<PAGE>   1

================================================================================
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                  FORM 10-Q/A
                                Amendment No. 1

(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, 1996

[ ]        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 0-20034

                          BROADWAY & SEYMOUR, INC.
           (Exact name of registrant as specified in its charter)


                DELAWARE                                    41-1522214
                --------                                    ----------
    (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                     Identification No.)

         128 SOUTH TRYON STREET
       CHARLOTTE, NORTH CAROLINA                              28202
       -------------------------                              -----
(Address of principal executive offices)                    (Zip code)

                               (704) 372-4281
                               --------------
            (Registrant's telephone number, including area code)




      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        Common Stock, $.01 par value
                              (Title of class)




     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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, 1996, 8,942,391 shares of Common Stock, $.01 par value,
were outstanding.




--------------------------------------------------------------------------------
                                  Page 1 of 16


<PAGE>   2



                            BROADWAY & SEYMOUR, INC.
                               TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                PAGE      
                                                                               NUMBER     
                                                                               ------     
<S>                                                                            <C>        
PART I  FINANCIAL INFORMATION:                                                            
                                                                                          
Item 1. Financial Statements                                                             
                                                                                          
        Consolidated Balance Sheet -                                                      
            September 30, 1996 and December 31, 1995                            3         
                                                                                          
        Consolidated Statement of Operations -                                            
            Three and nine months ended September 30, 1996 and                            
             September 30, 1995                                                 4         
                                                                                          
        Consolidated Statement of Cash Flows -                                            
            Nine months ended September 30, 1996 and                                      
             September 30, 1995                                                 5         
                                                                                          
        Notes to Consolidated Financial Statements                            6 - 8     
                                                                                          
Item 2. Management's Discussion and Analysis of                                     
                Financial Condition and Results of Operations                 9 - 15    
                                                                                          
     SIGNATURE                                                                    16
</TABLE>


                          ____________________________

PRODUCTS MENTIONED IN THIS REPORT ARE USED FOR IDENTIFICATION PURPOSES ONLY AND
MAY BE TRADE NAMES OR TRADEMARKS OF BROADWAY & SEYMOUR, INC., ITS SUBSIDIARIES
OR THIRD PARTIES.
                          ____________________________



                                     - 2 -

<PAGE>   3


                            BROADWAY & SEYMOUR, INC.
                           CONSOLIDATED BALANCE SHEET
                       (In thousands, except share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                     Sept. 30,  Dec. 31,
                                                                       1996       1995
                                                                      -------    -------
<S>                                                                   <C>        <C>
Assets
Current assets:
    Cash and cash equivalents                                         $ 2,613    $ 2,053
    Receivables                                                        21,363     28,233
    Income tax refund receivable                                                   2,100
    Inventories                                                         2,144        417
    Deferred income taxes                                               5,697      4,934
    Other current assets                                                  922      1,381
                                                                      -------    -------
        Total current assets                                           32,739     39,118
Property and equipment                                                  7,651      9,299
Software costs                                                          7,029      9,865
Intangible assets                                                      19,756     24,578
Other assets                                                              301        385
                                                                      -------    -------
                                                                      $67,476    $83,245
                                                                      =======    =======

Liabilities and Stockholders' Equity
Current liabilities:
    Notes payable and current portion of long-term debt               $   306    $ 6,263
    Accounts payable-trade                                              7,412      6,408
    Accrued compensation                                                2,030      2,796
    Estimated liabilities for contract losses                           3,347      5,246
    Other accrued liabilities                                           5,593      5,079
    Deferred revenue                                                    8,127     12,561
    Income taxes payable                                                1,830        275
                                                                      -------    -------
        Total current liabilities                                      28,645     38,628
                                                                      -------    -------
Long-term debt                                                            306      1,327
                                                                      -------    -------
Deferred income taxes                                                   7,096      7,096
                                                                      -------    -------
Deferred revenue and other liabilities                                    467      3,757
                                                                      -------    -------

Stockholders' equity:
    Common stock, $.01 par value; Authorized 20,000,000 shares;
       Issued 8,976,276 shares and 8,801,016 shares, respectively          90         88
    Paid-in capital                                                    36,198     34,277
    Accumulated deficit                                                (4,834)    (1,436)
                                                                      -------    -------
                                                                       31,454     32,929

    Less treasury stock, at cost, 38,552 shares                          (492)      (492)
                                                                      -------    -------
                                                                       30,962     32,437
                                                                      -------    -------
                                                                      $67,476    $83,245
                                                                      =======    =======
</TABLE>


