<PAGE>

                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-Q

                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934.

For the quarterly period ended September 30, 2001.
                               -------------------

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934.

For the transition period from ____________________ to _______________________


                         Commission file number 0-21705
                                                -------

                        SANCHEZ COMPUTER ASSOCIATES, INC.
             -------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


            Pennsylvania                             23-2161560
   -------------------------------               ------------------
   (State or Other Jurisdiction of                (I.R.S. Employer
    Incorporation or Organization)               Identification No.)


 40 Valley Stream Parkway, Malvern, PA                 19355
----------------------------------------            ------------
(Address of Principal Executive Offices)             (Zip Code)


Registrant's Telephone Number, Including Area Code: (610) 296-8877
                                                    --------------

                                       N/A
           ----------------------------------------------------------
               Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report

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 ____
                        ----

As of October 31, 2001, there were 25,959,986 outstanding shares of the issuer's
Common Stock, no par value.



<PAGE>

                       SANCHEZ COMPUTER ASSSOCIATES, INC.
                               INDEX TO FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                        Page No.
                                                                        --------
<S>     <C>                                                             <C>
                          PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
  September 30, 2001 (Unaudited) and December 31, 2000                      3

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
  Three and nine months ended September 30, 2001 and 2000                   4

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
  Nine months ended September 30, 2001 and 2000                             5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)                      6

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS                       9

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK         13

                           PART II: OTHER INFORMATION

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K                                   14

SIGNATURES                                                                 15

</TABLE>

                                       2
<PAGE>


                        SANCHEZ COMPUTER ASSOCIATES, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                        SEPTEMBER 30,     DECEMBER 31,
                                                                           2001              2000
                                                                        -------------     ------------
                                                                        (unaudited)
                                     ASSETS
<S>                                                                     <C>               <C>
Current assets
   Cash and cash equivalents                                            $  42,603         $  39,890
   Receivables, less allowance of $1,297 and $1,197 respectively           21,121            17,906
   Contracts in process                                                     2,512             2,441
   Deferred income taxes                                                    3,522             3,521
   Recoverable income taxes                                                 2,363             4,226
   Prepaid and other current assets                                         1,327             1,429
   Deferred service expense                                                10,772             9,187
                                                                        ---------         ---------
               Total current assets                                        84,220            78,600

Property and equipment
   Equipment                                                               13,359            11,469
   Furniture and fixtures                                                   2,451             2,346
   Leasehold improvements                                                   3,050             2,866
                                                                        ---------         ---------
                                                                           18,860            16,681
Accumulated depreciation and amortization                                 (11,419)           (8,451)
                                                                        ---------         ---------
   Net property and equipment                                               7,441             8,230

Deferred service expense                                                    4,152             3,845
Deferred income taxes                                                         758               758
Other non-current assets                                                    4,065             3,887
                                                                        ---------         ---------
               Total assets                                             $ 100,636         $  95,320
                                                                        =========         =========

                               LIABILITIES
Current liabilities
   Accounts payable, trade                                              $   5,695         $   2,819
   Accrued expenses                                                         8,805            11,933
   Deferred service revenue                                                14,619            12,548
   Deferred license and maintenance revenues                                7,297             6,032
                                                                        ---------         ---------
               Total current liabilities                                   36,416            33,332
Deferred service revenue                                                    5,501             6,636
                                                                        ---------         ---------
               Total liabilities                                           41,917            39,968

                           SHAREHOLDERS' EQUITY
Common stock stated value of $.01 per share, 75,000 shares
   authorized, 25,960 shares issued and outstanding as of
   September 30, 2001 and 25,221 shares issued and 25,211
   shares outstanding as of December 31, 2000                                 260               252
Additional paid-in capital                                                 44,790            44,431
Retained earnings                                                          13,669            10,822
Treasury stock 0 and 10 shares respectively                                  --                (153)
                                                                        ---------         ---------
               Total shareholders' equity                                  58,719            55,352
                                                                        ---------         ---------
               Total liabilities and shareholders' equity               $ 100,636         $  95,320
                                                                        =========         =========
</TABLE>


