<PAGE>

                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     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 June 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 Identification No.)
   Incorporation or Organization)

 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 July 31, 2001, there were 25,959,486 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 JUNE 30, 2001

<TABLE>
<CAPTION>

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

ITEM 1: FINANCIAL STATEMENTS

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

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
     Three and six months Ended June 30, 2001 and 2000                     4

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
     Six months ended June 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 2: CHANGES IN SECURITIES                                             14

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               14

ITEM 5: OTHER INFORMATION                                                 14

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K                                  15

SIGNATURES                                                                15
</TABLE>

                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                      JUNE 30,       DECEMBER 31,
                                                                                        2001            2000
                                                                                    ------------     -----------
                                                                                     (UNAUDITED)

<S>                                                                                   <C>             <C>
                                     ASSETS
Current assets
   Cash and cash equivalents                                                          $  41,912       $  39,890
   Receivables, less allowance of $1,297 and $1,197 respectively                         22,169          17,906
   Contracts in process                                                                   2,070           2,441
   Deferred income taxes                                                                  3,521           3,521
   Recoverable income taxes                                                               4,127           4,226
   Prepaid and other current assets                                                       1,876           1,429
   Deferred service expense                                                              12,280           9,187
                                                                                      ---------       ---------
               Total current assets                                                      87,955          78,600

Property and equipment
   Equipment                                                                             12,666          11,469
   Furniture and fixtures                                                                 2,398           2,346
   Leasehold improvements                                                                 2,909           2,866
                                                                                      ---------       ---------
                                                                                         17,973          16,681
Accumulated depreciation and amortization                                               (10,426)         (8,451)
                                                                                      ---------       ---------
   Net property and equipment                                                             7,547           8,230

Deferred service expense                                                                  4,067           3,845
Deferred income taxes                                                                       757             758
Other non-current assets                                                                  3,680           3,887
                                                                                      ---------       ---------
               Total assets                                                           $ 104,006       $  95,320
                                                                                      =========       =========

                                   LIABILITIES
Current liabilities
   Accounts payable, trade                                                                7,200           2,819
   Accrued expenses                                                                       8,537          11,933
   Deferred service revenue                                                              16,545          12,548
   Deferred license and maintenance revenues                                              8,909           6,032
                                                                                      ---------       ---------
               Total current liabilities                                                 41,191          33,332

Deferred service revenue                                                                  5,811           6,636
                                                                                      ---------       ---------
               Total liabilities                                                         47,002          39,968


                              SHAREHOLDERS' EQUITY
Common stock, stated value of $.01 per share,
   75,000 shares authorized, 25,868 shares issued and
   outstanding as of June 30, 2001 and 25,221 shares issued
   and 25,211 shares outstanding as of December 31, 2000                                    258             252
Additional paid-in capital                                                               44,093          44,431
Retained earnings                                                                        12,653          10,822
Treasury stock 0 and 10 shares respectively                                                --              (153)
                                                                                      ---------       ---------
               Total shareholders' equity                                                57,004          55,352
                                                                                      ---------       ---------
               Total liabilities and shareholders' equity                             $ 104,006       $  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             SIX MONTHS ENDED
                                                                               JUNE 30,                      JUNE 30,
                                                                        -----------------------       -----------------------
                                                                          2001           2000           2001           2000
                                                                        --------       --------       --------       --------
<S>                                                                     <C>            <C>            <C>            <C>
Revenues
   Products                                                             $  7,093       $  3,502       $ 14,515       $  6,308
   Services                                                                8,918          7,310         16,038         13,114
   Processing                                                              4,002          2,493          6,300          4,424
   Software maintenance and other                                          3,627          3,109          7,119          5,874
                                                                        --------       --------       --------       --------
     Total revenues                                                       23,640         16,414         43,972         29,720

