0.77   $           0.93  $          --  $        0.05
                                           ===========     =============     ==============    ===========    ===========
Shares used in basic per share
   calculations                                 5,132             5,012              4,919          4,763          4,369

CONSOLIDATED BALANCE SHEET DATA

Cash and cash equivalents               $       1,289   $         3,589   $             20  $          --  $       4,844
Working capital (deficit)                      (3,586)           16,972              7,187          2,792          8,759
Property and equipment, net                     7,532             4,534              5,211          4,805          2,968
Total assets                                  144,766            56,781             57,542         46,845         36,587
Short-term debt                                 8,052               261              5,605          2,896          3,915
Long-term debt, less current portion
   and debt discount                           59,036             5,693              2,232          2,810            423
Convertible Subordinated Notes                  5,647                --                 --             --             --
Mandatory Redeemable Class A
   Preferred Stock                                728               738                746            754            761
Shareholders' equity                    $      22,722   $        30,632   $         25,943  $      20,238  $      18,169

<FN>

(1)  Results  for the year  ended  December  31,  1999  include  pretax  charges
     totaling $10.2 million for the value of in-process research and development
     efforts at the date of acquisition pertaining to the acquisition of MECA in
     May  1999  ($3.8  million),  for  the  value  of  in-process  research  and
     development   efforts  at  the  date  of  acquisition   pertaining  to  the
     acquisition of ULTRADATA in August 1999 ($5.2 million),  other expenses for
     name  change and  certain  costs  related to  acquisitions  required

                                       16

<PAGE>

     to be expensed ($0.3  million) and settlement of an arbitration  proceeding
     ($0.9  million).  Excluding the impact of these  charges,  net loss and net
     loss  per  share   (diluted)  would  have  been  $5.7  million  and  $1.11,
     respectively.  The results of  operations  for the year ended  December 31,
     1999  include the results of  operations  of MECA and  ULTRADATA  since the
     dates of their acquisitions in May and August 1999,  respectively.  To fund
     these acquisitions,  the Company incurred debt and convertible subordinated
     notes of  approximately  $74  million.  See Notes 1, 2, 6 and 7 of Notes to
     Consolidated Financial Statements.

(2)  Results  for the year  ended  December  31,  1998  include  pretax  charges
     totaling $3.0 million for the value of in-process  research and development
     efforts at the date of  acquisition  pertaining to the  acquisition  of the
     assets of Mortgage  Dynamics,  Inc.  in October  1998 ($1.0  million),  the
     remaining  goodwill and associated  severance charges related to the fisCAL
     products ($0.9 million), the present value of net future lease payments due
     with respect to certain  office  space in Atlanta  that the Company  ceased
     using ($0.8 million),  and the initial investment of the Company in a joint
     venture ($0.3 million).  Excluding the impact of these charges,  net income
     and net income per share  (diluted) would have been $5.7 million and $1.11,
     respectively.  See  Notes  1, 2 and 7 of Notes  to  Consolidated  Financial
     Statements.

(3)  Results for the year ended  December  31, 1996  include a pretax  charge of
     $8.0 million for the value of in-process  research and development  efforts
     at the date of acquisition  pertaining to five companies  acquired in April
     1996.  Excluding  the  impact  of  the  acquired  in-process  research  and
     development  charges,  net income and net income per share  (diluted) would
     have been $5.2 million and $1.02,  respectively.  The results of operations
     for the  year  ended  December  31,  1996  include  the  results  of  these
     companies' operations since the date of acquisition in April 1996.

(4)  Results for the year ended  December  31, 1995  include a pretax  charge of
     $4.5 million. The charge consists of $3.7 million for the value of Culverin
     Corporation's (Culverin) in-process research and development efforts at the
     date of  acquisition  and $0.8  million for  restructuring.  Excluding  the
     impact  of  the   acquired   in-process   research  and   development   and
     restructuring  charges, net income and net income per share (diluted) would
     have been $3.1 million and $0.64, respectively. The year ended December 31,
     1995  statement  of income  includes the results of  Culverin's  operations
     since the date of acquisition in November 1995.

(5)  During the year ended  December 31, 1999, we  reorganized  into two product
     groups:  the Software Products and Services group and the e-Commerce group.
     Accordingly,  we have  reclassified  our  operating  revenue data for these
     periods to reflect the new groups. Total revenue did not change as a result
     of this reclassification.

</FN>

</TABLE>

                                       17

<PAGE>

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

THE  CONSOLIDATED  FINANCIAL  STATEMENTS  AND  NOTES  THERETO  SHOULD BE READ IN
CONJUNCTION  WITH THE FOLLOWING  DISCUSSION.  THIS  DISCUSSION AND CERTAIN OTHER
PARTS OF THIS REPORT CONTAIN  FORWARD-LOOKING  STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES,   SUCH  AS  STATEMENTS   OF   CONCENTREX'S   PLANS,   OBJECTIVES,
EXPECTATIONS AND INTENTIONS.  THE CAUTIONARY  STATEMENTS MADE IN THIS DISCUSSION
SHOULD BE READ AS BEING  APPLICABLE  TO ALL RELATED  FORWARD-LOOKING  STATEMENTS
WHEREVER THEY APPEAR IN THIS REPORT.  CONCENTREX'S  ACTUAL  RESULTS COULD DIFFER
MATERIALLY FROM THOSE DISCUSSED HERE.  FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE QUARTERLY  FLUCTUATIONS IN ORDERS RECEIVED,  CHANGES IN
THE FINANCIAL INSTITUTIONS  MARKETPLACE AND TECHNOLOGICAL  ADVANCES,  CHANGES IN
RELATIONSHIPS  WITH KEY  CUSTOMERS AND PARTNERS,  NEED FOR  ADDITIONAL  CAPITAL,
MANAGEMENT OF GROWTH, SOFTWARE ERRORS AND ADDITIONAL FACTORS DISCUSSED ELSEWHERE
IN THIS REPORT,  AS WELL AS IN THE COMPANY'S  OTHER FILINGS WITH THE  SECURITIES
AND EXCHANGE COMMISSION.

OVERVIEW

           CFI  ProServices,  Inc.  (doing  business as Concentrex  Incorporated
pending a change in the legal  name of the  company)  is a leading  provider  of
technology-powered  solutions to the financial services industry. During 1999 we
reorganized  ourselves  into two  product  groups:  the  Software  Products  and
Services group and the e-Commerce  group.  We offer a broad range of traditional
software  products and  services,  a product  group that we are both growing and
using to finance our innovative  business-to-business  e-commerce solutions. Our
Software Products and Services group supports a financial  institution's mission
critical functions  including back office "core"  processing,  loan origination,
new account  opening,  branch  automation and cross selling.  We support the key
sales functions a financial  institution  traditionally relies on to make money,
which are usually delivered face-to-face or over the telephone.  We believe that
financial  institutions  will  need to  offer  those  same  functions  over  the
Internet.  Thus, we have focused our efforts on both Internet  banking  software
for account servicing and Internet-enabled  versions of our traditional software
for lending and account  opening.  These integrate with other points of customer
contact  and enable a  financial  institution  to serve its  customers,  both in
person and over the Internet, with consistent, integrated solutions.

           Our cost structure is relatively  fixed within a short time frame and
the cost of generating revenue,  in aggregate,  does not vary significantly with
changes in revenue.  As a result, we typically  generate  significantly  greater
profit margins from incremental sales once fixed costs are covered. In addition,
any failure to achieve  revenue  targets in a particular  period would adversely
affect our profit margins for that period.

           Our backlog as of December  31, 1999 was $15.5  million,  compared to
$18.3 million and $15.2 million at December 31, 1998 and 1997, respectively. The
decline in backlog from 1998 to 1999  resulted  primarily  from the decisions of
our customers to delay purchases in the months prior to December 31, 1999 due to
their  concerns about the Year 2000 issue.  Our backlog  consists of firm signed
orders taken and not yet  converted to revenue,  but expected to be converted to
revenue within the next 12 months.  Orders  constituting our backlog are subject
to  changes  in  delivery  schedules  or to  cancellation  at the  option of the
purchaser  without  significant  penalty.  The stated backlog is not necessarily
indicative of our revenue for any future period.

ACQUISITIONS AND NEW BUSINESS VENTURES

           We  have  expanded  our  market   presence  by  acquiring   products,
technologies  and companies  that  complement  our product suite or increase our
market share.  We have completed 15  acquisitions  since 1994. We completed four
acquisitions in 1999 consisting of: Modern Computer  Systems (MCS) as of January
1, 1999, MECA Software,  L.L.C. (MECA) as of May 17, 1999, ULTRADATA Corporation
(ULTRADATA)  as of August 13, 1999 and certain  assets of Total Direct  Services
LLC (TDS) as of September 27, 1999. All four  acquisitions were accounted for as
purchases and have been reflected in the results of operations  presented  since
their respective acquisition dates.

           The terms of  certain  of our  acquisitions  provide  that,  based on
various factors,  including the passage of time or certain product  revenue,  we
will be required to pay contingent  royalties.  Because  amortization of certain
intangible

                                       18

<PAGE>

assets  (primarily  goodwill)  arising  from  our  acquisition  activity  is not
deductible for federal income tax purposes, certain amortization expense has the
effect of increasing our effective tax rate for financial reporting purposes.

           We currently have no  understandings,  commitments or agreements with
respect  to  any  material   acquisition  of  other   businesses,   products  or
technologies. Additionally, our covenants with our lenders may limit our ability
to engage in acquisitions in the near term. Nevertheless,  from time to time, we
may evaluate  establishing new business  operations or making investments in new
business ventures, including joint ventures.

RESULTS OF OPERATIONS

         The  following  table  sets forth our  statements  of  operations  data
expressed as a percentage of total revenue for the past three years.

<TABLE>
<CAPTION>

                                                                                 Year Ended December 31,
                                                                --------------------------------------------------------
                                                                     1999                  1998                1997
                                                                ----------------       --------------        -----------
<S>                                                             <C>                    <C>                    <C>
          Revenue

          Software Products and Services Group
                   License Revenue                                        45.5  %              55.6  %            52.7  %
                   Service and Support Revenue                            35.8                 32.8               36.1
                        Other                                              7.7                  4.8                4.3
          e-Commerce Group
                   License Revenue                                         1.7                  1.9                3.0
                   Service and Support Revenue                             9.3                  4.9                3.9
                                                                ----------------       --------------        -----------
               Total revenue                                             100.0                100.0              100.0
          Gross profit                                                    60.2                 65.6               62.8
          Operating expenses
            Sales and marketing                                           17.4                 22.4               21.6
            Product development                                           22.9                 17.5               15.9
            General and administrative                                    17.5                 11.7               11.4
            Goodwill Amortization                                          2.4                  1.4                1.7
            Acquired in-process research and development
               and other charges                                           9.5                  3.1                 --
                                                                ----------------       --------------        -----------
               Total operating expenses                                   69.7                 56.1               50.6
                                                                ----------------       --------------        -----------
          INCOME (LOSS) FROM OPERATIONS                                   (9.5) (1)             9.5  (1)          12.2
          Non-operating expense                                           (4.2)                (0.9)              (0.4)
                                                                ----------------       --------------        -----------
          Income (loss) before income taxes                              (13.7)                 8.6               11.8
          Provision (benefit) for income taxes                            (0.8)                 4.0                5.4
          Preferred stock dividend                                         0.1                  0.1                0.1
                                                                ================       ==============        ===========
          Net income (loss) applicable to
               common shareholders                                       (13.0) %(1)            4.5  %(1)          6.3  %
                                                                ================       ==============        ===========
<FN>

(1)  Excluding the impact of acquired  in-process  research and  development and
     other  charges,  income from  operations as a percentage of revenue in 1999
     and 1998  would  have been 0.0% and  12.7%,  respectively,  and net  income
     (loss)  applicable to common  shareholders in 1999 and 1998 would have been
     (5.3)% and 6.8%, respectively.

</FN>

</TABLE>

REVENUE

           Total revenue increased $21.5 million, or 25.1%, to $107.1 million in
1999 from $85.6  million in 1998.  Total revenue  increased  $13.0  million,  or
17.9%, to $85.6 million in 1998 from $72.6 million in 1997.

           We have increased the  percentage of our service and support  revenue
in 1999.  We believe that service and support  revenue is more  predictable  and
recurring  than  is  software  license  revenue.  Service  and  support  revenue
accounted for 45.1%,  37.7% and 40.0% of total revenue,  respectively,  in 1999,
1998 and 1997.  License  revenue  accounted for 47.2%,  57.5% and 55.7% of total
revenue, respectively, in 1999, 1998 and 1997.

                                       19

<PAGE>

                                                    REVENUE BY GROUP
                                                     (IN $MILLIONS)
                                                --------------------------
                                                1999      1998       1997
                                                --------------------------
SOFTWARE PRODUCTS AND SERVICES GROUP

      License Revenue                            $48.7     $47.6      $38.3
      Service and Support Revenue                 38.3      28.1       26.2
      Other Revenue                                8.3       4.1        3.1
                                                ----------------------------
      Group Total                                 95.3      79.8       67.6

E-COMMERCE GROUP

      License Revenue                              1.8        1.6        2.2
      Service and Support Revenue                 10.0        4.2        2.8
                                                ----------------------------
      Group Total                                 11.8        5.8        5.0
                                                ----------------------------

TOTAL REVENUE                                   $107.1      $85.6      $72.6
                                                ======      =====      =====


           During 1999 we  reorganized  ourselves into two product  groups:  the
Software Products and Services group and the e-Commerce group.  Accordingly,  we
have  reclassified  our operating  revenue data for all periods included in this
report to reflect  the new groups.  Total  revenue did not change as a result of
this reclassification.

SOFTWARE PRODUCTS AND SERVICES GROUP

           The Software Products and Services group includes:

          o    the  traditional  lending,  branch  automation  and  connectivity
               software products and support services previously provided by CFI
               ProServices, Inc.

          o    the core ("host")  processing products we acquired from ULTRADATA
               in August 1999 and from MCS in January 1999

          o    preprinted  forms,  font cartridges and modems previously sold by
               us, license revenue from a personal financial management software
               product  that  we  acquired  from  MECA  in  May  1999,  and  the
               fulfillment  services  acquired from MECA.  All of these products
               are included in "Other" revenue within the Software  Products and
               Services group.

           Software   Products  and  Services  license  revenue  increased  $1.1
million,  or 2.4%,  to $48.7  million  in 1999 from $47.6  million in 1998.  The
increase was due to the acquisition of ULTRADATA and MCS in 1999, offset in part
by declines in revenue from lending and branch  automation  software.  We had no
core  processing  revenues  in 1998 or 1997.  The  decline  in  revenue  in 1999
compared  to 1998  in  lending  and  branch  automation  software  products  was
primarily  due to Year 2000  pressures  that  caused our  financial  institution
customers to postpone their decisions on new software  purchases and to delay or
defer implementation projects.

           Software   Products  and  Services  license  revenue  increased  $9.3
million,  or 24.3%,  to $47.6  million in 1998 from $38.3  million in 1997.  The
increase  was  led  by  our  Windows-based  Laser  Pro  Lending  suite  of  loan
origination  products,  new  mortgage  products,  connectivity  products and new
account opening products, and was offset in part by a

                                       20

<PAGE>

decline  in  branch  automation  revenue.  Branch  automation  revenue  for 1997
included results from our RPxpress!  remittance  processing division,  which was
sold in September 1997.