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




                                    - 3 -

<PAGE>   4


                           BROADWAY & SEYMOUR, INC.
                     CONSOLIDATED STATEMENT OF OPERATIONS

                    (In thousands, except per share data)

                                 (Unaudited)

<TABLE>
<CAPTION>
                                                        Three months ended                    Nine months ended 
                                                      Sept 30,     Sept 30,                Sept 30,      Sept 30,
                                                        1996         1995                    1996          1995
                                                      -------      -------                 -------       ------- 
<S>                                                   <C>          <C>                     <C>           <C>
Net Revenue                                           $19,479      $33,151                 $67,836       $98,353
                                                      -------      -------                 -------       ------- 

Operating Expenses:                                                                                                 
 Cost of Revenue                                       17,641       20,020                  54,608        63,972
 Research and development                               1,376        1,860                   4,849         4,622    
 Sales and marketing                                    2,514        3,400                   9,022        11,919
 General and administrative                             2,351        3,070                   7,475         7,667
 Restructuring and impairment charges                   2,350                                2,145          
                                                      -------      -------                 -------       -------       
        Total operating expenses                       26,232       28,350                  78,099        88,180
                                                      -------      -------                 -------       -------     
Operating income (loss)                                (6,753)       4,801                 (10,263)       10,173

Gain (loss) on disposition of 
  non-strategic business units                           (430)                               7,843
Interest income                                            57           26                     117            78
Interest expense                                          (22)        (115)                   (334)         (395)
                                                      -------      -------                 -------       -------     
Income (loss) before provision for income taxes        (7,148)       4,712                  (2,637)        9,856

Income tax benefit (provision)                          2,343       (2,205)                   (761)       (4,535)
                                                      -------      -------                 -------       -------     
Net income (loss)                                    ($ 4,805)     $ 2,507                ($ 3,398)      $ 5,321
                                                      =======      =======                 =======       =======    

Weighted average common and common 
 equivalent shares outstanding                          8,937        9,226                   8,903         9,026

Income (loss) per common and common 
 equivalent share                                    ($  0.54)     $  0.27                ($  0.38)      $  0.59
                                                      =======      =======                 =======       =======    
</TABLE>                                                                       

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



                                    - 4 -
<PAGE>   5


                            BROADWAY & SEYMOUR, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Nine months ended
                                                                               Sept. 30,        Sept. 30,
                                                                                 1996             1995
                                                                                -------          ------
<S>                                                                             <C>              <C>
Cash flows from operating activities:
    Net income (loss)                                                           ($3,398)         $5,321
    Adjustments to reconcile net income (loss) to net cash
     used by operating activities:
       Depreciation and amortization                                              7,310           7,666
       Deferred income taxes                                                       (763)             (8)
       Restructuring and impairment charges                                       2,145
       Gain on disposition of non-strategic business units                       (7,843)
       Loss on disposal of fixed assets                                              58
       Change in assets and liabilities excluding effects of
          businesses acquired and divestitures:
                Receivables                                                       2,903          (6,559)
                Inventories                                                      (1,757)            220
                Other assets                                                        459            (727)
                Accounts payable - trade                                          1,141          (4,693)
                Accrued compensation                                               (587)           (748)
                Estimated liabilities for contract losses                        (1,899)
                Other liabilities                                                (4,742)             66
                Deferred revenue and customer deposits                           (1,838)         (1,420)
                Income taxes                                                      3,726            (844)
                                                                                -------          ------
        Net cash used by operating activities                                    (5,085)         (1,726)
                                                                                -------          ------
Cash flows from investing activities:
    Purchase of property and equipment                                           (2,538)         (5,365)
    Investment in software costs                                                 (1,110)         (1,907)
    Net proceeds from sale of property and equipment and other dispositions      16,476           2,000
    Cash used in business acquisitions                                             (864)         (1,586)
                                                                                -------          ------
        Net cash provided (used) by investing activities                         11,964          (6,858)
                                                                                -------          ------
Cash flows from financing activities:
    Net borrowings (payments) under credit facility                              (5,217)          4,506
    Proceeds from issuance of notes                                                 864             314
    Payments of notes payable and long-term debt                                 (2,625)           (644)
    Proceeds from issuance of common stock                                          659           3,702
                                                                                -------          ------
        Net cash provided (used) by financing activities                         (6,319)          7,878
                                                                                -------          ------
Net increase (decrease) in cash and cash equivalents                                560            (706)
Cash and cash equivalents, beginning of period                                    2,053           1,639
                                                                                -------          ------
Cash and cash equivalents, end of period                                         $2,613            $933
                                                                                =======          ======
</TABLE>

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




                                    - 5 -
<PAGE>   6



                            BROADWAY & SEYMOUR, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION:

     The consolidated financial statements of the Company include all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary for a fair presentation of financial position as of September 30,
1996 and results of operations and cash flows for the interim periods
presented.  The results of operations for the three and nine months ended
September 30, 1996 are not necessarily indicative of the results to be expected
for the entire year.

     Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended December 31, 1995 as reported
by the Company in its Annual Report on Form 10-K.

     Management makes estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reported period.  Actual results could differ
from those estimates.  The more significant estimates affecting the Company's
financial statements relate to revenue recognition and loss accruals for
long-term contracts, allowance for uncollectible receivables and useful lives
used in depreciating property and equipment and amortizing capitalized software
products and intangible assets.

     Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121 ("SFAS 121"), "Accounting for the Impairment of
Long-lived assets and for Long-lived Assets to be Disposed of."  This statement
addresses the accounting for the impairment, if any, of the Company's
long-lived assets, identifiable intangibles and goodwill relating to those
assets.  SFAS 121 requires that the Company review such assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
of the asset may not be recoverable.  In such instances, the Company will
perform a test of impairment which compares the carrying amount of the asset
with the estimated undiscounted future cash flows to be generated from use of
the asset, including its ultimate disposition.  If the estimated future cash
flows are less than the carrying amount of the asset, the asset is considered
to be impaired and the carrying amount of the asset will be reduced to its fair
value through the recognition of an impairment loss.  The asset, at its new
carrying value, will be depreciated or amortized over its remaining useful
life.  Adoption of this standard did not have a material impact on the
consolidated financial statements of the Company.

     Certain prior year amounts have been reclassified to conform with current
year presentation.

NOTE 2 - SIGNIFICANT TRANSACTIONS:

     During the second half of 1995, the Company implemented a new operating
model called Futures '96 and refocused its strategic direction on core
operations and internal product development rather than growth through product
acquisitions.  As a part of its focus on core operations, the Company initiated
a plan to sell or discontinue certain non-strategic business units.

     On May 15, 1996, the Company  sold substantially all the assets, subject
to certain related liabilities, of its asset management business, including the
Company's AMtrust and TrustProcessor software products, to Fidelity Investments
Institutional Services Company, Inc. ("Fidelity"), pursuant to an Asset
Purchase Agreement.  In connection therewith,  the Company and Fidelity entered
into various ancillary agreements which relate to the Company licensing to
Fidelity certain other software, the Company providing to Fidelity certain
software maintenance and transition services and Fidelity contracting with the
Company for certain minimum systems integration work in the twenty-four months
following the closing.  The aggregate consideration to be paid to the Company
in connection with these transactions is approximately $29.0 million, of which
approximately $23.5 million was paid at closing for the net assets and
licensing of certain software and approximately $5.5 million is scheduled to be
paid over the twenty-four months following the closing for certain software
maintenance, training, transition services and professional services.


                                     - 6 -

<PAGE>   7




     On September 1, 1995, the Company transferred a contract for services
provided to International Business Machines Corporation ("IBM") to another
services provider. Prior to transfer, services provided under this contract
contributed approximately $1.9 million of revenue and incurred costs of $1.6
million.

     On June 30, 1995, the Company transferred certain assets, subject to
certain related liabilities, of its community banking business, to a newly
formed subsidiary, Liberty Software, Inc. ("Liberty"), and simultaneously
therewith sold the common stock of Liberty to Jack Henry & Associates, Inc.
("Jack Henry").  In connection with the sale, the Company agreed to provide
certain services and license certain software to Liberty.  For the three month
and nine month periods ended September 30, 1995, Liberty contributed revenue of
$5.5 million and $14.1 million, respectively.  All of the $5.5 million of
revenue contributed in the third quarter of 1995 and $4.0 million of revenue
contributed in the first half of 1995 is software license revenue against which
the Company incurred no significant expense.  During the first six months of
1996, the Company recognized approximately $.5 million of revenue related to
the completion of support and maintenance services against which the Company
incurred no significant expense.

     Under the maintenance provisions of a Software License Agreement executed
with Medaphis Corporation ("Medaphis") on December 30, 1994, Medaphis paid $6.8
million to the Company.  The Company recognized $3.0 million and $3.8 million
received under this agreement as services revenue for the three months ended
March 31, 1995 and June 30, 1995, respectively.  The Company incurred no
significant expenses associated with such maintenance services.