                                       3
<PAGE>

                        SANCHEZ COMPUTER ASSOCIATES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                            SEPTEMBER 30,                 SEPTEMBER 30,
                                                                        ----------------------       ----------------------
                                                                          2001          2000           2001          2000
                                                                        --------      --------       --------      --------
<S>                                                                     <C>           <C>            <C>           <C>
Revenues
   Products                                                             $  4,204      $  5,096       $ 18,720      $ 11,404
   Services                                                                9,897         7,867         25,936        20,981
   Processing                                                              4,173         1,815         10,472         6,239
   Software maintenance and other                                          5,499         3,889         12,618         9,763
                                                                        --------      --------       --------      --------
     Total revenues                                                       23,773        18,667         67,746        48,387

Operating expenses
   Product development                                                     4,880         5,664         13,868        17,767
   Product support                                                         1,300         1,055          3,957         3,226
   Services                                                                7,325         5,259         19,499        13,345
   Processing                                                              3,698         1,662          9,605         5,115
   Sales and marketing                                                     3,784         2,731         10,956         9,323
   General, administrative and other                                       2,090         4,349          7,396        10,698
                                                                        --------      --------       --------      --------
      Total operating expenses                                            23,077        20,720         65,281        59,474

Earnings (loss) from operations                                              696        (2,053)         2,465       (11,087)
Interest income, net                                                         596           473          1,562         1,333
                                                                        --------      --------       --------      --------
Earnings (loss) before income taxes                                        1,292        (1,580)         4,027        (9,754)
Income tax provision (benefit)                                               277          (506)         1,180        (3,122)
                                                                        --------       --------      --------      --------
Net earnings (loss) before cumulative effect of change in
    accounting principle                                                   1,015        (1,074)         2,847        (6,632)
Cumulative effect of change in accounting principle                         --            --             --            (173)
                                                                        --------      --------       --------      --------
Net earnings (loss)                                                     $  1,015      $ (1,074)      $  2,847      $ (6,805)
                                                                        ========      ========       ========      ========

Basic earnings (loss) per average common share before cumulative
effect of change in accounting principle                                $   0.04      $  (0.04)      $   0.11      $  (0.27)

Diluted earnings (loss) per average common share before cumulative
effect of change in accounting principle                                $   0.04      $  (0.04)      $   0.11      $  (0.27)

Basic earnings (loss) per average common share                          $   0.04      $  (0.04)      $   0.11      $  (0.27)

Diluted earnings (loss) per average common share                        $   0.04      $  (0.04)      $   0.11      $  (0.27)

Weighted-average common shares outstanding                                25,937        25,006         25,631        24,774

Weighted-average common and dilutive shares outstanding                   26,658        25,006         26,353        24,774

</TABLE>


                                       4
<PAGE>

                        SANCHEZ COMPUTER ASSOCIATES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                             -----------------------
                                                               2001           2000
                                                             --------       --------
<S>                                                          <C>            <C>
Cash flows from operating activities
   Net earnings (loss)                                       $  2,847       $ (6,805)
   Adjustments to reconcile net earnings (loss) to cash
     provided (used) by operating activities
        Depreciation and amortization                           3,395          2,842
        Stock based compensation                                 --            2,600
        Deferred service revenue                                  936         15,521
        Deferred service expense                               (1,892)       (10,267)
        Provision for doubtful accounts receivable                100           --
   Cash provided (used) by changes in
     operating assets and liabilities
        Accounts receivable                                    (3,315)       (11,742)
        Contracts in process                                      (71)           398
        Income tax refund receivable/payable                    1,980         (1,937)
        Prepaid and other current assets                          102           (602)
        Accounts payable and accrued expenses                    (372)         7,021
        Deferred income taxes                                    --             (461)
        Deferred license and maintenance revenues               1,265          1,943
                                                             --------       --------
Net cash provided (used) by operating activities                4,975         (1,489)

Cash (used) by  investing activities
      Investments                                                (606)          --
      Proceeds from sale of fixed assets                         --               51
        Capital expenditures                                   (2,178)        (3,203)
                                                             --------       --------
Net cash (used) by investing activities                        (2,784)        (3,152)