           Service and support  revenue in the  Software  Products  and Services
group  increased  $10.2 million,  or 36.4%,  to $38.3 million in 1999 from $28.1
million in 1998. The increase  resulted  primarily  from the ULTRADATA,  MCS and
MECA  acquisitions  in 1999 and from an  increase in the  installed  base of our
products.  Service and support revenue increased $1.8 million,  or 7.0%, in 1998
from $26.2 million in 1997 due primarily to an increase in the installed base of
our  products and to an increase,  effective in the fourth  quarter of 1998,  in
service and support  pricing for certain lending  products.  Service and support
revenue  consists  primarily of recurring  software  support charges and revenue
from  training  customers in the use of our products.  Substantially  all of our
software customers subscribe to support services,  which provide for the payment
of annual or quarterly maintenance fees.

           Other revenue in the Software  Products and Services group  increased
$4.2 million,  or 100%,  to $8.3 million in 1999 from $4.1 million in 1998.  The
increase  resulted  primarily from the MECA acquisition which added revenue from
its  legacy  personal  financial  management  product  and from its  fulfillment
operations.  We anticipate that revenue from the personal  financial  management
product will decline in future periods. Other revenue increased $1.0 million, or
31.8%, in 1998 from $3.1 million in 1997.

           No significant  price changes for software  products  occurred during
the periods presented.

E-COMMERCE GROUP

           The  e-Commerce  group  includes  the home  banking and bill  payment
products previously sold by CFI ProServices,  Inc. and the professional services
and  technical  support  services  acquired  from  MECA.  Total  revenue  in the
e-Commerce  segment increased $6.0 million,  or 102.2%, to $11.8 million in 1999
from $5.8 million in 1998,  and increased $0.8 million,  or 16.6%,  in 1998 from
$5.0 million in 1997. The 1999 increase was  principally  due to the acquisition
of MECA in May 1999.

           License revenue in the e-Commerce  group  increased $0.2 million,  or
10.8%,  to $1.8  million  in 1999 from $1.6  million  in 1998.  License  revenue
decreased $0.6 million,  or 26.5%,  to $1.6 million in 1998 from $2.2 million in
1997.

           Service and support  revenue in the e-Commerce  group  increased $5.8
million,  or 137.2%,  to $10.0  million in 1999 from $4.2  million in 1998.  The
increase  resulted  primarily from the acquisition of MECA's  technical  support
operations,  from an increase in end users of our online  banking  software  and
from increased online bill payment services revenue. Service and support revenue
increased $1.4 million,  or 50.5%,  to $4.2 million in 1998 from $2.8 million in
1997, due primarily to an increase in end users of our home banking software and
from increased on-line bill payment services revenue.

COST OF REVENUE

           Cost of revenue  primarily  consists of  amortization  of  internally
developed  and  purchased  software,   royalty  payments,   compliance  warranty
insurance  premiums,  software  production  costs,  costs  of  product  support,
training and implementation,  costs of software  customization,  materials costs
for forms and supplies, and bill payment processing costs.

           Cost of revenue  increased $13.2 million,  or 44.9%, to $42.6 million
in 1999 compared to 1998.  Cost of revenue  increased $2.4 million,  or 8.9%, to
$29.4  million in 1998  compared to 1997.  The  increase in 1999 is  principally
attributable to the acquisitions of ULTRADATA and MECA, to higher implementation
costs  associated  with  the  growing  number  of  large  financial  institution
projects,  to additional  personnel required to support the increased  installed
base of customers and to increased royalties and materials costs associated with
increased  revenues.  As the  breadth of our  product  lines has  expanded,  the
complexity and cost of providing high quality  customer  service and support has
increased.

                                       21

<PAGE>

           Software  amortization was $3.8 million in 1999, $2.6 million in 1998
and $4.5 million in 1997.  During 1998 and 1997,  several  software  development
projects reached  completion.  As a result, we began to amortize certain product
development  costs that had been capitalized in prior periods.  In addition,  we
recorded  amortization  as a result of  software  acquired  in  connection  with
acquisitions.  The increase in  amortization  costs in 1997 also  resulted  from
accelerated  amortization for certain products being replaced by new products or
which management concluded were no longer technologically viable.

           As a result of  acquisitions,  costs associated with royalty payments
will increase in future periods.  We are obligated to pay royalties ranging from
3%  to  18%  of  revenue  related  to  certain  products   acquired  in  various
acquisitions. In addition, we are obligated to pay MicroBilt Corporation a fixed
amount for each OnLine Branch  Automation  product customer that converts to our
branch automation  products.  The royalty obligations  generally extend three to
five years from the acquisition date.

           Gross  margin  was  60.2%,  65.6% and  62.8% in 1999,  1998 and 1997,
respectively.  The decrease in 1999 is primarily due to Year 2000 pressures that
caused our financial  institution  customers to postpone their  decisions on new
software  purchases  and to delay or defer  implementation  projects.  Since our
costs are  relatively  fixed in the  short-term,  this  postponement  of revenue
significantly  reduced gross margin in the second half of 1999.  The increase in
gross margin in 1998 is primarily  attributable  to lower software  amortization
than in 1997 and from improved implementation efficiencies.

OPERATING EXPENSES

           SALES AND MARKETING.  Sales and marketing expenses decreased to $18.7
million, or 17.4% of revenue in 1999 from $19.2 million, or 22.4% of revenue, in
1998 and  increased  from  $15.7  million,  or 21.6% of  revenue,  in 1997.  The
percentage  decrease in 1999 resulted primarily from the MECA acquisition in May
of 1999, which contributed revenue without  commensurate  increases in sales and
marketing  costs.  The increase in dollar amount in 1998 over 1997 resulted from
increased  commissions  associated with increased  revenues,  salary  increases,
additional personnel and higher advertising costs.

           PRODUCT  DEVELOPMENT.  Product development  expenses include costs of
enhancing  existing  products and developing new products.  Product  development
expenses were $24.5 million,  or 22.9% of revenue,  in 1999,  $14.9 million,  or
17.4% of  revenue,  in 1998 and $11.5  million,  or 15.9% of  revenue,  in 1997.
Increases  in dollar  amount of product  development  expenses  were largely the
result of increased  personnel,  primarily resulting from the MECA and ULTRADATA
acquisitions,   additional   costs  for   integrating   acquired   products  and
accelerating  development  of our online banking  products.  We will continue to
commit significant resources to product development efforts.

           Product development  expenses in 1998 and 1997 were offset in part by
capitalization of software  development  efforts. We capitalized $1.0 million of
software  development  costs in 1998  and $5.0  million  in  1997.  No  software
development  costs were capitalized in 1999.  Capitalized  software  development
costs,  net of  accumulated  amortization,  were $5.3 million as of December 31,
1999,  $8.3 million as of December 31, 1998, and $9.9 million as of December 31,
1997. We believe that the current  development cycle for our  compliance-related
products,  which  typically  have  relatively  long lives,  was completed in the
second quarter of 1998 and, accordingly, there should be a significant reduction
in the capitalization of software development costs in future periods.

           GENERAL AND ADMINISTRATIVE.  General and administrative expenses were
$18.7 million,  or 17.5% of revenue in 1999, $10.0 million,  or 11.7% of revenue
in 1998 and $8.3 million,  or 11.4% of revenue in 1997.  The increase in 1999 is
due principally to the acquisitions of MECA and ULTRADATA.  The increase in 1998
is due principally to additional systems and  infrastructure  costs necessary to
accommodate revenue growth.

GOODWILL AMORTIZATION

           Goodwill  acquired in  acquisitions is amortized over periods ranging
from five to 20 years.  Goodwill  amortization  included in operations  was $2.5
million,  $1.2 million and $1.3 million and  goodwill  amortization  included in
cost of revenue was $0.6 million,  $0.9 million and $0.5 million in 1999,  1998,
and 1997, respectively.  The increase in 1999 is due principally to the goodwill
resulting from the ULTRADATA acquisition. We recorded approximately $49

                                       22

<PAGE>

million of goodwill in the ULTRADATA acquisition,  which is being amortized over
20 years. Goodwill, net of accumulated amortization,  was $59.1 million and $6.2
million, respectively, at December 31, 1999 and 1998.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT AND OTHER CHARGES

           In  connection  with  the  acquisition  of  MECA in May  1999  and of
ULTRADATA in August 1999, we recorded expenses of $3.8 million and $5.2 million,
respectively,  for in-process research and development efforts in process at the
dates of  acquisition.  The  values  assigned  to the  in-process  research  and
development efforts were determined by independent appraisal and represent those
efforts in  process at the dates of  acquisition  that had not yet  reached  the
point  where  technological  feasibility  had been  established  and that had no
alternative  future uses.  Accounting  rules  require these costs be expensed as
incurred.  These research and development  efforts resulted in products released
during the first quarter of 2000.

           In  connection  with  our  acquisition  of  the  assets  of  Mortgage
Dynamics,  Inc. in October 1998, we recorded a pretax charge of $1.0 million for
research and development efforts in process at the date of the acquisition.  The
values  assigned  to  the  in-process  research  and  development  efforts  were
determined by independent  appraisals and represent  those efforts in process at
the dates of  acquisition  that had not reached  the point  where  technological
feasibility  had  been  established  and that had no  alternative  future  uses.
Accounting  rules  require  that these  costs be  expensed  as  incurred.  These
research and development efforts resulted in products released during 1999.

           In the third  quarter of 1999, we also expensed name change costs and
certain costs related to acquisitions required to be expensed ($0.3 million) and
settlement of an arbitration proceeding ($0.9 million). In the fourth quarter of
1998, we recorded  aggregate other pretax charges of $1.7 million  consisting of
the present  value of the remaining  liability  for certain  leased office space
Concentrex ceased using, and the remaining  goodwill  associated with the fisCAL
credit analysis  products and related  severance  costs. See Notes 1, 2 and 7 of
Notes to Consolidated Financial Statements.

INCOME FROM OPERATIONS

           Income (loss) from operations in 1999 was ($10.2) million,  or (9.5%)
of revenue,  compared  to $8.2  million,  or 9.6% of  revenue,  in 1998 and $8.8
million, or 12.2% of revenue, in 1997. Excluding the impact of the $10.2 million
in  unusual  items in 1999 and of the $2.6  million  in  unusual  items in 1998,
operating  income  would  have  been $0 in 1999 and $10.8  million,  or 12.7% of
revenue, in 1998.

NON-OPERATING INCOME (EXPENSE)

           Non-operating income (expense),  which consists primarily of interest
income and expense,  was a net expense of ($4.5)  million in 1999  compared to a
net  expense  of ($0.7)  million  in 1998 and net  non-operating  income of $0.3
million in 1997. The increase in net interest expense in 1999 is attributable to
the  debt  we  incurred  to  finance  the  ULTRADATA   and  MECA   transactions.
Non-operating  expense in 1998 included a $0.3 million charge  representing  our
initial  investment  in a joint  venture.  See Note 1 of  Notes to  Consolidated
Financial Statements.

           In September 1997, we completed the sale of our RPxpress!  remittance
processing division.  On an annual basis, the remittance processing revenues and
expenses  were both  approximately  $1.0  million.  We received 10% of the sales
price in cash with the remainder payable in yearly installments with interest at
8.5% per annum over four  years.  In  connection  with the sale,  we  recorded a
non-operating gain of $0.6 million.

           In February 1997, our Board of Directors  elected not to proceed with
a planned  follow-on  stock offering of our common stock. We took a $0.5 million
non-operating  charge  in  the  first  quarter  of  1997  as  a  result  of  the
cancellation. Our Board of Directors determined that the stock price at which we
would be required to offer the shares was too low and would unfairly  dilute the
investment of existing shareholders.

                                       23

<PAGE>

PROVISION (BENEFIT) FOR INCOME TAXES

           The effective tax rate (benefit) expense for 1999 was (6.0%) compared
to 46.8% in 1998 and 45.5% in 1997.  The  difference  between  federal and state
statutory tax rates and our effective tax rates in 1999,  1998, and 1997 results
primarily from nondeductible charges for in-process research and development and
from increased  amortization of nondeductible  intangibles  (primarily goodwill)
related to acquisitions.

MARKET RISK

           We have not entered into any  derivative  financial  instruments  for
speculative  purposes.  We may be exposed to future interest rate changes on our
debt. During 1999 we incurred significant  indebtedness related to acquisitions.
A  hypothetical  10% increase in interest rates on our level of debt existing at
December 31, 1999 would  increase cash interest  expense by  approximately  $0.6
million  per year.  We have  purchased  an interest  rate cap for a  substantial
portion of our long-term  debt.  The interest rate cap will become  effective if
the prime rate of interest exceeds 10% per year.

LIQUIDITY AND CAPITAL RESOURCES

           Net cash provided by operations  was $8.4 million in 1999 compared to
$11.0 million in 1998.  Working capital decreased to a deficit of ($3.6) million
at December  31, 1999 from $17.0  million at December  31,  1998.  The  decrease
occurred  primarily  because of  liabilities  assumed in the MECA and  ULTRADATA
acquisitions   and  because  of  additional   debt  incurred  to  finance  those
acquisitions.

           Net cash  used in  investing  activities  in 1999 was  $67.3  million
compared to $6.1 million in 1998.  The increase in 1999 was primarily  caused by
the  acquisitions of MCS and ULTRADATA.  Expenditures for property and equipment
of  $2.7  million  in  1999  were  primarily   attributable  to  investments  in
infrastructure necessary to accommodate our growth.

           Net cash  from  financing  activities  of $56.6  million  in 1999 was
principally  proceeds  from long  term  debt  financing  activities  related  to
acquisitions,   including  the  issuance  of  convertible   subordinated  notes,
partially offset by payments of long term debt and deferred loan costs.

           Days sales outstanding (DSO's) in accounts receivable, including both
billed  and  unbilled  accounts  receivable,  was 124 days at  December  31,1999
compared  to 109 days at December  31,  1998.  The  increase in DSO's in 1999 is
principally  due to Year 2000  pressures  that  caused  our  customers  to delay
payments to us because of their perceived need for liquidity at year end, and to
our  decision to issue  annual and  quarterly  maintenance  invoices in December
rather  than in January as we did in 1998,  which  also  caused a  corresponding
increase in deferred  revenues.  Our  project-oriented  business  often requires
unbilled accounts  receivable and milestone  billings,  both of which often have
longer collection  cycles.  Unbilled accounts  receivable were $7.3 million,  or
18.0% of total  accounts  receivable,  at  December  31,  1999  compared to $7.6
million, or 25.8% of total accounts receivable, at December 31, 1998.

           In connection  with the MECA and ULTRADATA  acquisitions  in 1999, we
substantially   increased  our  outstanding   debt.  See  Note  6  of  Notes  to
Consolidated  Financial  Statements.  At December 31, 1999, we had the following
debt under our loan agreements:

<TABLE>
<CAPTION>

                                                                 Gross         Stated Interest Rate At
                                                                Amount            December 31, 1999
                                                          ---------------      -----------------------
<S>                                                       <C>                  <C>
Revolving Line of Credit                                  $  3.5 million                9.50%
3-year Term A Loan                                          35.0 million               10.50%
3-year Term B Loan                                          30.0 million               13.50%
Debt discount related to loan
  renegotiation fees and fair value of warrants             (3.2)million
                                                            --------
      Total                                               $ 65.3 million
</TABLE>

                                       24

<PAGE>

           In  connection  with  the  ULTRADATA  acquisition,   we  also  issued
convertible subordinated notes with an original face amount of $7.4 million with
original  issue  discount of $1.9 million.  We received  gross  proceeds of $5.5
million  upon  issuance  of the  notes.  See  Note 6 of  Notes  to  Consolidated
Financial Statements.