Operating expenses
   Product development                                                     4,882          6,127          8,988         12,102
   Product support                                                         1,360          1,108          2,657          2,170
   Services                                                                6,769          3,996         12,173          8,086
   Processing                                                              3,785          1,943          5,907          3,453
   Sales and marketing                                                     3,392          3,277          7,172          6,592
   General, administrative and other                                       2,421          3,328          5,306          6,352
                                                                        --------       --------       --------       --------
      Total operating expenses                                            22,609         19,779         42,203         38,755

Earnings (loss) from operations                                            1,031         (3,365)         1,769         (9,035)
Interest income, net                                                         438            435            967            861
                                                                        --------       --------       --------       --------
Earnings (loss) before income taxes                                        1,469         (2,930)         2,736         (8,174)
Income tax provision (benefit)                                               485           (937)           903         (2,616)
                                                                        --------       --------       --------       --------
Net earnings (loss) before cumulative effect of change in
  accounting principle                                                       984         (1,993)         1,833         (5,558)
Cumulative effect of change in accounting principle                         --             --             --             (173)
                                                                        --------       --------       --------       --------
Net earnings (loss)                                                     $    984       $ (1,993)         1,833         (5,731)
                                                                        ========       ========       ========       ========

Basic earnings (loss) per average common share before
cumulative effect of change in accounting principle                     $   0.04       $  (0.08)          0.07          (0.22)

Diluted earnings (loss) per average common share before cumulative
effect of change in accounting principle                                $   0.04       $  (0.08)          0.07          (0.22)

Basic earnings (loss) per average common share                          $   0.04       $  (0.08)          0.07          (0.23)

Diluted earnings (loss) per average common share                        $   0.04       $  (0.08)          0.07          (0.23)

Weighted-average common shares outstanding                                25,661         24,938         25,490         24,774

Weighted-average common and dilutive shares outstanding                   26,545         24,938         26,192         24,774
</TABLE>


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                               SIX MONTHS ENDED
                                                                    JUNE 30,
                                                            -----------------------
                                                              2001           2000
                                                            --------       --------
<S>                                                         <C>            <C>
Cash flows from operating activities
   Net earnings (loss)                                      $  1,833       $ (5,731)
   Adjustments to reconcile net earnings loss to cash
     used by operating activities
        Depreciation and amortization                          2,259          1,832
        Stock based compensation                                --            2,783
        Deferred service revenue                               3,172         10,673
        Deferred service expense                              (3,315)        (7,843)
        Provision for doubtful accounts receivable               100           --
   Cash provided (used) by changes in
     operating assets and liabilities
        Accounts receivable                                   (4,363)        (8,308)
        Contracts in process                                     371           (856)
        Income tax refund receivable/payable                     356         (2,111)
        Prepaid and other current assets                        (445)          (760)
        Accounts payable and accrued expenses                    725          7,342
        Deferred license and maintenance revenues              2,877          1,085
                                                            --------       --------
Net cash provided (used) by operating activities               3,570         (1,894)

Cash used in investing activities
      Investments                                                (77)          --
      Proceeds from sale of fixed assets                        --               47
      Capital expenditures                                    (1,292)        (2,382)
                                                            --------       --------
Net cash used by investing activities                         (1,369)        (2,335)

Cash flows from financing activities
      Repayment of notes due on common stock purchases          --               92
      Purchase of treasury stock                                --           (1,408)
      Issuance of common stock for stock options                 823          5,243
      Principal payments under current debt                     --              (71)
      Repurchase of stock in subsidiary                       (1,002)          --
      Proceeds from equity investments                          --            2,973
                                                            --------       --------
Net cash provided (used) by financing activities                (179)         6,829
                                                            --------       --------

Net increase  in cash and cash equivalents                     2,022          2,600
Cash and cash equivalents at beginning of period              39,890         25,404
                                                            --------       --------

Cash and cash equivalents at end of period                  $ 41,912       $ 28,004
                                                            ========       ========