Cash flows provided by financing activities
      Repayment of notes due on common stock purchases           --               92
      Purchase of treasury stock                                 --           (1,631)
      Issuance of common stock for stock options                1,524          5,983
      Principal payments under current debt                      --              (83)
      Repurchase of stock in subsidiary                        (1,002)          --
      Proceeds from equity investments                           --            5,973
                                                             --------       --------
Net cash provided  by financing activities                        522         10,334
                                                             --------       --------
Net increase in cash and cash equivalents                       2,713          5,693
Cash and cash equivalents at beginning of period               39,890         25,404
                                                             --------       --------
Cash and cash equivalents at end of period                   $ 42,603       $ 31,097
                                                             ========       ========
Supplemental cash flow information
     Interest paid                                           $   --         $      2
     Income taxes paid                                       $  1,177       $  1,077
</TABLE>


                                       5
<PAGE>

                        SANCHEZ COMPUTER ASSOCIATES, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


(A.) BASIS OF PRESENTATION

     The accompanying consolidated financial statements of Sanchez Computer
Associates, Inc. ("Sanchez" or the "Company") include the accounts of all of the
Company's wholly owned subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation. Certain prior period amounts
have been reclassified to conform with current period presentation. In the
opinion of management, the consolidated financial statements reflect all normal
and recurring adjustments which are necessary for a fair presentation of the
Company's financial position, results of operations, and cash flows as of the
dates and for the periods presented. The consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Consequently, these statements do not include all
the disclosures normally required by generally accepted accounting principles
for annual financial statements nor those normally made in the Company's Annual
Report on Form 10-K. Accordingly, reference should be made to the Company's
Annual Report on Form 10-K for additional disclosures, including a summary of
the Company's accounting policies, which have not changed. The consolidated
results of operations for the nine months ended September 30, 2001, are not
necessarily indicative of results for the full year. As of January 1, 2000, the
Company recorded a cumulative effect of a change in accounting principle of
$173,000 as a result of the modification of the company's revenue recognition
policy due to the adoption of Staff Accounting Bulletin ("SAB") No. 101. The
results of operations for the three and nine months ended September 30, 2001 and
2000 are in accordance with SAB No. 101.

(B.) CLIENT REVENUE DATA

     Revenue derived from customers in various geographic regions is as follows
(in thousands):

<TABLE>
<CAPTION>
                            THREE MONTHS ENDED             NINE MONTHS ENDED
                               SEPTEMBER 30,                 SEPTEMBER 30,
                          ---------------------         ----------------------
                           2001            2000          2001           2000
                          -------        -------        -------        -------
<S>                       <C>            <C>            <C>            <C>
U.S. and Caribbean        $17,534        $10,354        $43,672        $27,040
Western Europe              3,240          2,721         12,865         11,436
Central Europe              1,964          2,595          8,250          5,541
Other                       1,035          2,997          2,959          4,370
                          -------        -------        -------        -------
Total                     $23,773        $18,667        $67,746        $48,387
                          =======        =======        =======        =======
</TABLE>



                                       6
<PAGE>


(C.) SEGMENTS

     The Company classifies its operations in two segments: Sanchez's software
licensing business, including related services and maintenance and the e-PROFILE
outsourcing business. The Company evaluates the performance of its segments and
allocates resources to them accordingly.

     The table below summarizes the business segments in thousands:

<TABLE>
<CAPTION>
                                        NINE MONTHS ENDED SEPTEMBER 30,
                                        -------------------------------
                                            2001            2000
                                          ---------       ---------
<S>                                       <C>             <C>
     Revenues
        Sanchez                           $  48,639       $  37,124
        e-PROFILE                            24,423          15,547
        Eliminations                         (5,316)         (4,284)
                                          ---------       ---------
        Total                                67,746          48,387
                                          =========       =========

     Earnings (loss) from operations
        Sanchez                               6,408           2,329
        e-PROFILE                            (3,943)        (13,416)
                                          ---------       ---------
        Total                             $   2,465       $ (11,087)
                                          =========       =========


                                         SEPTEMBER 30,   DECEMBER 31,
                                             2001            2000
                                         -------------   ------------
     Total Assets
       Sanchez                            $  94,335       $  85,267
       e-PROFILE                             35,546          35,784
       Eliminations                         (29,245)        (25,731)
                                          ---------       ---------
       Total                              $ 100,636       $  95,320
                                          =========       =========
</TABLE>


(D.) EARNINGS PER SHARE

     Basic earnings per share has been calculated as net earnings divided by
weighted-average common shares outstanding, while diluted earnings per share has
been computed as net earnings divided by weighted-average common and diluted
shares outstanding which includes the dilutive effect of stock options and
warrants. The following table provides a reconciliation of weighted-average
common shares outstanding to weighted-average common and diluted shares
outstanding (in thousands).