           As a result of our 1999  acquisitions,  we are highly leveraged.  Our
loan agreements contain financial  covenants that we must abide by. For example,
we are required to generate specific levels of earnings before interest,  taxes,
depreciation and amortization  ("EBITDA") measured over four-quarter periods. We
may from time to time fail to comply with the covenants in our loan  agreements.
Any failure to comply with these covenants could have a material  adverse effect
on us unless we are able to obtain  waivers for  noncompliance.  There can be no
assurance  that our lenders would grant waivers for  noncompliance,  which could
lead to an event of  default  under the loan  agreements,  or that such  waivers
would be conditioned on terms and conditions acceptable to us.

           During  the  fourth   quarter  of  1999,  we  amended  our  financing
agreements with our lenders. In consideration for those amendments, we agreed to
pay fees of 2% of the  total  loan  commitments  (a total of $1.7  million)  and
agreed to decrease the exercise and  conversion  prices of certain  warrants and
convertible  notes held by the  lenders  from $12.34 per share to $10 per share.
The new exercise and  conversion  prices for the warrants were  established at a
24% premium to the market price of our common  stock at December  31, 1999.  The
loan fees paid and the fair value attributed to the change in the exercise price
of the  warrants  held by the debt  holders  was  recorded  as  additional  debt
discount.  If the conversion  price of the convertible  notes is further reduced
pursuant to the terms of the notes, we will record additional  interest expense.
See Note 6 of Notes to Consolidated Financial Statements.

           Our loan  agreements  also contain  significant  restrictions  on our
activities.  For  example,  we must obtain the consent of our lenders  before we
purchase  or sell  significant  assets.  Additionally,  the  terms  of our  loan
agreements  prohibit us from incurring  additional  indebtedness  or issuing new
equity  securities  without the consent of the lenders.  These  restrictions may
make it difficult or impossible to raise additional funds if we need to do so.

           Future cash requirements could include, among other things, purchases
of  companies,  products or  technologies,  expenditures  for internal  software
development,  capital  expenditures  necessary to the expansion of the business,
and  installment  payments  on debt  related  to  acquisitions.  Available  cash
resources  include cash generated by operations  plus a revolving line of credit
up to $15.0  million,  subject to  borrowing  base  restrictions  related to our
accounts receivable.

           From time to time we receive  contract  claims from our customers and
other parties,  including  requests for full or partial  refunds of moneys paid.
Although  there can be no  assurance  that such  claims,  either alone or in the
aggregate,  will not have a material adverse effect on our results of operations
or  financial  position,  we believe  that as of the date of this filing no such
claims will have such an effect.  From time to time, we initiate contract claims
against our customers and other parties,  including claims for payment of unpaid
invoices.

           We  believe  that  funds  expected  to  be  generated  from  existing
operations  and  borrowings  under our revolving  line of credit will provide us
with sufficient funds to finance our current operations for at least the next 12
months.  We  may  require  additional  funds  to  support  our  working  capital
requirements,  future  acquisitions  or for other purposes and may seek to raise
such additional  funds through one or more public or private  financings of debt
or equity,  or from other  sources.  No assurance  can be given that  additional
financing  will be available  or, that,  if available,  such  financing  will be
obtainable on terms favorable to us or our shareholders.

YEAR 2000

           The Year 2000 issue  identifies  problems  that may arise in computer
equipment and software,  as well as embedded electronic systems,  because of the
way these  systems are  programmed  to interpret  certain  dates that will occur
around the change in century.  In the computer  industry  this is primarily  the
result of computer programs being designed and developed using or reserving only
two digits in date fields  (rather  than four  digits) to identify  the century,
without considering the ability of the program to properly  distinguish the Year
2000 century change.  Likewise,  other dates may present problems because of the
way the digits are interpreted. We experienced no material Year 2000

                                       25

<PAGE>

problems  with our  products  at the  century  change.  Costs  incurred  through
December  31,  1999 to assess Year 2000  issues  were not  significant  and were
funded through operating cash flows.

           Based on information  gathered to date, we are not presently aware of
any Year  2000  issue  that  could  materially  affect  our  operations,  either
self-originated   or  caused  by  third-party   service  vendors  or  providers.
Nevertheless,  there  can be no  assurance  that we  will  not  experience  some
operating  difficulties  as a result of Year 2000 issues going forward.  If they
occur,  these  difficulties  could  require us to incur  unanticipated  costs to
remedy the problems and, either  individually or  collectively,  have a material
adverse effect on our business operations and financial results.

QUARTERLY RESULTS

           We  have  experienced,  and  expect  in  the  future  to  experience,
significant  quarterly   fluctuations  in  our  results  of  operations.   These
fluctuations may be caused by various factors, including, among others: the size
and timing of product orders and shipments;  the timing and market acceptance of
new products and product enhancements introduced by us and our competitors;  our
product mix,  including  expenses of  implementation  and  royalties  related to
certain products; the timing of our completion of work under contracts accounted
for under the  percentage  of completion  method;  customer  order  deferrals in
anticipation  of new products;  aspects of the  customers'  purchasing  process,
including the evaluation,  decision-making and acceptance of products within the
customers'  organizations;  the sales  process for our  products,  including the
complexity of customer  implementation  of our  products;  the number of working
days in a quarter;  federal and state  regulatory  events;  competitive  pricing
pressures;   technological   changes  in  hardware   platform,   networking   or
communication  technology;  changes  in  company  personnel;  the  timing of our
operating  expenditures;  specific economic conditions in the financial services
industry and general economic conditions.

           Our  business  has  experienced,  and  is  expected  to  continue  to
experience,  some degree of  seasonality  due to its  customers'  budgeting  and
buying cycles. Our strongest revenue quarter in any year is typically the fourth
quarter  and our  weakest  revenue  quarter is  typically  the  second  quarter.
Customers'  purchases are tied closely to their internal budget  processes.  For
some of our  customers,  budgets are  approved at the  beginning of the year and
budgeted amounts often must be utilized by the end of the year. In addition, our
incentive  sales   compensation   plan  provides  for  increases  in  commission
percentages as sales people  approach or exceed their annual sales quotas.  As a
result of these two factors,  we usually  experiences  increased sales orders in
the  last  quarter.  This  pattern  was  altered  in 1999 as Year  2000  issues,
including  regulatory  requirements  and internal  business  process  decisions,
affected customers' buying decisions.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

SEE MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS - MARKET RISK.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements,  notes thereto and supplementary data required by this
item begin on page F-1 as listed in Item 14 of Part IV of this document.

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

None.

                                       26

<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information  required by this item is included  under the  captions  PROPOSAL 1.
ELECTION OF DIRECTORS,  MEMBERS OF THE BOARD OF DIRECTORS  CONTINUING IN OFFICE,
NON-DIRECTOR   EXECUTIVE  OFFICERS,   AND  SECTION  16(A)  BENEFICIAL  OWNERSHIP
REPORTING  COMPLIANCE,  respectively,  in the Company's  Proxy Statement for its
2000 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

Information  required  by  this  item  is  included  under  the  captions  BOARD
COMPENSATION,  EXECUTIVE  COMPENSATION,  EMPLOYMENT  CONTRACTS,  TERMINATION  OF
EMPLOYMENT AND  CHANGE-IN-CONTROL  ARRANGEMENTS  AND REPORT OF THE  COMPENSATION
COMMITTEE  in the  Company's  Proxy  Statement  for its 2000  Annual  Meeting of
Shareholders and is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this item is included  under the caption  SECURITY
OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT in the Company's  Proxy
Statement for its 2000 Annual Meeting of Shareholders and is incorporated herein
by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required  by this item is included  under the caption  CERTAIN
RELATIONSHIPS AND RELATED  TRANSACTIONS in the Company's Proxy Statement for its
2000 Annual Meeting of Shareholders and is incorporated herein by reference.

                                       27

<PAGE>

                                     PART IV

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

FINANCIAL STATEMENTS AND SCHEDULES

The  Consolidated  Financial  Statements,  together  with the report  thereon of
Arthur Andersen LLP, are included on the pages indicated below:

<TABLE>

                                                                                            PAGE

<S>                                                                                         <C>

   Report of Independent Public Accountants                                                  F-1

   Consolidated Balance Sheets - December 31, 1999 and 1998                                  F-2

   Consolidated Statements of Operations for the years ended December 31, 1999,
   1998 and 1997                                                                             F-3

   Consolidated Statements of Shareholders' Equity for the years ended December 31,
   1999, 1998 and 1997                                                                       F-4

   Consolidated Statements of Cash Flows for the years ended December 31, 1999,
   1998 and 1997                                                                             F-5

   Notes to Consolidated Financial Statements                                                F-6

The following schedule and report thereon is filed herewith:

   Report of Independent Public Accountants on Financial Statement Schedule                  F-23

   Schedule II            Valuation and Qualifying Accounts                                  F-24

</TABLE>

REPORTS ON FORM 8-K

A Form 8-K/A was filed with the  Securities  and Exchange  Commission on October
27,  1999 with  respect  to the  acquisition  of  ULTRADATA  Corporation  by the
Registrant.

                                       28

<PAGE>

EXHIBITS

The  following  exhibits  are  filed  herewith  and  this  list is  intended  to
constitute the exhibit index:

Number         Description
-------------- -----------------------------------------------------------------

          2.1  Stock Purchase and Sale Agreement dated November 21, 1995,  among
               CFI ProServices, Inc., Culverin Corporation, Eric T. Wagner, John
               M. Loveless, David Steffens and Douglas Teets previously filed as
               Exhibit 2.1 to the Current  Report on Form 8-K dated November 21,
               1995 and as filed with the Securities and Exchange  Commission on
               December 6, 1995 and incorporated herein by reference.

          2.2  Stock Purchase and Sale Agreement effective April 1, 1996, by and
               among   MicroBilt   Corporation,   First   Financial   Management
               Corporation  and CFI  ProServices,  Inc.  -  previously  filed as
               Exhibit 2.1 with the  Company's  Form 8-K dated April 1, 1996 and
               as filed with the Securities and Exchange Commission on April 16,
               1996 and incorporated herein by reference.

          2.3  Asset Purchase and Sale  Agreement,  effective  April 1, 1996, by
               and  among  Input  Creations,  Inc.,  its  shareholders  and  CFI
               ProServices,  Inc. -  previously  filed as  Exhibit  2.1 with the
               Company's  Form 8-K dated  April 17,  1996 and as filed  with the
               Securities and Exchange Commission on May 2, 1996 and
               incorporated herein by reference.

          2.4  Asset Purchase and Sale Agreement,  effective January 1, 1999, by
               and  among  Modern  Computer  Systems,   Inc.,  other  affiliated
               corporations,   their  shareholder  and  CFI  ProServices,   Inc.
               previously filed as Exhibit 2.1 with the Company's Form 8-K dated
               February 10, 1999 and as filed with the  Securities  and Exchange
               Commission  on  February  10,  1999 and  incorporated  herein  by
               reference.

          2.5  Purchase  and Sale  Agreement  dated  May 17,  1999,  among  MECA
               Software,  L.L.C.,  the  members of MECA  Software,  L.L.C.,  CFI
               ProServices,  Inc.,  and MoneyScape  Holdings,  Inc. - previously
               filed as Exhibit 2.1 to the Current Report on Form 8-K dated June
               2, 1999, as filed with the Securities and Exchange  Commission on
               June 7, 1999, and incorporated herein by reference.

          2.6  Agreement and Plan of Merger dated as of May 17, 1999,  among the
               Company,   UFO   Acquisition   Co.,  and  ULTRADATA   Corporation
               previously filed as Exhibit 2.1 to the Current Report on Form 8-K
               dated August 27, 1999, as filed with the  Securities and Exchange
               Commission  on  August  27,  1999,  and  incorporated  herein  by
               reference.

          3.1  Registrant's  Amended  and  Restated  Articles  of  Incorporation
               previously filed as Exhibit 3(i)(a) to the Registration Statement
               on Form S-1 No.  33-64894,  as  filed  with  the  Securities  and
               Exchange  Commission on June 23, 1993 and incorporated  herein by
               reference.

          3.2  Amendments  to  Registrant's  Amended  and  Restated  Articles of
               Incorporation  (effective  June 28, 1993) -  previously  filed as
               Exhibit  3(i)(b) to the  Registration  Statement  on Form S-1 No.
               33-64894, as filed with the Securities and Exchange Commission on
               July 26, 1993 and incorporated herein by reference.

          3.3  Amendments  to  Registrant's  Amended  and  Restated  Articles of
               Incorporation  (effective  July 26, 1993) -  previously  filed as
               Exhibit  3(i)(c)  to the  Registration  Statement  on  Form  S-1,
               Registration Statement No. 33-64894, as filed with the Securities
               and  Exchange  Commission  on August  10,  1993 and  incorporated
               herein by reference.

                                       29

<PAGE>

Number         Description
-------------- -----------------------------------------------------------------

          3.4  Registrant's  Amended and Restated  Bylaws - previously  filed as
               Exhibit  3(ii)  to  the  Registration   Statement  on  Form  S-1,
               Registration Statement No. 33-64894, as filed with the Securities
               and  Exchange  Commission  on August  10,  1993 and  incorporated
               herein by reference.

         10.1* Nonqualified  Stock Option Plan dated October 15, 1993 previously
               filed as Exhibit 99.10 to the Registration  Statement on Form S-8
               (Registration  No.  33-70506),  as filed with the  Securities and
               Exchange Commission on October 19, 1993 and
               incorporated herein by reference.

         10.2* Registrant's  Restated  Outside  Director  Compensation and Stock
               Option Plan - previously  filed as Exhibit 10.3 to the  Company's
               Form 10-Q for the quarter  ended March 31, 1994 and  incorporated
               herein by reference.

          10.3 First  Amendment  to  Registrant's   Restated   Outside  Director
               Compensation and Stock Option Plan effective May 14, 1999.

         10.4* Registrant's  Standardized  Regional  Prototype  401(k)  Cash  or
               Deferred  Savings  Plan  and  Trust,  adopted  December  1,  1994
               previously  filed as Exhibit 10.12 to the Company's Form 10-K for
               the year ended December 31, 1995 and as filed with the Securities
               and Exchange  Commission on April 1, 1996 and incorporated herein
               by reference.

         10.5* Legal  Services  Agreement  for the State of Louisiana  effective
               March 13, 1986  between the  Company  and  McGlinchey,  Stafford,
               Mintz,  Cellini & Lang, a Louisiana  professional law corporation
               (confidential  treatment requested) - previously filed as Exhibit
               10.25 to the Registration Statement on Form S-1 (Registration No.
               33-64894)  filed with the Securities  and Exchange  Commission on
               July 26, 1993 and incorporated herein by reference.

         10.6* 1995  Consolidated  and  Restated  Stock Option Plan - previously
               filed as Exhibit 99.13 to the Registration  Statement on Form S-8
               filed with the  Securities  and Exchange  Commission  on March 1,
               1995 and incorporated herein by reference.

          10.7 First  Amendment to 1995  Consolidated  and Restated Stock Option
               Plan  -  previously   filed  as  Exhibit  9.2  to  the  Company's
               Registration  Statement on Form S-8 filed with the Securities and
               Exchange   Commission   on  or  about   September   4,  1996  and
               incorporated herein by reference.

          10.8 Second  Amendment to 1995  Consolidated and Restated Stock Option
               Plan effective January 21, 1999.

          10.9 Office  Lease dated  March 18, 1994  between the Company and John
               Hancock  Mutual  Life  Insurance  Company -  previously  filed as
               Exhibit  10.1 to the  Company's  Form 10-Q for the quarter  ended
               March 31, 1994 dated May 12,  1994 and filed with the  Securities
               and Exchange  Commission on May 13, 1994 and incorporated  herein
               by reference.