Supplemental cash flow information
     Interest paid                                          $   --         $      2
     Income taxes paid                                      $    660       $    381
</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 and majority 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
six months ended June 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 six months
ended June 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         SIX MONTHS ENDED
                              JUNE 30,                  JUNE 30,
                        -------------------       --------------------
                          2001         2000        2001          2000
                        -------      -------      -------      -------
<S>                     <C>          <C>          <C>          <C>
U.S. and Caribbean      $14,266      $ 8,382      $26,138      $16,687
Western Europe            5,168        5,363        9,624        8,714
Central Europe            2,799        1,989        6,286        2,946
Other                     1,407          680        1,924        1,373
                        -------      -------      -------      -------
                        $23,640      $16,414      $43,972      $29,720
                        =======      =======      =======      =======
</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:

                                     SIX MONTHS ENDED JUNE 30,
                                     -------------------------
                                       2001            2000
                                     ---------       ---------
Revenues
   Sanchez                           $  32,561       $  23,790
   e-PROFILE                            15,118           8,127
   Eliminations                         (3,707)         (2,197)
                                     ---------       ---------
   Total                                43,972          29,720
                                     =========       =========

Earnings (loss) from operations
   Sanchez                               4,812             (41)
   e-PROFILE                            (3,043)         (8,994)
                                     ---------       ---------
   Total                             $   1,769       $  (9,035)
                                     =========       =========

                                     JUNE 30,      DECEMBER 31,
                                       2001            2000
                                     ---------       ---------
Total Assets
  Sanchez                            $  94,885       $  85,267
  e-PROFILE                             41,770          35,784
  Eliminations                         (32,649)        (25,731)
                                     ---------       ---------
  Total                              $ 104,006       $  95,320
                                     =========       =========


(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       SIX MONTHS ENDED
                                              JUNE 30,                JUNE 30,
                                         -----------------       ------------------
                                          2001        2000        2001         2000
                                         ------      ------      ------      ------
<S>                                      <C>         <C>         <C>         <C>
Weighted-average shares outstanding      25,661      24,938      25,490      24,774
Dilutive effect of options                  884                     702
                                         ------      ------      ------      ------
Total common and diluted shares          26,545      24,938      26,192      24,774
                                         ======      ======      ======      ======
</TABLE>


     At June 30, 2001, potentially dilutive common stock equivalents include
options to purchase 3,990,627 shares of common stock, which were excluded
from the calculation as their effect is anti-dilutive as a result of their
exercise price. All potentially dilutive common stock equivalents were
excluded from the

                                       7
<PAGE>

calculation of net loss per share for the three and six months ended June 30,
2000 as their effect is anti-dilutive as a result of the net loss incurred
for the periods.

(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 June 30, 2001), as well as certain fees due for minimum processing
obligations. 1st Webbankdirect 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 June 30,
2001. As of this date, the Company is unable to estimate the amount of any
potential gain or loss.

                                       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 throught 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 top-tier financial services
companies to offer on-line financial services to their customers. e-PROFILE
is a majority-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 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 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
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 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 June 30, 2001, increased 44.0% to $23.6
million, compared to $16.4 million recorded for the same period in 2000. Net
income for the quarter totaled $984,000 or $0.04 per share, compared to a net
loss of ($2.0) million or ($0.08) per share for the same period last year. SAB
No. 101 resulted in the Company's accreting $4.5 million in revenue and $666,000
in pre-tax profits in the second quarter of 2001, as compared to a deferral of
$7.3 million in revenue and $2.2 million in pre-tax profits in the same period
in 2000.

     During the second quarter, e-PROFILE processing revenues continued to
grow. Processing revenues increased to $4.0 million in the second quarter, up
74 percent from $2.3 million in the first quarter of 2001. During the quarter
the Company's processing revenue generated per subscriber per month was $3.93.

     We also announced a strategic alliance with Perot systems and will begin to
jointly market an integrated customer solution set for retail banking using
Sanchez Xpress as the transaction and customer integration engine for
Perot Systems.