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED       NINE MONTHS ENDED
                                                      SEPTEMBER 30,           SEPTEMBER 30,
                                                   -------------------      ------------------
                                                    2001         2000        2001        2000
                                                   -------      ------      ------      ------
<S>                                                 <C>         <C>         <C>         <C>
     Weighted-average shares outstanding            25,937      25,006      25,631      24,774
     Dilutive effect of options                        721                     722
                                                    ------      ------      ------      ------
     Total common and diluted shares                26,658      25,006      26,353      24,774
                                                    ======      ======      ======      ======
</TABLE>

     At September 30, 2001, potentially dilutive common stock equivalents
include options to purchase 4,036,060 shares of common stock. All potentially
dilutive common stock equivalents were excluded from the calculation of net loss
per share for the three and nine months ended September 30, 2000 as their effect
is anti-dilutive as a result of the net loss incurred for the periods.


                                       7
<PAGE>


(E.) CONTINGENCIES

     In February 2001, e-PROFILE filed for arbitration in response to
1stWebbankdirect's October 2000, termination of its processing agreement in
connection with the consolidation of its e-banking platforms. e-PROFILE is
seeking payment of all outstanding receivables from this customer ($1.4 million
at September 30, 2001), as well as certain fees due for minimum processing
obligations. 1stWebbankdirect has counterclaimed and is seeking a refund of the
implementation fees they paid for the project. The Company has not recognized
implementation revenue or direct costs related to this contract through
September 30, 2001. As of this date, the Company is unable to estimate the
amount of any potential gain or loss related to this contingency.


                                       8
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     OVERVIEW

     Sanchez is a global leader in developing and marketing scalable and
integrated software and services solutions that provide retail banking,
brokerage and customer integration for financial institutions. The Sanchez
integrated suite of products empowers financial institutions to accelerate
business transformation and achieve a competitive advantage by lowering
operating costs, reducing technology risks and improving customer management.
The Sanchez suite includes the following main products: Sanchez Profile(R),
the highly flexible, multi-currency, multi-language, customer-centric,
enterprise banking and brokerage application and transaction processor;
Sanchez Xpress(TM), a customer integration solution that connects all of an
institution's customers to any delivery channel through to any back-office
product processing system in real time; and Sanchez Webclient(TM), a
Web-based, Internet front-end processor for retail and commercial banking
applications. Sanchez also offers e-PROFILE(R), a vertical services provider
(VSP) for the financial services industry that provides integrated end-to-end
operations and technology solutions that enable financial services companies
to offer on-line financial services to their customers. e-PROFILE is a
wholly-owned subsidiary of Sanchez and maintains its headquarters in Malvern
and an operations center in Seven Fields, Pa., a suburb of Pittsburgh, Pa.
Sanchez maintains its corporate headquarters in Malvern, Pa., and runs its
international operations from Chester in the United Kingdom.

     The Company derives its revenues from product fees, service fees,
processing fees, and software maintenance and other fees. Product fees include
software license and product enhancement fees. Service fees include client
implementation-related services and consulting fees. Processing fees consist
primarily of monthly account-based fees for account maintenance and monthly
servicing, transaction fees associated with transaction volume in a given period
and origination fees in conjunction with opening new customer accounts. For
Sanchez' software license contracts, fees are typically paid in stages upon the
completion of defined deliverables or certain dates. The Company recognizes
revenue from these fees using the percentage-of-completion contract accounting
method, or where applicable, on a cash basis. Service fees are generally
recognized and billed monthly on a time and material basis. Maintenance fees are
normally billed annually in advance and recognized into revenue ratably over the
period covered. The Company's outsourced e-commerce projects generate
implementation-related service revenues for e-PROFILE, which are largely
deferred during the implementation phase along with the related costs until the
client begins processing its customer's accounts on e-PROFILE's outsourced
platform. Once a client "goes live" the deferred revenue and costs are amortized
over the expected life of the processing arrangement. In lieu of up-front,
one-time license fees, e-PROFILE contracts typically generate on-going
processing fees, which include license and maintenance charges for Sanchez'
software on a per account/per month basis over the life of the processing
contract after the client "goes live" with the solution. In addition, these
projects generate on-going processing fee related services revenue for
e-PROFILE. Under this model, as a client institution's e-commerce account base
grows, Sanchez increases its revenue stream.