                                       30

<PAGE>

Number         Description
-------------- -----------------------------------------------------------------

         10.10 First amendment,  dated July 8, 1996, to office lease dated March
               18,  1994  between  the  Company  and John  Hancock  Mutual  Life
               Insurance  Company -  previously  filed as  Exhibit  10.17 to the
               Company's  Annual Report on Form 10-K for the year ended December
               31, 1996 as filed with the Securities and Exchange  Commission on
               March 27, 1997 and is incorporated herein by reference.

         10.11 Second  amendment,  dated January 11, 1999, to office lease dated
               March 18, 1994 between the Company and John  Hancock  Mutual Life
               Insurance  Company.  previously  filed  as  Exhibit  10.10 to the
               Company's  Annual Report on Form 10-K for the year ended December
               31, 1998 as filed with the Securities and Exchange  Commission on
               March 31, 1999 and is incorporated herein by reference.

         10.12 Third  Amendment  to Office  Lease dated  August 11, 1999 between
               Registrant  and  John  Hancock  Mutual  Life  Insurance   Company
               previously  filed as Exhibit  10.2 to the Current  Report on Form
               8-K dated  August  27,  1999,  as filed with the  Securities  and
               Exchange  Commission on August 27, 1999, and incorporated  herein
               by this reference.

         10.13 Fourth  Amendment to Office Lease dated December 16, 1999 between
               Registrant and Louis Dreyfus Property Group, Inc.

        10.14* Employment and Non-competition  Agreement dated November 21, 1995
               between CFI ProServices, Inc. and Eric T. Wagner previously filed
               as Exhibit 10.1 to the Company's Current Report on Form 8-K filed
               with the Securities  and Exchange  Commission on December 6, 1995
               and incorporated herein by reference.

        10.15* Form  of  Executive  Retention   Agreement--previously  filed  as
               Exhibit 10.1 to the  Company's  Current  Report on Form 8-K filed
               with the  Securities  and Exchange  Commission on August 22, 1994
               and incorporated herein by reference.

         10.16 Financing Agreement dated as of August 13, 1999, by and among CFI
               ProServices,  Inc., ULTRADATA Corporation, MECA Software, L.L.C.,
               MoneyScape Holdings,  Inc., Foothill Capital Corporation,  Ableco
               Finance L.L.C.,  Levine Leichtman  Capital Partners II, L.P., and
               Foothill Partners III, L.P. - previously filed as Exhibit 10.1 to
               the  Company's  Form 10-Q dated August 16,  1999,  filed with the
               Securities  and  Exchange  Commission  on August  16,  1999,  and
               incorporated herein by reference.

        10.17* CFI ProServices, Inc. Employee Savings and Stock Ownership Plan -
               previously filed as Exhibit 5.1 to the Current Report on Form 8-K
               dated August 27, 1999, as filed with the  Securities and Exchange
               Commission on August 27, 1999,  and  incorporated  herein by this
               reference.

         10.18 Revolving   Credit  Note  in  the  principal   amount  of  up  to
               $15,000,000  dated as of  August  13,  1999  previously  filed as
               Exhibit  2.2 to the Current  Report on Form 8-K dated  August 27,
               1999,  as filed with the  Securities  and Exchange  Commission on
               August 27, 1999, and incorporated herein by reference.

         10.19 Form of Term Loan B Promissory  Note in the  aggregate  principal
               amount of  $30,000,000  dated as of August 13, 1999 -  previously
               filed as  Exhibit  2.4 to the  Current  Report  on Form 8-K dated
               August  27,  1999,  as filed  with the  Securities  and  Exchange
               Commission  on  August  27,  1999,  and  incorporated  herein  by
               reference.

                                       31

<PAGE>

Number         Description
-------------- -----------------------------------------------------------------
         10.20 Form of Warrant  issued by the Company to the Lenders to purchase
               up to an aggregate  of 381,822  shares of the common stock of the
               Company dated as of August 13, 1999 - previously filed as Exhibit
               2.5 to the Current  Report on Form 8-K dated August 27, 1999,  as
               filed with the Securities  and Exchange  Commission on August 27,
               1999, and incorporated herein by reference.

         10.21 Note  Purchase  Agreement  among the Company and the Note Holders
               dated as of August 13,  1999  previously  filed as Exhibit 2.7 to
               the Current  Report on Form 8-K dated August 27,  1999,  as filed
               with the Securities  and Exchange  Commission on August 27, 1999,
               and incorporated herein by reference.

         10.22 Form of 10% Convertible  Subordinated  Discount Notes dated as of
               August 13, 1999 - previously  filed as Exhibit 2.8 to the Current
               Report on Form 8-K  dated  August  27,  1999,  as filed  with the
               Securities and Exchange Commission on August 27, 1999, and
               incorporated herein by reference.

         10.23 First Amendment to Note between the Company and Levine  Leichtman
               Capital  Partners  II, L.P.  effective  as of  December  31, 1999
               previously  filed in the Company's  First  Prospectus  Supplement
               dated January 14, 2000,  filed with the  Securities  and Exchange
               Commission  on  January  14,  2000  and  incorporated  herein  by
               reference.

         10.24 First  Amendment  to Note  between  the  Company  and  Soundshore
               Holdings,  LTD effective as of December 31, 1999 previously filed
               in the Company's First  Prospectus  Supplement  dated January 14,
               2000,  filed  with the  Securities  and  Exchange  Commission  on
               January 14, 2000 and incorporated herein by reference.

         10.25 First  Amendment to Note between the Company and US Bancorp Libra
               effective  as of  December  31,  1999  previously  filed  in  the
               Company's  First  Prospectus  Supplement  dated January 14, 2000,
               filed with the Securities and Exchange  Commission on January 14,
               2000, 1999 and incorporated herein by reference.

         10.26 Form of  Amendment  Number  One to  Warrant  among  the  Company,
               Foothill  Capital Partners III, L.P.,  Levine  Leichtman  Capital
               Partners II, L.P. and Abelco Finance LLC effective as of December
               31,  1999  previously  filed in the  Company's  First  Prospectus
               Supplement  dated January 14, 2000, filed with the Securities and
               Exchange  Commission on January 14, 2000 and incorporated  herein
               by reference.

         10.27 Registration  Rights  Agreement for the Lender Warrants among the
               Company and the Lenders  dated as of August 13, 1999 - previously
               filed as  Exhibit  2.6 to the  Current  Report  on Form 8-K dated
               August  27,  1999,  as filed  with the  Securities  and  Exchange
               Commission  on  August  27,  1999,  and  incorporated  herein  by
               reference.

         10.28 Registration  Rights Agreement for the  Subordinated  Notes among
               the  Company  and the Note  Holders  dated as of August 13,  1999
               previously filed as Exhibit 2.9 to the Current Report on Form 8-K
               dated August 27, 1999, as filed with the  Securities and Exchange
               Commission  on  August  27,  1999,  and  incorporated  herein  by
               reference.

                                       32

<PAGE>

Number         Description
-------------- -----------------------------------------------------------------

         10.29 Registration  Rights Agreement for the Libra Warrants dated as of
               August 13, 1999 - previously filed as Exhibit 2.11 to the Current
               Report on Form 8-K  dated  August  27,  1999,  as filed  with the
               Securities and Exchange Commission on August 27, 1999, and
               incorporated herein by reference.

         10.30 Warrant  issued to U.S.  Bancorp  Libra,  financial  advisor  and
               placement agent for the Company, to purchase 58,000 shares of the
               Company's common stock,  dated as of August 13, 1999 - previously
               filed as  Exhibit  2.10 to the  Current  Report on Form 8-K dated
               August  27,  1999,  as filed  with the  Securities  and  Exchange
               Commission  on  August  27,  1999,  and  incorporated  herein  by
               reference.

         10.31 Amendment  Number  One to  Financing  Agreement  by and among CFI
               ProServices,  Inc., ULTRADATA Corporation, MECA Software, L.L.C.,
               MoneyScape Holdings,  Inc., Foothill Capital Corporation,  Ableco
               Finance L.L.C.,  Levine Leichtman  Capital Partners II, L.P., and
               Foothill  Partners III, L.P. - previously  filed in the Company's
               First  Prospectus  Supplement  dated January 14, 2000, filed with
               the  Securities  and Exchange  Commission on January 14, 2000 and
               incorporated herein by reference.

        10.32* Interim Amendment to CFI ProServices,  Inc. 401(k) Profit Sharing
               Plan dated as of December 31, 1999.

          21   Subsidiaries of the Registrant

          23   Consent of Independent Public Accountants

          27   Financial Data Schedule

--------------------------------
*Management contract or compensatory plan or arrangement.

                                       33

<PAGE>

SIGNATURES

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

Date: March 30, 2000
      --------------

                                        CFI PROSERVICES, INC.

                                        BY: /S/ MATTHEW W. CHAPMAN
                                            ----------------------
                                            Matthew W. Chapman
                                            Chairman and Chief Executive Officer

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 indicated on March 29, 2000.

SIGNATURE                               TITLE

/S/ MATTHEW W. CHAPMAN         Director, Chairman and Chief Executive Officer
----------------------         (Principal Executive Officer)
Matthew W. Chapman

/S/ ROBERT P. CHAMNESS         Director, President and Chief Operating Officer
----------------------
Robert P. Chamness

/S/ KURT W. RUTTUM             Vice President and Chief Financial Officer
------------------             (Principal Financial and Accounting Officer)
Kurt W. Ruttum

/S/ ROBERT T. JETT             Director, Executive Vice President and Secretary
------------------
Robert T. Jett

/S/ J. KENNETH BRODY           Director
--------------------
J. Kenneth Brody

/S/ LORRAINE O. LEGG           Director
--------------------
Lorraine O. Legg

/S/ ERAN S. ASHANY             Director
------------------
Eran S. Ashany

/S/ FRANK E. BRAWNER           Director
--------------------
Frank E. Brawner

/S/ ROBERT B. WITT             Director
------------------
Robert B. Witt

/S/ L. B. DAY                  Director
-------------
L. B. Day

                                       34

<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
CFI ProServices, Inc., d/b/a Concentrex Incorporated

We have audited the accompanying consolidated balance sheets of CFI ProServices,
Inc. (an Oregon corporation), d/b/a Concentrex Incorporated, and subsidiaries as
of  December  31,  1999 and  1998 and the  related  consolidated  statements  of
operations,  shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1999. These consolidated  financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of CFI ProServices,
Inc.,  d/b/a Concentrex  Incorporated,  and subsidiaries as of December 31, 1999
and 1998 and the  results of their  operations  and their cash flows for each of
the three  years in the  period  ended  December  31,  1999 in  conformity  with
accounting principles generally accepted in the United States.

                                                             ARTHUR ANDERSEN LLP

Portland, Oregon
January 28, 2000

                                      F-1

<PAGE>

                             CFI PROSERVICES, INC.
                          dba CONCENTREX INCORPORATED
                          CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>

<CAPTION>

                                                                           December 31,       December 31,
                                                                              1999                 1998
                                                                        ------------------   ------------------
<S>                                                                   <C>                  <C>

ASSETS
Current Assets:

  Cash and cash equivalents                                           $                 -  $             3,589
  Restricted cash                                                                   1,289                    -
  Receivables, net of allowances of  $3,268 and $2,600                             40,938               29,701
  Inventory                                                                           583                  249
  Deferred tax asset                                                                2,843                1,341
  Prepaid expenses and other current assets                                         4,342                1,810
  Income taxes receivable                                                           1,653                    -
                                                                        ------------------   ------------------
          Total Current Assets                                                     51,648               36,690

Property and equipment, net of accumulated
  depreciation of $12,894 and $9,947                                                7,532                4,534
Software development costs, net of accumulated
  amortization of $4,561 and $3,368                                                 5,283                8,277
Purchased software costs, net of accumulated
  amortization of $803 and $19                                                      7,808                  211
Goodwill, net of accumulated amortization
  of $6,928 and $4,763                                                             59,133                6,190
Deferred tax asset                                                                  9,438                  355
Other assets, net                                                                   3,924                  524
                                                                        ==================   ==================
          Total Assets                                                $           144,766  $            56,781
                                                                        ==================   ==================


LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:

  DRAFTS PAYABLE                                                      $               728  $                 -
  Accounts payable                                                                  7,424                1,986
  Accrued expenses                                                                 15,181                8,017
  Deferred revenues                                                                18,026                5,300
  Customer deposits                                                                 5,823                3,681
  Line of credit                                                                    3,482                    -
  Current portion of long-term debt                                                 4,570                  261
  Income taxes payable                                                                  -                  473
                                                                        ------------------   ------------------
          Total Current Liabilities                                                55,234               19,718

Commitments and Contingencies
Long-term Debt, less current portion and debt discount                             59,036                5,693
Other Long-term Liabilities                                                         1,399                    -

Convertible Subordinated Notes                                                      5,647                    -

Mandatory Redeemable Class A Preferred Stock                                          728                  738

Shareholders' Equity:
  Series preferred stock, 5,000,000 shares authorized,
    none issued and outstanding                                                         -                    -
  Common stock, no par value, 10,000,000 shares authorized,
   5,250,781 and 5,032,977 shares issued and outstanding                           25,703               19,689
  Retained earnings (accumulated deficit)                                          (2,981)              10,943
                                                                        ------------------   ------------------
          Total Shareholders' Equity                                               22,722               30,632
                                                                        ------------------   ------------------
          Total Liabilities and Shareholders' Equity                  $           144,766  $            56,781
                                                                        ==================   ==================

</TABLE>

The accompanying notes are an integral part of these consolidated balance sheets

                                      F-2

<PAGE>

                             CFI PROSERVICES, INC.
                          dba CONCENTREX INCORPORATED
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except per share data)

<TABLE>

<CAPTION>

                                                                                      Years Ended December 31,
                                                                       -----------------------------------------------------
                                                                            1999               1998               1997
                                                                      ----------------   ---------------    ---------------
<S>                                                                   <C>                <C>                <C>

Revenue

  Software Products and Services Group

     License Revenue                                                  $        48,730    $       47,590     $       38,281
     Service and Support Revenue                                               38,284            28,077             26,235
     Other Revenue                                                              8,295             4,141              3,143
   e-Commerce Group
     License Revenue                                                            1,786             1,612              2,193
     Service and Support Revenue                                                9,986             4,210              2,797
                                                                      ----------------   ---------------    ---------------
          Total Revenue                                                       107,081            85,630             72,649
Cost of Revenue                                                                42,625            29,423             27,041
                                                                      ----------------   ---------------    ---------------
          Gross Profit                                                         64,456            56,207             45,608

Operating Expenses
  Sales and marketing                                                          18,659            19,204             15,709
  Product development                                                          24,505            14,913             11,549
  General and administrative                                                   18,733            10,012              8,263
  Goodwill Amortization                                                         2,539             1,228              1,259
  Acquired in-process research and development
     and other charges                                                         10,208             2,661                  -
                                                                      ----------------   ---------------    ---------------
          Total Operating Expenses                                             74,644            48,018             36,780
                                                                      ----------------   ---------------    ---------------
          Income (Loss) From Operations                                       (10,188)            8,189              8,828