                                       9
<PAGE>


RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                         JUNE 30,                            JUNE 30,
                                                               ---------------------------       --------------------------
DOLLARS IN THOUSANDS                                              2001              2000            2001            2000
                                                               -----------       ---------       ----------       ---------
<S>                                                            <C>               <C>             <C>              <C>
Revenues
   Products                                                    $     7,093       $   3,502       $   14,515       $   6,308
   Services                                                          8,918           7,310           16,038          13,114
   Processing                                                        4,002           2,493            6,300           4,424
   Software maintenance and other                                    3,627           3,109            7,119           5,874
                                                               -----------       ---------       ----------       ---------
    Total revenues                                             $    23,640       $  16,414       $   43,972       $  29,720
                                                               ===========       =========        =========       =========

Percentage Relationship to Total Revenues
Revenues
   Products                                                           30.0%           21.4%            33.0%           21.2%
   Services                                                           37.7            44.5             36.5            44.1
   Processing                                                         16.9            15.2             14.3            14.9
   Software maintenance and other                                     15.4            18.9             16.2            19.8
                                                               -----------       ---------       ----------       ---------
    Total revenues                                                   100.0           100.0            100.0           100.0

Operating expenses
   Product development                                                20.7            37.3             20.4            40.7
   Product support                                                     5.8             6.8              6.0             7.3
   Services                                                           28.6            24.3             27.7            27.2
   Processing                                                         16.0            11.8             13.4            11.6
   Sales and marketing                                                14.3            20.0             16.3            22.2
   General, administrative and other                                  10.2            20.3             12.1            21.4
                                                               -----------       ---------       ----------       ---------
     Total operating expenses                                         95.6           120.5             95.9           130.4

   Earnings (loss) from operations                                     4.4           (20.5)             4.1           (30.4)
   Interest income, net                                                1.9             2.7              2.2             2.9
                                                               -----------       ---------       ----------       ---------
   Earnings (loss) before income taxes                                 6.3           (17.8)             6.3           (27.5)
   Income tax provision (benefit)                                      2.1            (5.7)             2.1            (8.8)
                                                               -----------       ---------       ----------       ---------
   Net earnings (loss) before cumulative effect
     of change in accounting principle                                 4.2           (12.1)             4.2           (18.7)
                                                               -----------       ---------       ----------       ---------
   Cumulative effect of change in accounting principle              --              --               --                (0.6)
                                                               -----------       ---------       ----------       ---------
   Net earnings (loss)                                                 4.2%          (12.1%)            4.2%          (19.3%)
                                                               ===========       =========       ==========       =========
</TABLE>

                                       10
<PAGE>

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

     REVENUES. Revenues increased $7.2 million, or 44.0%, in the second quarter
of 2001 as compared to the second quarter of 2000. Product revenue increased by
$3.6 million or 102.5% from the second quarter of 2000 to the second quarter of
2001. The increase in product revenue is primarily attributable to two new
clients in the U.S./Caribbean market and a license expansion for a European
client. Service revenue increased $1.6 million or 22.0%. 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 $1.5 million or 60.5% in the quarter ended
June 30, 2001, as compared to the same period in 2000. The increase is
primarily attributable to the increase in per account processing revenues due
to the expanded services selected by our clients. As of June 30, 2001, the
Company was processing approximately 333,000 accounts. Software maintenance
and other revenue increased by $518,000 or 16.7%, in the second quarter of
2001, due primarily to an increase in the Company's supported client base.

     PRODUCT DEVELOPMENT. Product development expenses decreased ($1.2) million,
or 20.3%, in the second quarter of 2001, 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 $2.8 million, or 69.4%, during
the second quarter of 2001. The increase was primarily due to the accreted
expenses associated with the SAB No. 101 revenue. The gross margin relative
to associated revenues was 24.1% for the second quarter of 2001, compared to
45.3% in the same period last year. The decrease is primarily attributable to
the lower margin on the accreted SAB No. 101 revenue and the continued
contribution by our third party e-PROFILE partners.