     HIGHLIGHTS

     Revenues for the quarter ended September 30, 2001, increased 27.4% to $23.8
million, compared to $18.7 million recorded for the same period in 2000. Net
income for the quarter totaled $1.0 million or $0.04 per share, compared to a
net loss of ($1.1) million or ($0.04) per share for the same period last year.
Staff Accounting Bulletin No. 101 ("SAB No. 1") resulted in a net accretion of
$2.2 million in revenue and $813,000 in pre-tax profits in the third quarter
of 2001, as compared to a net deferral of $4.8 million in revenue and
$2.4 million in pre-tax profits in the same period in 2000.

     During the third quarter, e-PROFILE processing revenues were up 130%
from the same period a year ago. The approximate 383,000 active processing
accounts as of September 30, 2001, on the platform represents a 16% increase
over the second quarter 2001. During the quarter the Company's average
processing revenue generated per subscriber per month was $3.45. On a
standalone basis, e-PROFILE revenues were $9.3 million this quarter as
compared to $7.4 million for the same period a year ago. The quarterly
operating loss for e-Profile on a stand-alone basis continues to decrease.
For the third quarter of 2001 the operating loss on a stand-alone basis was
$900,000 as compared to a $4.7 million operating loss for the same period a
year ago.

                                       9
<PAGE>

     The Company's cash position attained a new all time high of $42.6 million
at the end of the third quarter of 2001. As of September 30, 2001, the total SAB
101 deferred revenue on the balance sheet was $20.1 million and the net deferred
pre-tax income was $5.2 million.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, selected
statement of operations data:



<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                   SEPTEMBER 30,                   SEPTEMBER 30,
                                                            -------------------------        -------------------------
   DOLLARS IN THOUSANDS                                       2001            2000             2001            2000
                                                            ---------       ---------        ---------       ---------
<S>                                                         <C>             <C>              <C>             <C>
Revenues
   Products                                                 $   4,204       $   5,096        $  18,720       $  11,404
   Services                                                     9,897           7,867           25,936          20,981
   Processing                                                   4,173           1,815           10,472           6,239
   Software maintenance and other                               5,499           3,889           12,618           9,763
                                                            ---------       ---------        ---------       ---------
   Total revenues                                           $  23,773       $  18,667        $  67,746       $  48,387
                                                            =========       =========        =========       =========

Percentage Relationship to Total Revenues
Revenues
   Products                                                      17.7%           27.3%            27.6%           23.6%
   Services                                                      41.6            42.2             38.3            43.3
   Processing                                                    17.6             9.7             15.5            12.9
   Software maintenance and other                                23.1            20.8             18.6            20.2
                                                            ---------       ---------        ---------       ---------
   Total revenues                                               100.0           100.0            100.0           100.0

Operating expenses
   Product development                                           20.5            30.3             20.5            36.7
   Product support                                                5.5             5.7              5.8             6.7
   Services                                                      30.8            28.2             28.8            27.6
   Processing                                                    15.6             8.9             14.2            10.5
   Sales and marketing                                           15.9            14.6             16.2            19.3
   General, administrative and other                              8.8            23.2             10.9            22.1
                                                            ---------       ---------        ---------       ---------
   Total operating expenses                                      97.1           110.9             96.4           122.9

   Earnings (loss) from operations                                2.9           (10.9)             3.6           (22.9)
   Interest income, net                                           2.5             2.5              2.3             2.8
                                                            ---------       ---------        ---------       ---------
   Earnings (loss) before income taxes                            5.4            (8.4)             5.9           (20.1)
   Income tax provision (benefit)                                 1.2            (2.7)             1.7            (6.5)
                                                            ---------       ---------        ---------       ---------
   Net earnings (loss) before cumulative effect
    of change in accounting principle                             4.2            (5.7)             4.2           (13.6)
                                                            ---------       ---------        ---------       ---------
   Cumulative effect of change in accounting principle           --              --               --              (0.4)
                                                            ---------       ---------        ---------       ---------
   Net earnings (loss)                                            4.2%           (5.7%)            4.2%          (14.0%)
                                                            =========       =========        =========       =========
</TABLE>