Non-operating Income (Expense)
  Interest expense                                                             (4,975)             (454)              (456)
  Interest income                                                                 269               295                170
  Canceled stock offering costs                                                     -                 -               (487)
  Gain on sale of operating division                                                -                 -                628
  Equity in losses attributable to joint venture                                    -              (670)              (148)
  Other, net                                                                      169                83                 52
                                                                      ----------------   ---------------    ---------------
          Total Non-operating Income (Expense)                                 (4,537)             (746)              (241)
                                                                      ----------------   ---------------    ---------------
Income (Loss) Before Provision for (Benefit from)
   Income Taxes                                                               (14,725)            7,443              8,587
Provision for (Benefit from) Income Taxes                                        (894)            3,483              3,907
                                                                      ----------------   ---------------    ---------------
Net Income (Loss)                                                             (13,831)            3,960              4,680
Preferred Stock Dividend                                                           93                95                 95
                                                                      ----------------   ---------------    ---------------
Net Income (Loss) Applicable to Common Shareholders                   $       (13,924)   $        3,865     $        4,585
                                                                      ================   ===============    ===============
Basic Net Income (Loss) Per Share                                     $         (2.71)   $         0.77     $         0.93
                                                                      ================   ===============    ===============
Diluted Net Income (Loss) Per Share                                   $         (2.71)   $         0.75     $         0.90
                                                                      ================   ===============    ===============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

                                      F-3

<PAGE>

                             CFI PROSERVICES, INC.
                          dba CONCENTREX INCORPORATED
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             (Dollars in thousands)

<TABLE>

<CAPTION>

                                                                Common Stock
                                                           ---------------------------      Retained Earnings
                                                             Shares           Amount      (Accumulated Deficit)      Total
                                                           ----------        ---------    ---------------------    ---------
<S>                                                        <C>               <C>          <C>                      <C>

BALANCES, DECEMBER 31, 1996                                 4,824,973        $ 17,745               $ 2,493        $ 20,238
       Issuance of Common Stock                               100,450             724                     -             724
       Tax benefits from stock transactions                         -             396                     -             396
       Net income applicable to common shareholders                 -               -                 4,585           4,585
                                                           ----------        ---------    ---------------------    ---------

BALANCES, DECEMBER 31, 1997                                 4,925,423          18,865                 7,078          25,943
       Issuance of Common Stock                               107,554             768                     -             768
       Tax benefits from stock transactions                         -              56                     -              56
       Net income applicable to common shareholders                 -               -                 3,865           3,865
                                                           ----------        ---------    ---------------------    ---------

BALANCES, DECEMBER 31, 1998                                 5,032,977          19,689                10,943          30,632
       Issuance of Common Stock                               306,004           3,414                     -           3,414
       Repurchase of Common Stock                             (88,200)         (1,145)                    -          (1,145)
       Issuance of Common Stock warrants                            -           2,088                     -           2,088
       Exchange of options in connection with acquisition           -           1,651                     -           1,651
       Tax benefits from stock transactions                         -               6                     -               6
       Net income (loss) applicable to common shareholders          -               -               (13,924)        (13,924)
                                                           ----------        ---------    ---------------------    ---------

BALANCES, DECEMBER 31, 1999                                 5,250,781        $ 25,703              $ (2,981)       $ 22,722
                                                           ==========        =========    =====================    =========

</TABLE>

The accompanying notes are an integral part of these consolidated statements.

                                   F-4

<PAGE>

                             CFI PROSERVICES, INC.
                          dba CONCENTREX INCORPORATED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                           Year Ended December 31,
                                                                   ----------------------------------------
                                                                      1999          1998            1997
                                                                   ----------    -----------    -----------
<S>                                                                <C>           <C>            <C>
Cash flows from operating activities:
  Net income (loss) applicable to common shareholders              $ (13,924)    $    3,865     $    4,585
  Adjustments to reconcile net income (loss) applicable to common
    shareholders to cash provided by operating activities:
      Depreciation and amortization                                    9,505          6,805          8,540
      Write off of in process research and development                 9,000          2,661              -
      Gain on sale of operating division                                   -              -           (628)
      Interest accreted on mandatory redeemable preferred stock           93             95             95
      Interest accreted on notes payable                                 301             93             93
      Amortization of debt discount and deferred loan costs            1,056              -              -
      Expense for stock warrants issued                                  124              -              -
      Expense for ESSOP shares issued                                  1,230              -              -
      Deferred income taxes                                           (1,124)          (586)            87
  Equity in losses attributable to joint venture                           -            670            148
      (Increase) decrease in assets, net of effects from
          purchase of businesses:
             Receivables, net                                         (4,954)         2,749         (9,135)
             Inventory                                                   302             48           (141)
             Prepaid expenses and other assets                          (655)           612           (269)
             Income taxes receivable                                  (1,647)             -              -
      Increase  (decrease)  in  liabilities,  net of effects
          from  purchase  of businesses:
             Drafts payable                                              728              -           (425)
             Accounts payable                                          3,924           (133)          (765)
             Accrued expenses                                         (3,935)            52         (1,186)
             Deferred revenues                                         9,541         (7,307)         2,053
             Customer deposits                                          (684)         1,966            846
             Income taxes payable                                       (473)          (596)         1,475
                                                                   ----------    -----------    -----------
                Net cash provided by operating activities              8,408         10,994          5,373

Cash flows from investing activities:
  Expenditures for property and equipment                             (2,711)        (1,680)        (2,713)
  Software development costs capitalized                                   -         (1,054)        (4,994)
  Investment in joint venture                                              -           (304)          (322)
  Proceeds from long-term note receivable                                153            189              -
  Issuance of note receivable                                              -           (391)             -
  Purchase of investments                                                  -           (206)             -
  Proceeds from sale of operating division                                 -              -             87
  Cash paid for acquisition of Modern Computer Systems, Inc.
    net of cash received                                              (5,591)             -              -
  Cash received in acquisition of MECA Software, LLC                     889              -              -
  Cash paid for acquisition of ULTRADATA Corporation, net of
    cash received                                                    (59,968)             -              -
  Cash paid for other acquistion                                         (98)             -              -
  Cash paid for acquisition of Mortgage Dynamics, Inc.                     -         (2,668)             -
                                                                   ----------    -----------    -----------
           Net cash used in investing activity                       (67,326)        (6,114)        (7,942)

Cash flows from financing activities:
  Net proceeds from (payments on) line of credit                        (518)        (1,310)         3,719
  Payments on note payable                                              (166)             -              -
  Payments on long-term debt                                          (8,291)          (666)        (1,751)
  Proceeds from long term debt                                        65,000              -              -
  Proceeds from issuance of convertible subordinated notes             5,550              -              -
  Payment of deferred loan costs                                      (4,674)             -              -
  Payments on mandatory redeemable preferred stock                      (103)          (103)          (103)
  Proceeds from issuance of common stock                                 965            768            724
  Repurchase of common stock                                          (1,145)             -              -
                                                                   ----------    -----------    -----------
           Net cash provided by (used in) financing activities        56,618         (1,311)         2,589
                                                                   ----------    -----------    -----------

Increase (decrease) in cash and cash equivalents                      (2,300)         3,569             20

Cash and cash equivalents (including restricted cash):
  Beginning of period                                                  3,589             20              -
                                                                   ----------    -----------    -----------
  End of period                                                    $   1,289     $    3,589     $       20
                                                                   ==========    ===========    ===========

</TABLE>

The accompanying notes are an integral part of these consolidated statements.

                                      F-5

<PAGE>

                              CFI PROSERVICES, INC.
                           dba CONCENTREX INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

CFI ProServices,  Inc., dba Concentrex  Incorporated,  and its subsidiaries (the
Company)  provides  technology-powered   solutions  to  the  financial  services
industry.  The Company offers a broad range of traditional software products and
services, as well as business-to-business  e-commerce solutions.  Software for a
financial institution includes back office "core" processing,  loan origination,
new account opening,  branch automation and cross selling.  The Company has been
in business since 1978.

BASIS OF CONSOLIDATION

The  consolidated  financial  statements  include the accounts of the  Company's
wholly  owned  subsidiaries:   ULTRADATA  Corporation  (ULTRADATA),   MoneyScape
Holdings, Inc. (MSHI), and MECA Software,  L.L.C. (MECA). The Company owns a 99%
membership interest in MECA, and MSHI owns the remaining 1% membership interest.
All intercompany  transactions  and balances have been  eliminated.  The Company
made certain  acquisitions  in October 1998,  January 1999,  May 1999 and August
1999 (see Note 2). These  acquisitions  have been  included in the  consolidated
financial statements since the dates of acquisition.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and short-term  investments with maturity
dates of three months or less at the time of acquisition.

INVENTORY

Inventory consists primarily of printed bank forms and computer hardware, and is
stated at the lower of cost or market,  with cost  determined  on the  first-in,
first-out (FIFO) method.

PROPERTY AND EQUIPMENT

Property  and  equipment  is  stated  at cost,  less  accumulated  depreciation.
Depreciation  is computed on a  straight-line  basis over the  estimated  useful
lives of the individual assets, which are three years for computer equipment and
software,  and five to seven years for furniture,  fixtures and other equipment.
Leasehold  improvements  are amortized over the shorter of the estimated  useful
life or the term of the lease.  Expenditures  for  repairs and  maintenance  are
charged to current  operations,  and costs related to renewals and  improvements
that add  significantly  to the useful  life of an asset are  capitalized.  When
depreciable  properties  are  retired  or  otherwise  disposed  of, the cost and
related accumulated depreciation are removed from the accounts and the resulting
gain or loss is reflected in income.

SOFTWARE

The costs of internally  developed  software which meet the criteria in SFAS No.
86,  "Accounting  for the  Costs of  Computer  Software  To Be Sold,  Leased  or
Otherwise   Marketed,"  are   capitalized.   These  costs  are  amortized  on  a
straight-line  basis over  estimated  economic  lives ranging from three to five
years.

Purchased software is capitalized at cost and amortized on a straight-line basis
over the estimated economic life of three to six years. Generally, contracts for
purchased  software require royalties to be paid based on revenues  generated by
the related software.

                                      F-6

<PAGE>

<TABLE>
<CAPTION>

                                                                            Years Ended December 31,
                                                                 ------------------------------------------------
                                                                    1999              1998              1997
                                                                 -----------      -------------     -------------
                                                                                 (In thousands)
<S>                                                           <C>              <C>               <C>

Amortization of internally developed software                 $       2,993    $         2,633   $         3,465
Amortization of purchased software                                      784                 19             1,079

</TABLE>

During 1998 and 1997 several software  development  projects reached completion.
As a result,  the Company began to amortize  certain product  development  costs
which had been capitalized in prior periods.  In addition,  the Company recorded
amortization  as a result of software  acquired in connection  with the 1999 and
1998 acquisitions.  Amortization costs in 1997 included accelerated amortization
for certain products being replaced by new products which  management  concluded
were no longer technologically viable.

GOODWILL

Goodwill resulting from acquisitions is amortized on a straight-line  basis over
estimated lives of five to 20 years. The Company believes these useful lives are
appropriate  based  on the  factors  influencing  acquisition  decisions.  These
factors include product life,  profitability and general industry  outlook.  The
Company reviews its goodwill for impairment at the end of each quarter,  or more
frequently  when events or changes in  circumstances  indicate that the carrying
amount of the assets may not be recoverable. To perform that review, the Company
estimates  the sum of expected  future  undiscounted  cash flows from  operating
activities. If the estimated net cash flows are less than the carrying amount of
goodwill,  the Company  recognizes an impairment loss in an amount  necessary to
write the assets down to fair value as  determined  by the  expected  discounted
future  cash flows.  In 1998 the  Company  wrote off  $877,000,  reflecting  the
remaining  goodwill  associated  with its fisCAL  credit  analysis  products and
related  severance costs calculated in accordance with  pre-existing  employment
contracts.  These charges are included in the acquired  in-process  research and
development and other charges in the Company's Statement of Operations for 1998.

INVESTMENT IN JOINT VENTURE

In November  1997 the Company made a 50%  investment in Lori Mae,  L.L.C.  (Lori
Mae), a company  designed to  securitize  small  business  loans  originated  by
community  banks.  The  Company  uses  the  equity  method  to  account  for its
investment  in this joint  venture.  In 1998 the  Company  wrote off its initial
investment  in Lori Mae in the  amount  of  $352,000  due to lack of  acceptable
market demand for Lori Mae's initial product. This charge, in addition to losses
attributable to the joint venture, are included in equity in losses attributable
to joint venture in the Company's  Statement of Operations for 1998. At December
31, 1998 and 1999, the Company's net investment in Lori Mae was $0.

DEFERRED LOAN COSTS AND DEBT DISCOUNT

Deferred loan costs  associated  with the  Company's  debt are included in other
assets.  Deferred loan costs net of amortization  were $3,602 and $0 at December
31, 1999 and 1998, respectively. Debt discount is recorded as a reduction in the
carrying value of the debt.  Deferred loan costs and debt discount are amortized
using the effective interest method. See Note 6.

REVENUE RECOGNITION

License revenues are derived from three kinds of transactions:

          o    Licenses with no follow-on obligations on the part of the Company
               are recognized upon delivery.

          o    Licenses which require  installation  and training by the Company
               prior to use are recognized upon  completion of the  installation
               and training.

                                      F-7

<PAGE>

          o    Licenses  which  include  significant  amounts of tailoring  and,
               occasionally,  customization  are  recognized  on a percentage of
               completion   basis  as  the  tailoring  and   customization   are
               performed. Estimates of efforts to complete a project are used in
               the   percentage   of   completion   calculation.   Due   to  the
               uncertainties  inherent in these estimates,  actual results could
               differ from those estimates.

If the license agreement obligates the Company to provide  post-contract support
at no additional cost to the customer,  the revenue related to the post-contract
support is recognized ratably over the support period. Returns and exchanges are
infrequent and are recorded as reductions in license revenue when the obligation
to accept the return or conduct the exchange becomes known.

Revenues for  consulting,  custom  programming  and training,  where  separately
contracted  for, are  recognized as the related  services are  performed.  Other
revenues  include sales of preprinted  forms and hardware,  which are recognized
upon delivery. Amounts received in advance for service and support contracts are
deferred and recognized  ratably over the support  period.  Amounts in excess of
invoiced  minimums for service and support  charges based on usage are estimated
and  recognized in the period in which usage occurs.  Included in receivables at
December  31, 1999 and 1998 are  unbilled  receivables  of $7.3 million and $7.7
million,  respectively.  These  primarily  relate to  percentage  of  completion
contracts and contracts with deferred payment terms.

During  1997 and 1998  Statements  of  Position  (SOP) 97-2 and 98-9,  "Software
Revenue Recognition," were released and became effective for the Company for the
year  ended  December  31,  1998.  SOP 97-2 and SOP 98-9 did not have a material
impact on the Company's financial statements.

INCOME TAXES

The  Company  accounts  for  income  taxes in  accordance  with  SFAS  No.  109,
"Accounting For Income Taxes." This  pronouncement  requires deferred tax assets
and  liabilities  to be valued  using the  enacted  tax rates  expected to be in
effect when the temporary differences are recovered or settled.

ADVERTISING COSTS

Advertising costs are expensed as incurred.  These costs were $1.8 million, $1.4
million and $1.2 million for the years ended  December 31, 1999,  1998 and 1997,
respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,  and
disclosure of contingent  assets and  liabilities,  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting periods. Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's  financial  instruments consist of accounts  receivable,  accounts
payable and debt  instruments.  At December 31, 1999 and 1998, the fair value of
the  Company's  accounts  receivable  and accounts  payable  approximated  their
carrying value due to their  short-term  nature.  At December 31, 1999 and 1998,
the fair value of the Company's debt, excluding debt discount,  approximated its
carrying value.