     PROCESSING. Processing expenses increased $1.8 million, or 94.8%, in the
second quarter of 2001. This increase is attributable to third party processing
fees and increased staffing. The gross margin relative to processing was 5.4% in
the second quarter of 2001 compared to 22.1% in the same quarter last year. The
5.4% margin reflects the continued investment in the processing operations in
support of our three new clients expected to publicly launch in the second
half of 2001. In addition, a greater percentage of the processing revenues
are being generated by third party partners that has a lower margin
associated with it.

     SALES AND MARKETING. Sales and marketing expenses increased by $115,000, or
3.5%, in the 2001 period due to the re-deployment of product development
resources to sales and marketing and increased sales and sales support staff.
This increase was partially offset by lower consulting fees.

     GENERAL, ADMINISTRATIVE AND OTHER. These expenses decreased by ($907,000),
or 27.3%, in 2001 primarily due to a decrease in consulting fees that was
partially offset by increased staffing.

     INCOME TAX PROVISION. Taxes in the second quarter of 2001 were 33.0% of
income before income taxes, as compared to 32.0% in the same quarter last year.

SIX MONTHS ENDED JUNE 30, 2001, COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

     REVENUES. Revenues increased $14.3 million, or 48.0%, in the first six
months of 2001 over the same period in 2000. Product revenue increased by $8.2
million or 130.1% from the first six months of 2000 to the first six months of
2001. The increase in product revenue is primarily attributable to implementing
clients in the U.S./Caribbean Market and license expansions for existing
clients. Service revenues increased $2.9 million or 22.3%. 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
$1.9 million, or 42.4% in the six months ended June 30, 2001, as compared to
the same period in 2000. The increase is primarily attributable to the
increase in per account processing revenues due to the expanded services
selected by our clients. As of June 30, 2001, the Company was processing
approximately 333,000 accounts. Software maintenance and other revenue
increased by $1.2 million, or 21.2%, in the first six months of 2001, due
primarily to an increase in the Company's supported client base and higher
sales of third-party products.

                                       11
<PAGE>

     PRODUCT DEVELOPMENT. Product development expenses decreased ($3.1) million,
or 25.7%, in the first six months of 2001, primarily due to the reduction in the
use of third party consulting fees related to product strategy and development.
Also, contributing to the decrease was 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 $487,000, or 22.4%,
for the six months ended June 30, 2001, primarily due to costs required to
support the larger converted client base.

     SERVICES. Service expenses increased by $4.1 million, or 50.5%, during the
six months ended June 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 24.1% for the
first six months of 2001, compared to 38.3% in the same period last year.

     PROCESSING. Processing expenses increased $2.5 million, or 71.1%, in the
first six 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 6.2% during the six months ended June 30,
2001, as compared to 21.9% during the same period in 2000. The 6.2% margin
reflects the continued investment in the processing operation in anticipation of
client account growth. In addition, a greater percentage of the processing
revenues are being generated by third party partners that produce lower margins
for the Company.

     SALES AND MARKETING. Sales and marketing expenses increased by $580,000, or
8.8%, in the 2001 period due to the re-deployment of product development
resources to sales and marketing and increased sales and sales support staff.
This increase was partially offset by lower consulting fees and third party
commissions.

     GENERAL, ADMINISTRATIVE AND OTHER. These expenses decreased by ($1.0)
million, or 16.5%, in 2001 primarily due to a decrease in consulting fees that
was partially offset by increased staffing.

     INCOME TAX PROVISION. Taxes in the first six months of 2001 were 33.0% of
income before income taxes, as compared to 32.0% in the first six months of
2000.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents were $41.9 million at June 30, 2001. Cash
provided by operating activities for the six months ended June 30, 2001 was $3.6
million as compared to $1.9 million used by operating activities during the same
period in 2000. This increase in cash was primarily the result of an increase in
deferred revenues, accounts payable and the results of operations. This increase
was partially offset by an increase in accounts receivable and deferred
expenses. Accounts receivable increased by $4.4 million in the first six
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.

                                       12
<PAGE>


     During the first six months of 2001, the Company used $1.4 million for
investing activities primarily related to the purchase of fixed assets due to
increased staffing and additional equipment and facilities.