                                       10
<PAGE>


THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2000

     REVENUES. Revenues increased $5.1 million, or 27.4%, in the third quarter
of 2001 as compared to the third quarter of 2000. Product revenue decreased by
($892,000) or 17.5% from the third quarter of 2000 to the third quarter of 2001.
The decrease in product revenue is primarily attributable to recent economic and
political events that temporarily interrupted the Company's ability to close
forecasted business in the third quarter. Service revenue increased $2.0 million
or 25.8%. Most of the service growth is attributable to the accretion of SAB No.
101 revenue from a number of clients going live on our outsourcing solution and
services revenues associated with implementation support in our software
application business. Processing revenues increased by $2.4 million or 130% in
the quarter ended September 30, 2001, as compared to the same period in 2000.
The increase is primarily attributable to the increase in the number of clients
that have gone live on our processing platform, as well as the increase in per
account processing revenues due to the expanded services selected by our
clients. As of September 30, 2001, the Company was processing approximately
383,000 accounts. Software maintenance and other revenue increased by $1.6
million or 41.4%, in the third quarter of 2001. This increase reflects a
one-time settlement reached with a former customer pertaining to disputed
maintenance charges as well as an increase in maintenance fees from a larger
installed customer base.

     PRODUCT DEVELOPMENT. Product development expenses decreased ($784,000), or
13.8%, in the third quarter of 2001 as compared to the same period in 2000,
primarily due to the creation of a product management group that includes a
number of employees previously assigned to the development function. This newly
created organization, a portion of which is allocated to sales and marketing, is
responsible for managing all facets of our individual product lines, managing
product profitability and providing technical sales support to our internal and
partner sales organizations. Also contributing to this decrease was the
allocation of costs from product development to other cost centers to reflect
the product development contributions to various revenue sources.

     SERVICES. Service expenses increased by $2.1 million, or 39.3%, during the
third quarter of 2001 compared to the third quarter if 2000. The increase was
primarily due to the accreted expenses associated with the SAB No. 101 revenue.
The gross margin relative to associated revenues was 26.0% for the third quarter
of 2001, compared to 33.2% in the same period last year. The decrease is
primarily attributable to the lower margin on the accreted SAB No. 101 revenue
and continued contribution by our third party e-PROFILE partners.

     PROCESSING. Processing expenses increased $2.0 million, or 123%, in the
third quarter of 2001. This increase is attributable to third party processing
fees and increased staffing needed to provide for the increase in processing
activity created by the additional clients that have gone live. The gross margin
relative to processing was 11.4% in the third quarter of 2001 compared to 8.4%
in the same quarter last year. The 11.4% margin in the third quarter of 2001
is reflective of the efficiencies beginning to be realized from processing a
larger account base. The Company is targeting a continued increase in this
margin going forward; however this business line is still in its early stages
and therefore subject to some variability.

     SALES AND MARKETING. Sales and marketing expenses increased by $1.1
million, or 38.6%, in the 2001 period due to the re-deployment of certain
product development resources to the product management function which is
included in sales and marketing and increased sales and sales support staff.
In addition, Sanchez significantly increased its level of external marketing
expenditures in an effort to create a greater market awareness of the Company's
multi product offerings for the financial services industry. These increases
were partially offset by lower consulting fees.

     GENERAL, ADMINISTRATIVE AND OTHER. These expenses decreased by ($2.3)
million, or 51.9%, in 2001. Expenses in this category were high in the 2000
period due to the costs associated with the sale of third-party products, the
expense of IPO costs and bad debt expense. Other costs in this category remained
in line with our historical trends.

     INCOME TAX PROVISION. Taxes in the third quarter of 2001 were 21.4% of
earnings before income taxes, as compared to 32.0% in the same quarter last
year. The decrease in rate was due to a better than expected benefit derived
from our Foreign Sales Corporation upon the filing of our final 2000 tax return.