                                      F-8

<PAGE>

EARNINGS PER SHARE

Basic  earnings per share (EPS) and diluted EPS are  computed  using the methods
prescribed by SFAS No. 128,  "Earnings per Share." Basic EPS is calculated using
the weighted  average  number of common  shares  outstanding  for the period and
diluted EPS is computed  using the weighted  average number of common shares and
dilutive common equivalent shares outstanding.  Following is a reconciliation of
basic EPS and diluted EPS:

<TABLE>
<CAPTION>

Year Ended December 31,           1999                             1998                             1997
------------------------------    --------- --------- ---------    --------- --------- ---------    --------- -------- ---------
(In thousands, except per
share data)                                           Per                              Per                             Per
                                                      Share                            Share                           Share
BASIC EPS                          Income    Shares   Amount        Income    Shares   Amount        Income   Shares   Amount
---------                         --------- --------- ---------    --------- --------- ---------    --------- -------- ---------
<S>                               <C>       <C>       <C>          <C>       <C>       <C>          <C>       <C>      <C>

Income (loss) available to
 Common shareholders              $(13,924)   5,132   $(2.71)      $ 3,865     5,012    $ 0.77       $4,585    4,919    $ 0.93
                                                      =========                        =========                       =========
Effect of Dilutive Securities
  Stock Options                      -          -                     -          155                     -       205
                                  --------- ---------              --------- ---------              --------- --------

DILUTED EPS
-----------
Income (loss) available to
 Common shareholders              $(13,924)    5,132   $(2.71)      $ 3,865     5,167    $ 0.75     $  4,585    5,124    $ 0.90
                                                      =========                        =========                       =========
</TABLE>

The number of options and  warrants to purchase  shares of common  stock and the
assumed conversion of convertible subordinated notes that were excluded from the
table above (as the effect would have been anti-dilutive) were 2,112,447 for the
year ended  December 31, 1999,  787,184 for the year ended December 30, 1998 and
94,500 for the year ended December 31, 1997, respectively.

SUPPLEMENTARY CASH FLOW INFORMATION

<TABLE>
<CAPTION>

The Company made the following cash payments:                                     Years Ended December 31,
                                                                             ------------------------------------
                                                                               1999          1998         1997
                                                                             ---------     ---------     --------
                                                                                       (In thousands)
<S>                                                                       <C>              <C>           <C>

Interest and preferred dividends                                          $     2,401           554   $      517
Income taxes                                                                    2,016         4,751        2,294

</TABLE>

                                      F-9

<PAGE>

Noncash investing and financing activities were as follows:

<TABLE>
<CAPTION>

                                                                                  Years Ended December 31,
                                                                             ------------------------------------
                                                                               1999         1998          1997
                                                                             ---------     --------     ---------
                                                                                       (In thousands)
<S>                                                                       <C>           <C>          <C>

Tax benefit from exercise of nonqualified stock options                   $         6   $       56   $       396
Note receivable received in connection with the sale of  remittance
   processing division                                                             --           --           788
Increase in goodwill for accrued acquisition related  contingent
   royalties                                                                      752        1,085         1,140
Decrease in goodwill and increase in deferred tax asset
   related to acquired net operating losses                                        --           --           389
Reclassification of bank line of credit to long-term debt                          --        4,000            --
Issuance of common stock in connection with acquisition of Modern
       Computer Systems, Inc.                                                     650           --            --
Issuance of common stock in connection with acquisition of MECA
       Software, L.L.C.                                                           569           --            --
Assumption of debt in connection with acquisition of MECA Software,
       L.L.C.                                                                   7,500           --            --
Other liabilities assumed in connection with acquisitions                      17,676           --            --
Accrual of loan renegotiation costs                                             1,711           --            --
Fair value of stock warrants issued in connection with financings               1,964           --            --
Fair value of stock options converted in connection with acquisition of
       ULTRADATA Corporation                                                    1,651           --            --
Note payable acquired in connection with acquisition of ULTRADATA
       Corporation                                                                504           --            --

</TABLE>

RECLASSIFICATIONS

Certain  reclassifications  in the financial statements and notes have been made
to prior year financial statements to conform with the current presentation.

COMPREHENSIVE INCOME

SFAS No.  130,  "Reporting  Comprehensive  Income,"  establishes  standards  for
reporting and display of  comprehensive  income.  Comprehensive  income includes
charges  or  credits  to  equity  that did not  result  from  transactions  with
shareholders.  SFAS No.  130 became  effective  during  1998.  As net income and
comprehensive income were identical in 1999, 1998 and 1997, SFAS No. 130 did not
have an impact on the Company's financial statements.

SEGMENT REPORTING

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information," requires the Company to report certain information about operating
segments.  SFAS No. 131 became  effective for the Company's  year ended December
31, 1998. The Company  provides  integrated  software to financial  institutions
for, among other things, use in back office processing,  branch automation, loan
origination,  new account opening and electronic banking. The Company classifies
its products primarily as application  products and e-commerce  products.  These
products  constitute  the  Company's  suite of products and are sold to the same
types of  customer  through  similar  distribution  channels.  Accordingly,  the
Company   believes  it  operates  in  one  segment.   During  1999  revenue  was
reclassified  for all periods into the Software  Products and Services group and
the  e-Commerce  group.  Total  revenues  did not  change  as a  result  of this
reclassification.  Revenues for products and associated  services are separately
reported in the Software Products and Services group and the e-Commerce group on
the Statement of Operations.

Virtually  all of the  Company's  sales  are  made  in the  United  States.  The
remaining sales are made to customers located in Latin America.

                                      F-10

<PAGE>

RECENT PRONOUNCEMENT

In June 1999, Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities"  (SFAS 137).  SFAS 137 is an  amendment  to  Statement  of Financial
Accounting   Standards  No.  133,   "Accounting   for   Derivative  and  Hedging
Activities."  SFAS 137  establishes  accounting and reporting  standards for all
derivative instruments.  SFAS 137 is effective for the Company beginning January
1, 2001. The Company  currently does not have any  derivative  instruments  and,
accordingly,  does not expect the  adoption of SFAS 137 to have an impact on its
results of operations or financial position.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  No. 101 (SAB No.  101) on revenue  recognition.  SAB No. 101  provides
guidance  on  the  recognition,  presentation,  and  disclosure  of  revenue  in
financial statements. SAB No. 101 is effective for the Company beginning January
1, 2000.  The  Company  does not expect  the  adoption  of SAB No. 101 to have a
material impact on its results of operations or financial position.

2.        ACQUISITIONS

Effective  January 1, 1999 the Company acquired  substantially all of the assets
of Modern Computer Systems, Inc. and certain related corporations (collectively,
MCS). MCS offers hardware and software  solutions for the back office accounting
needs of community banks and credit unions. The purchase price approximated $7.0
million and  consisted  of cash paid of $6.0  million,  common  stock  issued of
$650,000  and  acquisition  costs.  The  purchase  price  was  allocated  to the
estimated  fair  value of the  assets  acquired,  which  included  goodwill  and
purchased  software.  The  acquisition  was  accounted  for as a  purchase.  The
operations  of MCS have been  included in the  Company's  results of  operations
since January 1, 1999. The 1998 pro forma results reflecting the MCS acquisition
are not materially  different from the Company's  reported  results for the year
ended December 31, 1998.

Effective May 17, 1999 the Company and MSHI  acquired 99% and 1%,  respectively,
of the equity in MECA in exchange for 50,000 shares of Concentrex  common stock.
The  acquisition  was  accounted  for as a  purchase.  The  net  purchase  price
approximated $12.3 million and consisted of the common stock issued,  assumption
of net  liabilities  and accrued  acquisition  costs.  The  liabilities  assumed
included  $7.5  million of debt owed to certain  former  members of MECA and was
repaid by the Company from proceeds from bank borrowings. The purchase price was
allocated to the estimated fair value of the assets acquired, which included the
expensing  of $3.8  million  of  in-process  research  and  development  and the
recognition of a $10.5 million deferred tax asset. The technological feasibility
of the acquired  technology,  which has no alternative  future use, had not been
established  prior to the  purchase.  The excess of the fair value of the assets
acquired  over  cost  (negative  goodwill)  was  allocated  to  reduce  acquired
non-current  assets.  The Company is still obtaining certain data related to the
acquisition,  and accordingly,  the purchase price allocation  remains open. The
operations  of MECA have been  included in the  Company's  results of operations
since May 17, 1999.

Effective  August 13, 1999  Concentrex  acquired all of the  outstanding  common
stock of  ULTRADATA.  ULTRADATA  provides  information  management  software and
solutions for relationship-oriented  financial institutions. The acquisition was
accounted  for as a  purchase,  resulting  in  approximately  $56.4  million  of
goodwill and purchased software. These amounts are being amortized over a period
of  six  to  20  years.   The  purchase  price  was  $67.7  million,   including
acquisition-related  expenses. The purchase price was allocated to the estimated
fair value of the assets acquired,  which included the expensing of $5.2 million
of in-process  research and development.  The  technological  feasibility of the
acquired  technology,  which  has  no  alternative  future  use,  had  not  been
established  prior to the purchase.  The Company is still obtaining certain data
related to the  acquisition,  and,  accordingly,  the purchase price  allocation
remains open.  The  operations of ULTRADATA  have been included in the Company's
results of operations since August 13, 1999.

In October 1998 the Company acquired substantially all of the assets of Mortgage
Dynamics,  Inc.  (MDI).  The  acquisition  was accounted for as a purchase.  The
purchase price was $2.7 million in cash plus certain  contingent  royalties tied
to future revenue production. In conjunction with this acquisition,  the Company
recorded  approximately  $1.5  million  of  goodwill,  which is being  amortized
ratably  over  seven  years;  $230,000  of  purchased  software,  which is being
amortized ratably over three years; and $991,000 of acquired in-process research
and development,  determined by independent appraisal, all of which was expensed
in 1998. The technological feasibility of the acquired technology,  which has no
alternative  future use, had not been  established  prior to the  purchase.  Pro
forma results  reflecting the MDI acquisition are not materially  different from
the Company's reported results for 1998.

                                      F-11

<PAGE>

Unaudited  pro forma  results  of  operations  assuming  the MECA and  ULTRADATA
acquisitions occurred at January 1, 1998 are as follows:

<TABLE>
<CAPTION>

                                                               Years ended December 31,
                                                             ---------------------------
                                                               1999              1998
                                                             ----------       ----------
                                                           (In thousands except per share data)
<S>                                                         <C>                <C>

Total Revenue                                               $     131,684      $   139,637
Net loss applicable to common shareholders                  $     (21,991)     $   (10,133)
Basic net loss per share                                    $       (4.26)     $     (2.00)
Diluted net loss per share                                  $       (4.26)     $     (2.00)

</TABLE>

Pro forma  results  include the  write-off of acquired  in-process  research and
development in the year incurred.

3.        PROPERTY AND EQUIPMENT

The major categories of property and equipment are summarized as follows:

<TABLE>

<CAPTION>

                                                                                    December 31,
                                                                       -----------------------------------------
                                                                             1999                    1998
                                                                       -----------------        ----------------
                                                                                    (In thousands)
<S>                                                                 <C>                      <C>

      Computer hardware and software                                $            14,397      $           10,630
      Furniture and fixtures                                                      4,206                   3,293
      Leasehold improvements                                                      1,584                     558
      Machinery and equipment                                                       239                      --
                                                                       -----------------        ----------------
                                                                                 20,426                  14,481
      Less- accumulated depreciation                                             12,894                   9,947
                                                                       =================        ================
                                                                    $             7,532      $            4,534
                                                                       =================        ================
</TABLE>

Depreciation expense was as follows:

<TABLE>

<CAPTION>

                                                                         Years Ended December 31,
                                                             -------------------------------------------------
                                                                 1999             1998               1997
                                                             -------------    -------------      -------------
                                                                              (In thousands)
<S>                                                       <C>              <C>                <C>

Depreciation expense                                      $         2,668  $         2,381    $         2,230
                                                             =============    =============      =============

</TABLE>

                                      F-12

<PAGE>

4.        ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>

<CAPTION>

                                                                           December 31,
                                                                 ----------------------------------
                                                                     1999                1998
                                                                 -------------       --------------
                                                                          (In thousands)
<S>                                                           <C>                 <C>

      Accrued royalties                                       $         1,372     $          1,766
      Accrued commissions                                                 831                  960
      Accrued bonuses and profit sharing                                3,206                2,095
      Sales taxes                                                       1,141                  599
      Accrued acquisition costs, primarily severance                    2,660                   --
      Other                                                             5,971                2,597
                                                                 =============       ==============
                                                              $        15,181     $          8,017
                                                                 =============       ==============

</TABLE>

Accrued severance costs were recorded in connection with the 1999  acquisitions.
Amounts relate to employees terminated prior to December 31, 1999 as a result of
the acquisitions and were accrued pursuant to contractual obligations assumed in
the acquisitions.

5.        EMPLOYEE BENEFIT PLANS

The Company  created a profit  sharing plan (the Plan) on February 1, 1989 under
the provisions of Section 401(k) of the Internal Revenue Code. Effective January
1, 1999, the Plan was amended to be an Employee Savings and Stock Ownership Plan
(ESSOP). The ESSOP provides for employee profit sharing and employer matching of
401(k)  contributions  to be made in the form of Company common stock.  Employer
matching  contributions  to the ESSOP are made at the discretion of the Board of
Directors and were as follows:

                                           Years Ended December 31,
                              --------------------------------------------------
                                  1999             1998                1997
                              -------------    -------------      --------------
                                                (In thousands)

Employer contributions       $         944    $         856      $           468
                              =============    =============      ==============

The Board of  Directors  has approved an  officers'  bonus plan.  The amount and
timing of bonuses and profit sharing payments under the ESSOP are at the Board's
discretion.  In 1999 the  profit  sharing  payment  under  the ESSOP was made in
common stock. The expense associated with these plans was as follows:

<TABLE>
<CAPTION>

                                                  Years Ended December 31,
                                     ---------------------------------------------------
                                         1999             1998                1997
                                     -------------    -------------      ---------------
                                                       (In thousands)
<S>                               <C>              <C>                <C>

Bonus and profit sharing expense  $         4,331  $         2,735    $             850
                                     =============    =============      ===============

</TABLE>

Through  December 31, 1998 the Company had a qualified  employee  stock purchase
plan (ESPP) which allowed  qualified  employees to direct up to seven percent of
monthly base pay for purchases of stock. The purchase price for shares purchased
under the plan was 85  percent  of the  lesser of the fair  market  value at the
beginning or end of the plan year.  The ESPP  terminated in accordance  with its
terms during 1999.

                                      F-13

<PAGE>

6.        FINANCINGS

COMMON STOCK

On May 14,  1999 the  Company  sold  90,000  shares of its  common  stock to one
investor for gross proceeds of $900,000.  The proceeds of the issuance were used
to repay liabilities acquired in the MECA acquisition.

During January 1999 the Company's Board of Directors  authorized a repurchase of
up to $5.0 million of the Company's  common  stock.  During the first quarter of
1999,  the  Company  repurchased  88,200  shares  of its  common  stock for $1.1
million. The Company did not repurchase any other shares in 1999.