     Financing activities used $179,000 of cash during the six months ended June
30, 2001 principally from the repurchase of stock in a subsidiary. This was
partially offset by the exercise of stock options and proceeds from the employee
stock purchase plan.

     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. All
contractual arrangements with international customers are denominated in U.S.
dollars.

                                       13
<PAGE>


                        SANCHEZ COMPUTER ASSOCIATES, INC.

PART II - OTHER INFORMATION

Item 2: Changes in Securities

In July 2000, the Company sold 109,980 shares of e-PROFILE common stock to a
customer for cash of $3 million which represented the fair value of the stock
based on cash transactions in the same class of stock with unrelated third-party
financial investors. The Company also issued a warrant to the customer, which
enabled the customer to purchase additional shares of e-PROFILE common stock in
the event of an e-PROFILE public offering. There was no accounting for the
warrant because there was no measurement date prior to an e-PROFILE public
offering. Under the terms of the stock purchase agreement with the investor and
the customer, they have the right to require the Company to issue shares of
common stock equal to the purchase price divided by the average market price of
the Company's common stock for 15 days prior to the anniversary of the closing.
The Company allowed the customer to exercise their conversion right in the
second quarter of 2001 whereby the Company issued 233,973 shares of its common
stock in exchange for all of the shares of e-PROFLIE common stock held by the
parties. None of the e-PROFILE loss for the six months ended June 30, 2001 was
allocated to the minority stockholders because of their conversion rights

Item 4: Submission of Matters to a Vote of Security Holders

On May 24, 2001, the Annual Meeting of Shareholders of the Company was held at
which the following matters were submitted to and the requisite number of shares
of Common Stock of the Company were voted on by the stockholders, with the
results set forth below:

a) The following persons were elected to the Board of Directors to serve as
   directors until the next annual meeting of shareholders in 2002, and until
   their respective successors are duly elected and qualified. Each person
   received the number of votes set forth next to their names below:

                       PROPOSAL I - ELECTION OF DIRECTORS

<Table>
<Caption>

                                           For                   Withheld
                                      ---------------        ------------------
<S>                                      <C>                      <C>
           Michael A. Sanchez            21,822,231               236,395
           Frank R. Sanchez              21,766,597               292,029
           Joseph F. Waterman            21,767,898               290,728
           Lawrence Chimerine            21,824,451               234,175
           Frederick J. Gronbacher       21,823,602               234,025
           Alex W. Hart                  21,824,601               234,025
           John D. Loewenberg            21,824,499               234,127
           Thomas C. Lynch               21,825,545               233,081
           James R. Stojak               21,820,702               237,927
           Gary C. Wendt                 21,822,052               236,574
</Table>



b) The shareholders approved and adopted the amendments to the 1995 Equity
   Compensation Plan ("the Plan") and as a result of the adoption of the Plan,
   the amount authorized for issuance under the Plan is 7,360,000 shares. The
   votes cast for and against and the number of abstentions are set forth below:

              PROPOSAL II - AMEND THE 1995 EQUITY COMPENSATION PLAN

<Table>
<Caption>

                                              For          Against       Abstain
                                          ------------- --------------- ----------
<S>                                         <C>           <C>             <C>
           Votes to approve the Plan        14,560,913    2,900,463       35,969
</Table>


Item 5: Other Information

a) Effective August 8, 2001, Mr. William Fenimore became a member of the board
   of directors.

During the second quarter, the Company received notice that Bank One will
integrate the bank operations of WingspanBank.com into the parent bank's
technology and operating infrastructure. As a result WingspanBank.com will
end its relationship for bank technology and operations with e-PROFILE
sometime in the fourth quarter of this year. The loss of WingspanBank.com as
a client is not expected to have a material impact on the Company's earnings
or revenues.

                                       14
<Page>

Item 6. Exhibits and reports on Form 8-K

           None

No other applicable items.

                                   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 August 14, 2001



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