NINE MONTHS ENDED SEPTEMBER 30, 2001, COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 2000

     REVENUES. Revenues increased $19.4 million, or 40%, in the first nine
months of 2001 over the same period in 2000. Product revenue increased by $7.3
million or 64.2% from the first nine months of 2000 to the first nine months of
2001. The increase in product revenue is primarily attributable to license
recognition from implementing clients in the U.S./Caribbean


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<PAGE>

market and license expansions for existing clients. Service revenues
increased $5.0 million or 23.6%. Most of the service growth is attributable
to the increased levels of Sanchez and e-PROFILE activity associated with
e-banking projects. Processing revenues increased by $4.2 million, or 67.8%,
in the nine months ended September 30, 2001, as compared to the same period
in 2000. The increase is primarily attributable to the increase in the number
of clients that have gone live on our processing platform, as well as the
increase in per account processing revenues due to the expanded services
selected by our clients.  As of September 30, 2001, the Company was
processing approximately 383,000 accounts. Software maintenance and other
revenue increased by $2.9 million, or 29.2%, in the first nine months of
2001, due primarily to an increase in the Company's supported client base and
higher sales of third-party products and a one-time settlement reached with a
former customer pertaining to disputed maintenance charges.

     PRODUCT DEVELOPMENT. Product development expenses decreased ($3.9)
million, or 21.9%, in the first nine months of 2001 compared to the first
nine months of 2000. This decrease is primarily attributable to the creation
of a product management group that includes a number of employees previously
assigned to the development function. This newly created organization, a
portion of which is allocated to sales and marketing, is responsible for
managing all facets of our individual product lines, managing product
profitability and providing technical sales support to our internal and
partner sales organizations.

     PRODUCT SUPPORT. Product support expenses increased by $731,000, or 22.7%,
for the nine months ended September 30, 2001, as compared to the same period
last year. This increase was primarily due to costs required to support the
larger converted client base.

     SERVICES. Service expenses increased by $6.2 million, or 46.1%, during
the nine months ended September 30, 2001, as compared to the same period in
2000. The increase was primarily due to the accreted expenses associated with
the SAB No. 101 revenue. The gross margin relative to associated revenues was
24.8% for the first nine months of 2001, compared to 36.4% in the same period
last year. The decrease in margin is primarily attributable to the lower
margin on the accreted SAB No. 101 revenue and continued contribution by our
third party e-PROFILE partners.

     PROCESSING. Processing expenses increased $4.5 million, or 87.8%, in the
first nine months of 2001, as compared to the same period in 2000. This increase
is attributable to third party processing fees and increased staffing. The gross
margin relative to processing was 8.3% during the nine months ended September
30, 2001, as compared to 18.0% during the same period in 2000. The 8.3% margin
reflects the continued investment in the processing operation in anticipation of
client account growth.

     SALES AND MARKETING. Sales and marketing expenses increased by $1.6
million, or 17.5%, in the 2001 period due to the re-deployment of product
development resources to sales and marketing and increased sales and sales
support staff. In addition, the Company significantly increased its level of
external marketing expenditures in an effort to create a greater market
awareness of the Company's multi product offerings for the financial services
industry. These increases were partially offset by lower consulting fees and
third party commissions.

     GENERAL, ADMINISTRATIVE AND OTHER. These expenses decreased by ($3.3)
million, or 30.9%, in 2001 primarily due to a decrease in consulting fees, costs
associated with the sale of third-party products, the write-off of previously
capitalized IPO costs, and lower incentive compensation.

     INCOME TAX PROVISION. Taxes in the first nine months of 2001 were 29.3% of
earnings before income taxes, as compared to 32.0% in the first nine months of
2000. The decrease in rate was due to a better than expected benefit derived
from our Foreign Sales Corporation upon filing our 2000 tax return.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents were $42.6 million at September 30, 2001. Cash
provided by operating activities for the nine months ended September 30, 2001,
was $5.0 million as compared to $1.5 million used by operating activities during
the same period in 2000. This increase in cash was primarily the result of the
earnings from operations, the receipt of an income tax refund and an increase in
deferred revenues. This increase was partially offset by an increase in accounts
receivable and deferred expenses. Accounts receivable increased by $3.3 million
in the first nine months of 2001 primarily as a result of increased license,
processing and maintenance related billings. The Company continues to expect a
certain amount of variability in the payment timing for major contract
milestones, which will impact cash flow from operations during any given period.