DEBT

On May 17,  1999 the Company  entered  into two  lending  agreements  (the "USNB
Lending Agreements") with U.S. Bank National Association ("USNB"). On August 13,
1999 the USNB Lending  Agreements were terminated,  and all amounts  outstanding
were  repaid,  upon  completion  of the  financing  described  in the  following
paragraphs.  The first USNB Lending Agreement was for a revolving line of credit
in an amount not to exceed $5.0  million (the  "Revolving  Line") to be used for
working capital.  The Company drew $4.0 million on the Revolving Line on May 17,
1999 and used the  proceeds to pay off all amounts  owing on a previous  line of
credit  with Bank of  America;  the Bank of  America  credit  facility  with the
Company was simultaneously terminated. The second USNB Lending Agreement was for
a  revolving  line of credit  in an amount  not to  exceed  $15.0  million  (the
"Acquisition  Line") to be used for acquisitions.  The Company drew $8.3 million
on the Acquisition Line on May 17, 1999 and used the proceeds to pay off certain
liabilities assumed in connection with the acquisition of MECA on that date. The
Company  drew an  additional  $2.7 million on the  Acquisition  Line to purchase
shares of ULTRADATA common stock in open market  transactions during the quarter
ended June 30, 1999.

On August 13,  1999 the Company and its  subsidiaries  entered  into a financing
agreement  (the  "Financing   Agreement")  with  Foothill  Capital   Corporation
("Foothill") and certain other parties  (collectively,  the "Lenders") for three
credit facilities aggregating $80 million. The credit facilities provided under
the Financing Agreement terminate on August 13, 2002.

The first credit  facility under the Financing  Agreement is a revolving  credit
facility (the "Foothill  Revolver") for up to $15 million,  subject to borrowing
base  restrictions  related  to  accounts  receivable  of the  Company  and  its
subsidiaries.  The Foothill  Revolver  bears interest at an annual rate equal to
the prime rate plus 1.0%. On August 13, 1999 the Company drew $1.7 million under
the Foothill Revolver in connection with the ULTRADATA acquisition. The interest
rate on the Foothill Revolver was 9.5% at December 31, 1999.

The second credit facility under the Financing  Agreement is a term loan for $35
million  (the "Term A Loan") that bears  interest at an annual rate equal to the
prime rate plus 2.0%.  The Term A Loan has scheduled  quarterly  prepayments  of
principal beginning in the second quarter of 2000 that are expected to aggregate
$19 million over the term of the loan; the expected  remaining  principal of $16
million  is due on August 13,  2002.  On August 13,  1999 the  Company  drew $35
million under the Term A Loan in connection with the ULTRADATA acquisition.  The
interest rate on the Term A Loan was 10.5% at December 31,1999.

The third credit  facility under the Financing  Agreement is a term loan for $30
million  (the "Term B Loan") that bears  interest at an annual rate equal to the
prime rate plus 5.0%. The Term B Loan has no scheduled prepayments of principal.
The Term B Loan is due in full on  August  13,  2002.  On  August  13,  1999 the
Company drew $30 million under the Term B Loan in connection  with the ULTRADATA
acquisition.  The  interest  rate on the Term B Loan was 13.5% at  December  31,
1999.

In connection with the credit facilities provided under the Financing Agreement,
the Company issued to the Lenders  warrants (the "Lender  Warrants") to purchase
up to 381,822 shares of the common stock of the Company,  which represented 5.0%
of the fully  diluted  common stock of the Company at the date of issuance.  The
exercise  price of the Lender  Warrants  is $10.00 per share.  The  Company  has
registered  for resale the shares of common stock  issuable upon exercise of the
Lender  Warrants.  The Lender Warrants are exercisable  through August 13, 2004.
The Company also issued  warrants to purchase  58,000  shares of common stock to
the debt placement agent in connection with obtaining the

                                      F-14

<PAGE>

credit facilities under the Financing Agreement. The warrants issued to the debt
placement agent have the same terms as the Lender Warrants. The Company recorded
the fair value of the  warrants  as debt  discount  and  deferred  loan costs as
appropriate.

At December  31,1999 and  December  31,1998,  long-term  debt  consisted  of the
following:

<TABLE>

<CAPTION>

                                                                              December 31,         December 31,
                                                                                  1999                 1998
                                                                           -------------------   -----------------
                                                                                          (In thousands)
<S>                                                                     <C>                   <C>

Term A Loan                                                             $           35,000    $              --

Term B Loan                                                                         30,000                   --

Note payable, in relation to Halcyon acquisition, with imputed
interest at 8.0%, due in quarterly installments of $50, including
interest, payable through 2001                                                         272                  449

Note payable, assumed in the Halcyon acquisition, in
monthly   installments  of  $6,  including  interest
imputed at 8.5%, with final payment due October 2004                                   265                  307

Guaranteed royalties to be paid in relation to Input acquisition,
with imputed interest at 6.0%, payable through March 2001                              813                1,148

TSTG non-compete payments through April 1999                                            --                   50

Note payable, assumed in the ULTRADATA acquisition, due in
monthly installments of $29, including interest at the rate of 10.0%                   410                   --

Long-term portion of line of credit                                                     --                4,000
                                                                          -------------------   ------------------
                                                                                    66,760                5,954

Less current portion of long-term debt                                              (4,570)                (261)
Less debt discount                                                                  (3,154)                  --
                                                                          -------------------   ------------------
Long-term debt                                                          $           59,036    $           5,693
                                                                          ===================   ==================

</TABLE>

Payouts under long-term debt are as follows (in thousands):

YEARS ENDING DECEMBER 31,

2000                                                 $          4,570
2001                                                           10,021
2002                                                           52,055
2003                                                               60
2004                                                               54
                                                       ===============
                                                     $         66,760
                                                       ===============

On August 13, 1999 the Company also issued 10% Convertible Subordinated Discount
Notes (the  "Subordinated  Notes") in the aggregate original face amount of $7.4
million (with original issue discount of $1.9 million).  The Subordinated  Notes
are generally  non-callable by the Company through August 13, 2002.  Interest at
10% per

                                      F-15

<PAGE>

annum  accretes  on the  Subordinated  Notes  through  August 13,  2002 and then
becomes  payable  in cash  by the  Company  if the  Subordinated  Notes  are not
redeemed  or  converted  by that  date.  The  Subordinated  Notes are  initially
convertible  into a maximum of 743,754  shares of the Company's  common stock at
the  election  of the  holders.  The  actual  number  of shares  into  which the
Subordinated  Notes are convertible  depends upon the date of conversion and the
amount of  interest  accreted  on the  Subordinated  Notes  through  the date of
conversion.  The conversion price of the Subordinated Notes is $10.00 per share.
If the average  closing price of the  Company's  common stock for the 10 trading
days  ending on August 12, 2000 is less than  $10.00 per share,  the  conversion
price  will be  reduced  at that  time  to  equal  such  average  price.  If the
conversion price of the  Subordinated  Notes is reduced pursuant to the terms of
the Subordinated Notes, the Company will record additional interest expense. The
Subordinated  Notes are due on August 13, 2004 if not  previously  converted  by
that date. The Company  received gross proceeds of $5.5 million upon issuance of
the  Subordinated  Notes,  all of which  was used in  connection  the  ULTRADATA
acquisition.

During the fourth quarter of 1999, we amended our financing  agreements with our
lenders.  In consideration for those amendments,  we agreed to pay fees of 2% of
the total loan  commitments (a total of $1.7 million) and agreed to decrease the
exercise and conversion prices of certain warrants and convertible notes held by
the  lenders  from  $12.34  per share to $10 per  share.  The new  exercise  and
conversion  prices for the  warrants  were  established  at a 24% premium to the
market price of our common  stock at December  31, 1999.  The loan fees paid and
the fair value  attributed  to the change in the exercise  price of the warrants
held by the debt holders was recorded as additional debt discount.

As a result of our 1999 acquisitions,  the Company is highly leveraged. Our loan
agreements  contain  financial  covenants that we must abide by and prohibit the
payment of dividends on our common stock, among other restrictions. For example,
the Company is required to generate specific levels of earnings before interest,
taxes,  depreciation  and  amortization  ("EBITDA")  measured over  four-quarter
periods.  At December 31, 1999, the Company was in compliance with all financial
covenants.

7.     COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company leases facilities and equipment under operating  leases,  with terms
from one to 10 years, payable in monthly  installments.  Total lease expense was
as follows:

<TABLE>

<CAPTION>

                                                                   Years Ended December 31,
                                                 --------------------------------------------------------------
                                                      1999                  1998                    1997
                                                 ----------------      ---------------         ----------------
                                                                        (In thousands)
<S>                                           <C>                   <C>                     <C>

Lease expense                                 $            4,582    $           2,980       $            2,786
                                                 ================      ===============         ================

</TABLE>

Future minimum lease payments are as follows (in thousands):

YEARS ENDING DECEMBER 31,

2000                                  $          6,202
2001                                             5,873
2002                                             4,573
2003                                             4,470
2004                                             3,651
Thereafter                                       3,950
                                         ==============
                                      $         28,719
                                         ==============

In 1998 the  Company  recorded a loss of $793,000  for the present  value of net
future lease  payments due with respect to certain  office space in Atlanta that
the  Company  ceased  using.  The loss was  included  in  other  charges  on the
Statement of Operationsfor 1998.

CONTINGENCIES

The Company is involved in routine legal matters incidental to its business. The
Company  believes  that the  resolution  of any such matters that are  currently
outstanding  will not have a  material  effect  on its  financial  condition  or
results of  operations.  However,  no assurance can be given that the concurrent
resolution of several of such matters in manners

                                      F-16

<PAGE>

adverse to the Company would not have a material adverse effect on the Company's
financial condition or results of operations.

During the year ended  December  31,  1999,  the Company  recorded an expense of
$900,000 related to a settlement of an arbitration proceeding.  This expense was
included in other charges on the Statement of Operations for 1999.

8.        INCOME TAXES

The provision (benefit) for income taxes is as follows:

<TABLE>

<CAPTION>

                                                                   Years Ended December 31,
                                                 --------------------------------------------------------------
                                                      1999                  1998                    1997
                                                 ----------------      ---------------         ----------------
                                                                        (In thousands)
<S>                                           <C>                   <C>                     <C>

Current tax provision:

  Federal                                     $            206      $         3,667         $           3,443
  State                                                     24                  402                       377
                                                 ----------------      ---------------         ----------------
                                                           230                4,069                     3,820
Deferred tax provision (benefit)                        (1,124)                (586)                       87
                                                 ----------------      ---------------         ----------------
Total provision (benefit)                     $           (894)     $         3,483         $           3,907
                                                 ================      ===============         ================

</TABLE>

The  reconciliation  of the statutory  Federal  income tax rate to the Company's
effective income tax rate is as follows:

<TABLE>

<CAPTION>

                                                                         Years Ended December 31,
                                                                --------------------------------------------
                                                                   1999             1998            1997
                                                                -----------      -----------     -----------
<S>                                                             <C>              <C>             <C>

Federal statutory rate                                                (34.0) %         34.0  %         34.0  %
State income taxes net of Federal benefit                              (4.0)            4.8             4.2
Disallowance of meals and entertainment expenses                        0.9             1.4             1.1
Purchase accounting adjustments, including goodwill
  amortization                                                         29.8             5.5             5.7
Change in valuation allowance                                            --            (0.1)           (0.2)
Other                                                                   1.3             1.2             0.7
                                                                -----------      -----------     -----------
                                                                       (6.0) %         46.8  %         45.5  %
                                                                ===========      ===========     ===========

</TABLE>

                                      F-17

<PAGE>

Deferred tax assets and liabilities are comprised of the following components:

<TABLE>

<CAPTION>

                                                                                        December 31,
                                                                              ---------------------------------
                                                                                  1999                1998
                                                                              --------------       ------------
                                                                                       (In thousands)
<S>                                                                        <C>                  <C>

  Current deferred tax asset:

  Allowance for doubtful accounts                                          $        1,118       $        844
  Current portion of net operating loss carryforwards                                  --                164
  Severance and other accruals                                                      1,006                281
  Accrued vacation liability                                                          214                 --
  Other                                                                               505                 52
                                                                              --------------       ------------
  Total current deferred tax asset                                         $        2,843       $      1,341
                                                                              ==============       ============
  Long-term deferred tax asset (liability):

  In-process technology acquired                                           $        2,448       $      2,660
  Depreciation                                                                        197               (160)
  Intangibles amortization                                                         (1,259)               702
  Tax basis of acquired asset in excess of book                                     9,510                 --
  Capitalized software                                                             (1,900)            (3,145)
  Net operating loss and credit carryforwards                                       3,849                475
  Other                                                                               (33)               (77)
                                                                              --------------       ------------
  Gross long-term deferred tax asset                                               12,812                455
  Valuation allowance                                                              (3,374)              (100)
                                                                              --------------       ------------
  Total long-term deferred tax asset                                       $        9,438       $        355
                                                                              ==============       ============
</TABLE>

The increase (decrease) in the valuation allowance was as follows:

<TABLE>
<CAPTION>

                                                                         Years Ended December 31,
                                                              -----------------------------------------------
                                                                 1999             1998              1997
                                                              ------------     ------------      ------------
                                                                              (In thousands)
<S>                                                        <C>              <C>               <C>

Increase (decrease) in valuation allowance                 $        3,274   $         (72)    $         (17)
                                                              ============     ============      ============
</TABLE>

At December 31, 1999, for Federal tax return reporting purposes, the Company had
approximately  $7.1  million  of  regular  and  alternative   minimum  tax  loss
carryovers  that expire at various dates through 2019. In addition,  at December
31, 1999,  the Company had $1.2 million of general  business  credit  carryovers
that  expire  at  various  dates  through  2013.  The  general  business  credit
carryovers may not be used to offset taxes payable until the tax loss carryovers
are fully utilized. In 1997, based on management's estimate of realization,  the
Company recorded an increase in deferred tax assets and a corresponding decrease
in goodwill of $389,000  relating to net operating losses acquired in connection
with a prior acquisition.  Current Federal tax law limits the net operating loss
and tax credit carryforwards available to be used in any given year in the event
of certain  circumstances  including significant changes in ownership interests.
The Company is limited to using approximately $3.7 million of net operating loss
carryovers in any one year.  During 1999 the Company  acquired  certain tax loss
carryforwards in connection with its acquisitions. Because of the uncertainty of
realization of these tax loss  carryforwards,  the Company  provided a valuation
allowance against the related deferred tax assets. The increase in the valuation
allowance  in  1999  is  primarily   attributed  to  these   acquired  tax  loss
carryforwards.  Realization,  if any,  of these tax loss  carryforwards  will be
recorded as a reduction in goodwill.

                                      F-18

<PAGE>

9.        PREFERRED STOCK

The Company is redeeming the 10,300 outstanding  shares of mandatory  redeemable
Class A preferred stock at $262.14 per share over a 28-year period ending in the
year 2018. The present value of the remaining payments, which are due quarterly,
has been  recorded  as the  carrying  value at December  31, 1999 and 1998.  The
carrying value is adjusted as payments are made and dividends are accrued on the
shares yet to be redeemed.  The rate used to calculate  the present value was 13
percent per annum, which  approximated the Company's  borrowing rate at the time
redemption  commenced.  At December 31, 1999 there were 7,017 outstanding shares
remaining to be redeemed.

The repayment  schedule for the mandatory  redeemable Class A preferred stock at
December 31, 1999 is as follows (in thousands):

YEARS ENDING DECEMBER 31,

2000                                             $           103
2001                                                         103
2002                                                         103
2003                                                         103
Thereafter                                                 1,428
                                                    -------------
Total future payments                                      1,840
Less- Amount representing dividends                        1,112
                                                    -------------
Present value of future payments                             728
Less- Current portion                                         --
                                                    -------------
Long-term mandatory redeemable preferred stock   $           728
                                                    =============


10.       STOCK OPTIONS AND DIRECTOR COMPENSATION

At December 31, 1999, the Company had four stock plans:  a Consolidated  Plan, a
nonqualified  stock option plan, the Compensation Plan for outside directors and
the ESSOP.