     During the first nine months of 2001, the Company used $2.8 million for
investing activities primarily related to the


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<PAGE>

purchase of fixed assets due to increased staffing and additional equipment and
facilities.

     Financing activities contributed $522,000 of cash during the nine months
ended September 30, 2001, principally from the exercise of stock options and the
proceeds from the employee stock purchase plan. This was partially offset by the
re-purchase of stock in a subsidiary.

     In April of 2001, the Company agreed to commit up to $10 million of
capital contributions to a newly formed venture fund that invests in early
stage technology infrastructure companies whose products and services can be
utilized by financial services institutions. To date, the Company has
invested $1.2 million in the fund. The Company currently anticipates that
cash generated from operations and existing cash balances will be sufficient
to satisfy its operating and capital cash needs for the foreseeable future
and at a minimum through the next year. Should the Company's business expand
more rapidly than expected, the Company believes that additional capital, if
necessary, would be available to fund such operating and capital requirements.

     The Company believes that its business is generally not seasonal;
however, the Company has historically experienced, and can be expected to
continue to experience, a certain degree of variability in its quarterly
revenue, earnings and cash flow patterns. This variability is typically
driven by significant events, which directly impact the recognition and
billing of project-related revenues. Examples of such events include the
timing of new business contract closings and the initiation of product and
service fee revenue recognition, one-time payments from existing clients
relative to license expansion rights (required to process a greater number of
customer accounts or expand the number of permitted users) and completion of
implementation project roll-outs and the related revenue recognition. Because
a high percentage of the Company's expenses are relatively fixed, a variation
in the timing of the initiation or the completion of client projects,
particularly at or near the end of any quarter, can cause significant
variations in operating results from quarter to quarter. The Company believes
that over the course of time the ongoing monthly revenue stream associated
with the e-PROFILE outsourcing alternative will contribute toward more
predictable quarter-to-quarter revenues.

FORWARD-LOOKING STATEMENTS

     This Management's Discussion and Analysis contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including, but not limited
to, statements concerning the Company's revenues, expenses and earnings, future
profitability, which have been derived from its operating budgets and forecasts
which are based on detailed assumptions about many important factors. The words
"anticipate," "estimate," "expect," "intend," "plan," "project" and variations
of these words and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties. Actual
outcomes could differ materially from those expressed in any such
forward-looking statement due to a variety of factors in addition to those
specifically identified above. These factors include, but are not limited to,
the demand for products and services in the financial services industry,
competition among software and technology companies serving that industry, the
timing of new contract closings, potential delays in the implementation of
products and services, the success of the Company's e-PROFILE business model,
the extent to which the Internet will be used for financial services and
products, the development of the top-tier and direct banking markets, market
acceptance of the Company's products and services within these markets, the
Company's ability to protect its intellectual property rights, the potential
adverse impact of security breaches, and the Company's ability to continue to
improve its products and services.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

     The Company's exposure to market risk for changes in interest rates relate
primarily to the Company's cash equivalents. The Company does not have any
derivative financial instruments in its portfolio. The Company is averse to
principal loss and ensures the safety and preservation of its invested funds by
limiting default risk, market risk and reinvestment risk. The Company does not
expect any material loss with respect to its cash equivalents.

FOREIGN CURRENCY RISK

     The Company does not use foreign exchange forward contracts. Substantially
all contractual arrangements with international customers are denominated in
U.S. dollars.

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<PAGE>


                        SANCHEZ COMPUTER ASSOCIATES, INC.

PART II - OTHER INFORMATION

Item 6: Exhibits and reports on Form 8-K

     None

No other applicable items.



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<PAGE>


                                   SIGNATURES

Pursuant to the requirements 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.

                                       SANCHEZ COMPUTER ASSOCIATES, INC.


                                       /s/ Todd A. Pittman
                                       --------------------------
                                       Todd A. Pittman
                                       Senior Vice President and
                                       Chief Financial Officer

Date November 14, 2001


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