Under the Consolidated Plan,  options,  which consist of incentive stock options
and  nonqualified  stock  options,  generally  vest  ratably over five years and
generally  expire  ten years  from the date of  grant.  The  exercise  price for
incentive  stock options  granted under the plan is set at the fair market value
at the grant date. The exercise price for nonqualified  options may be set below
the fair market value at the grant date, but, to this date, no options have been
granted with an exercise price less than fair market value at the grant date.

Under  the  nonqualified  stock  option  plan,  available  to  officers  and key
employees,  the vesting  period and exercise  price,  which may be set below the
fair  market  value at the date of grant,  are  determined  by the  Compensation
Committee  of the Board of  Directors.  No  options  have been  granted  with an
exercise price less than fair market value at the date of grant.

Under the  Restated  Outside  Director  Compensation  and Stock Option Plan (the
Compensation  Plan),  the company  provides  for outside  directors to be paid a
$7,000 retainer and $1,000 for each Board of Directors meeting attended, and the
issuance  of stock  options.  The  options  are  awarded  annually  on the first
business day after each annual meeting of shareholders.

Under the ESSOP 175,000 shares of Common Stock were initially reserved, of which
104,618 had been issued as of December 31,1999. The Company records compensation
expense for the shares  issued under the ESSOP based on the fair market value of
the stock.

                                      F-19

<PAGE>

Below is a table  showing the  activity for the three stock option plans for the
past three years:

<TABLE>
<CAPTION>

                                                                       Weighted Average              Total
                                                 Shares Subject       Exercise Price Per           Exercise
                                                   to Options                Share                   Price
                                                                                                (in thousands)
                                                -----------------     --------------------     ------------------
<S>                                             <C>                <C>                      <C>
Balances, December 31, 1996                            831,820     $              10.93     $            9,089
Options granted                                        118,000                    18.40                  2,172
Options exercised                                      (79,804)                    5.52                   (441)
Options lapsed                                         (86,713)                   13.45                 (1,167)
                                                -----------------     --------------------     ------------------
Balances, December 31, 1997                            783,303                    12.32                  9,653
Options granted                                        214,293                    12.39                  2,655
Options exercised                                      (51,680)                   10.43                   (539)
Options lapsed                                         (30,490)                   13.74                   (419)
                                                -----------------     --------------------     ------------------
Balances, December 31, 1998                            915,426                    12.40                 11,350
Options granted                                        468,956                     9.25                  4,337
Options exercised                                       (9,442)                    4.93                    (46)
Options lapsed                                         (13,437)                   10.19                   (137)
                                                -----------------     --------------------     ------------------
Balances, December 31, 1999                          1,361,503     $              11.39    $            15,504
                                                =================     ====================     ==================

</TABLE>

In August 1999 the  Company  exchanged  273,293 of  outstanding  employee  stock
options as a result of the ULTRADATA acquisition.  The exercise prices for these
options range from $3.66 to $15.32 per share.  These options are included in the
table above as options  granted during 1999. The Company has recorded as part of
the  purchase  price $1.7  million  relating  to the fair  value of the  options
exchanged.

For all three stock  option plans at December  31,  1999,  there were  1,478,404
shares of unissued stock reserved for issuance, of which 116,901 shares remained
available for future grants.  Options to purchase  767,788,  437,026 and 361,873
shares of common stock were  exercisable  at December  31, 1999,  1998 and 1997,
respectively.  These exercisable options had weighted average exercise prices of
$10.71, $9.91 and $8.27 at December 31, 1999, 1998 and 1997, respectively.

The Financial Accounting Standards Board issued SFAS No.123 which defines a fair
value based method of accounting for an employee stock option and similar equity
instrument  and  encourages  all entities to adopt that method of accounting for
all of their  employee  stock  compensation  plans.  However,  it also allows an
entity to continue to measure compensation cost for those plans using the method
of  accounting  prescribed  by APB 25.  Entities  electing  to  remain  with the
accounting in APB 25 must make pro forma  disclosures of net income and earnings
per share,  as if the fair value based method of accounting  defined in SFAS 123
had been adopted.

The Company has elected to account for its stock-based  compensation plans under
APB 25; however,  the Company has computed,  for pro forma disclosure  purposes,
the  value  of all  options  granted  during  1999,  1998  and  1997  using  the
Black-Scholes  options  pricing  model  as  prescribed  by SFAS  123  using  the
following weighted average assumptions for grants:

                                      F-20

<PAGE>

<TABLE>
<CAPTION>

                                                                 For the Year Ended December 31,
                                                   ------------------------------------------------------------
                                                       1999                  1998                   1997
                                                   --------------       ----------------       ----------------
<S>                                                <C>                  <C>                    <C>

Risk-free interest rate                                    6.25%                   6.0%                   6.3%
Expected dividend yield                                     0.0%                   0.0%                   0.0%
Expected lives (years)                                       7.5                    7.5                    6.9
Expected volatility                                        35.0%                  59.4%                  60.7%

</TABLE>

Using the Black-Scholes  methodology,  the total value of options granted during
1999,  1998  and  1997  was  $1.1  million,   $1.2  million  and  $1.3  million,
respectively,  which  would be  amortized  on a pro forma basis over the vesting
period of the options (typically five years). The weighted average fair value of
options granted during 1999, 1998 and 1997 was $7.52 per share,  $8.36 per share
and $11.51 per share,  respectively.  During 1999,  the Company  terminated  the
ESPP.  The number of shares  issued under the ESPP was 1,944,  22,383 and 20,646
for the years ended  December  31,  1999,  1998 and 1997,  respectively  and the
related  weighted  average  purchase  price and  weighted  average fair value of
shares  issued were $9.77 and $5.19,  respectively  for 1999,  $10.20 and $5.83,
respectively for 1998 and $13.71 and $6.55, respectively for 1997.

If  the  Company  had  accounted  for  its  stock-based  compensation  plans  in
accordance  with SFAS 123,  the  Company's  net  income and net income per share
would approximate the pro forma disclosures below:

<TABLE>

<CAPTION>

                                                           For the Year Ended December 31,
                                                        (in thousands, except per share data)
                           ------------------------------------------------------------------------------------------------
                                      1999                             1998                              1997
                           ----------------------------     ----------------------------    -------------------------------
                           As Reported      Pro Forma       As Reported      Pro Forma       As Reported       Pro Forma
                           -------------    -----------     -------------    -----------    --------------    -------------
<S>                        <C>              <C>             <C>              <C>            <C>               <C>
Net income (loss)             $(13,924)      $(14,921)           $ 3,865        $ 2,659            $4,585          $ 3,563
Net income (loss)
  per share - basic             $(2.71)        $(2.91)            $ 0.77         $ 0.53            $ 0.93           $ 0.72
Net income (loss) per
  share - diluted               $(2.71)        $(2.91)            $ 0.75         $ 0.53            $ 0.90           $ 0.71

</TABLE>

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of future amounts. Additional awards are anticipated in future years.

                                      F-21

<PAGE>

The following table summarizes  information  about stock options  outstanding at
December 31, 1999:

<TABLE>

<CAPTION>

                              Options Outstanding                                            Options Exercisable
---------------------------------------------------------------------------------    -------------------------------------
                                                 Weighted
                               Number             Average            Weighted           Number of            Weighted
  Range of Exercise             Out-             Remaining            Average             Shares              Average
   Prices Per Share          standing at        Contractual          Exercise         Exercisable at      Exercise Price
                              12/31/99         Life (years)            Price             12/31/99
-----------------------     --------------    ----------------     --------------    -----------------    ----------------
<S>                         <C>               <C>                  <C>               <C>                  <C>
          $1.00 - 4.99            125,924           2.5                   $ 1.85              120,305              $ 1.72
          $5.00 - 9.99            232,847           7.4                   $ 6.95              158,487              $ 6.89
        $10.00 - 14.99            699,154           6.8                  $ 12.32              309,218             $ 12.40
        $15.00 - 15.99            207,178           6.1                  $ 15.01              126,578             $ 15.02
        $16.00 - 20.00             86,400           6.3                  $ 19.48               43,200             $ 18.97
        $24.25 - 24.25             10,000           1.3                  $ 24.25               10,000             $ 24.25


</TABLE>

11.      SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>

<CAPTION>

QUARTER ENDED (1) (3)                              March 31,           June 30,           September 30,        December 31, 1999
(In thousands, except per share data)                1999                1999                 1999
--------------------------------------------     --------------     ---------------     ------------------     -------------------
<S>                                          <C>                <C>                 <C>                    <C>
Revenue                                      $          20,053  $          27,829   $             29,563   $              29,636
Gross profit                                            12,306             17,570                 18,000                  16,580
Net income (loss) applicable to common
   shareholders                                            799                (979)               (9,037)                 (4,707)
Net income (loss) per share - basic          $            0.16  $            (0.19) $              (1.74)  $               (0.90)
Net income (loss) per share - diluted        $            0.16  $            (0.19) $              (1.74)  $               (0.90)

--------------------------------------------     --------------     ---------------     ------------------     -------------------
QUARTER ENDED (2) (3)                              March 31,           June 30,           September 30,        December 31, 1998
(In thousands, except per share data)                1998                1998                 1998
--------------------------------------------     --------------     ---------------     ------------------     -------------------
Revenue                                      $          19,051   $         19,002    $            23,186    $             24,391
Gross profit                                            12,303             11,835                 15,413                  16,656
Net income applicable to  common
   shareholders                                          1,000                927                  1,593                     345
Net income per share - basic                 $            0.20   $           0.19    $              0.32    $               0.07
Net income per share - diluted               $            0.19   $           0.18    $              0.31    $               0.07

<FN>

(1)  The results in the third quarter of 1999 reflect  pretax  charges  totaling
     $5.2 million for the value of in- process research and development  efforts
     at the date of the ULTRADATA  acquisition and $1.2 million of other charges
     (see Notes 2 and 7). The  results  in the  second  quarter of 1999  reflect
     pretax charges  totaling $3.8 million for the value of in-process  research
     and development efforts at the date of the MECA acquisition (see Note 2).

(2)  The results in the fourth quarter of 1998 reflect  pretax charges  totaling
     $3.0 for the value of in-process  research and  development  efforts at the
     date of  acquisition  pertaining to MDI (see Note 2) and other charges (see
     Note 1 and Note 7).

(3)  The  quarterly  results  reflect  the  operations  of MDI,  MCS,  MECA  and
     ULTRADATA from the respective dates of their acquisition.

</FN>

</TABLE>

                                      F-22

<PAGE>

                    Report of Independent Public Accountants
                         on Financial Statement Schedule

To the Board of Directors and Shareholders of
CFI ProServices, Inc.
d/b/a Concentrex Incorporated

We have audited in accordance with auditing standards  generally accepted in the
United  States,   the  consolidated   financial   statements   included  in  CFI
ProServices,  Inc.'s,  dba Concentrex  Incorporated,  1999 Annual Report on Form
10-K, and have issued our report thereon dated January 28, 2000. Our audits were
made for the purpose of forming an opinion on those statements taken as a whole.
The Valuation and  Qualifying  Accounts  schedule is the  responsibility  of the
Company's  management  and is  presented  for  purposes  of  complying  with the
Securities  and  Exchange  Commission's  rules  and is  not  part  of the  basic
consolidated  financial  statements.  This  schedule  has been  subjected to the
auditing  procedures applied in our audits of the basic  consolidated  financial
statements and, in our opinion,  fairly states,  in all material  respects,  the
financial  data  required  to be set  forth  therein  in  relation  to the basic
consolidated financial statements taken as a whole.

                                                             ARTHUR ANDERSEN LLP

Portland, Oregon
January 28, 2000

                                      F-23

<PAGE>

<TABLE>
<CAPTION>

                             CFI PROSERVICES, INC.
                          dba CONCENTREX INCORPORATED
                       VALUATION AND QUALIFYING ACCOUNTS
                  Years Ended December 31, 1997, 1998 and 1999

                                                                 Additions
                                                 Balance At      Charged To                                    Balance At
                                                  Beginning      Costs And                                       End Of
                                                   Of Year        Expenses        Deductions (a)   Other (b)       Year
                                             ---------------     -----------      --------------   ---------   -----------
<S>                                          <C>                 <C>              <C>              <C>         <C>
     Year ended December 31, 1997
        Allowance for doubtful accounts and
           sales returns                             $ 1,303        $ 4,808       $ (3,231)       $     -         $ 2,880
                                             =============================================================================

        FASB 109 Valuation                           $   189        $     -       $    (17)       $     -         $   172
                                             =============================================================================

        Amortization Of Intangibles:
           Purchased software                        $ 1,229        $ 1,079       $ (2,308)       $     -         $     -
           Software development costs                  2,585          3,465         (5,315)             -             735
           Goodwill                                    1,455          1,772              -              -           3,227
                                             =============================================================================
                                                     $ 5,269        $ 6,316       $ (7,623)       $     -         $ 3,962
                                             =============================================================================

     Year ended December 31, 1998
        Allowance for doubtful accounts and
           sales returns                             $ 2,880        $ 2,005       $ (2,285)       $     -         $ 2,600
                                             =============================================================================

        FASB 109 Valuation                           $   172        $     -       $    (72)       $     -         $   100
                                             =============================================================================

        Lease Loss Accrual                           $     -        $   793       $      -        $     -         $   793
                                             =============================================================================

        Amortization Of Intangibles:
           Purchased software                        $    -         $    19       $      -        $     -         $    19
           Software development costs                    735          2,633              -              -           3,368
           Goodwill                                    3,227          2,102           (566)             -           4,763
                                             =============================================================================
                                                     $ 3,962        $ 4,754       $   (566)       $     -         $ 8,150
                                             =============================================================================

     Year ended December 31, 1999
        Allowance for doubtful accounts and
           sales returns                             $ 2,600        $ 2,097       $ (2,242)       $   813         $ 3,268
                                             =============================================================================

        FASB 109 Valuation                           $   100        $     -       $      -        $ 3,274         $ 3,374
                                             =============================================================================

        Lease Loss Accrual                           $   793        $  (309)      $   (409)       $     -         $    75
                                             =============================================================================

        Accrued Acquisition Costs                    $     -        $     -       $ (2,057)       $ 4,717         $ 2,660
                                             =============================================================================

        Amortization Of Intangibles:
           Purchased software                        $    19        $   784       $      -        $     -           $ 803
           Software development costs                  3,368          2,994         (1,801)             -           4,561
           Goodwill                                    4,763          3,059           (894)             -           6,928
                                             =============================================================================
                                                     $ 8,150        $ 6,837       $ (2,695)       $     -         $12,292
                                             =============================================================================


<FN>

(a)  Represents write-off of receivables,  fully amortized intangibles,  and, in
     1998, goodwill  associated with a 1996 acquisition.  Also includes payments
     on lease loss accrual,  accrued acquisition costs and reduction in FASB 109
     valuation account credited to income tax expense.

(b)  Includes  FASB  109  valuation  allowance  recorded  as  part  of the  1999
     acquisition of ULTRADATA  Corporation.  Also includes  accrued  acquisition
     costs and  allowance  for  doubtful  accounts  acquired as part of the 1999
     acquisitions of both MECA Software, LLC and ULTRADATA Corporation.

</FN>

</TABLE>

                                      F-24