NOTE 3 - RECEIVABLES:

     Receivables at September 30, 1996 and December 31, 1995 were as follows:

<TABLE>
<CAPTION>

                                                                              Sept. 30,                   Dec. 31,
                                                                                 1996                       1995
                                                                              ---------                  --------
                                                                                          (In thousands)     
     <S>                                                                      <C>                        <C>
     Trade                                                                    $  18,409                  $ 24,752
     Unbilled                                                                     2,314                     3,809
     Other                                                                        1,565                       613 
                                                                              ---------                  --------       
                                                                                 22,288                    29,174
     Less - Allowance for doubtful accounts                                        (925)                     (941)
                                                                              ---------                  --------       
                                                                              $  21,363                  $ 28,233
                                                                              =========                  ========  
</TABLE>

NOTE 4 - SOFTWARE COSTS:                                                   
                                                                           
     The Company capitalizes the costs of developing software to be sold or
leased, including costs of product enhancements that improve the marketability
of the original product or extend its life.  These costs are incurred after   
technological feasibility is established and prior to the availability of the 
software for general release.  During the three months ended September 30, 1996
and September 30, 1995, approximately $.5 million and $.2 million of software
development costs were capitalized, respectively, and during the nine months
ended September 30, 1996 and September 30, 1995, $1.1 million and $1.7 million
of software development costs were capitalized, respectively.  Software costs
in the accompanying balance sheet also include the cost of purchased software.
Software costs are generally amortized over the estimated economic lives of the
products, up to a maximum of six years.


<TABLE>
<CAPTION>                                                                                                                       
                                                                               Sept. 30,                  Dec. 31,                 
                                                                                 1996                      1995                   
                                                                              ---------                  --------                  
                                                                                          (In thousands)                           
     <S>                                                                      <C>                        <C>
     Software costs                                                           $ 14,951                   $ 17,360                  
     Less - Accumulated amortization                                            (7,922)                    (7,495)                 
                                                                              --------                   --------                  
                                                                              $  7,029                   $  9,865                  
                                                                              ========                   ========                  
</TABLE>

                                     - 7 -

<PAGE>   8



NOTE 5 - INTANGIBLE ASSETS:

     Intangible assets at September 30, 1996 and December 31, 1995 were as
follows:

<TABLE>
<CAPTION>
                                                                  Sept. 30,            Dec. 31,
                                                                    1996                1995
                                                                  -------              -------
                                                                        (In thousands)
<S>                                                               <C>                  <C>
Excess of cost over fair value of assets acquired                 $15,358              $18,334
Customer lists and maintenance contracts                            9,921               10,170
Assembled workforce                                                 3,900                4,400
Non-competition agreements                                            313                  313
Trade names and other                                                 200                  228
                                                                  -------              -------
                                                                   29,692               33,445

Less - Accumulated amortization                                    (9,936)              (8,867)
                                                                  -------              -------
                                                                  $19,756              $24,578
                                                                  =======              =======
</TABLE>



     Intangible assets are amortized using the straight-line method over their
estimated useful lives ranging from 5 to 10 years.

NOTE 6 - DEBT:

     The Company's credit facility was repaid during the second quarter of 1996
and expired on May 31, 1996.  The Company is in negotiation for a bank line of
credit.

NOTE 7 - RESTRUCTURING CHARGES:

     During the fourth quarter of 1995, the Company recorded a restructuring
accrual of approximately $1.5 million that consisted of approximately $1.0
million for the consolidation of certain facilities expected to be subleased
and approximately $.5 million for employee severance costs.  During the first
quarter of 1996, the Company revised its estimate of the remaining costs to
complete the restructuring downward by $.2 million.  During the nine months
ended September 30, 1996, the Company utilized cash of approximately $.8
million to satisfy obligations related to these reserves.  The reserve balance
was approximately $.5 million at September 30, 1996.

     In August 1996,  the Company developed a plan to close National Pension
Alliance ("NPA"), a joint venture partnership of which Corbel/NPA, Inc.
("Corbel/NPA"), a wholly owned subsidiary of Corbel, is a 75% general partner.
Following a transition period for NPA customers, the operations of NPA will
cease.  For the quarter ended September 30, 1996 and 1995,  Corbel/NPA had
revenues of $.2 million and $.1 million, respectively, and a loss before
restructuring charges of $.7 million and $.7 million, respectively.   For the
nine months ended September 30, 1996 and 1995, Corbel/NPA had revenues of $.4
million and $.7 million, respectively, and a loss before restructuring charges
of $1.9 million and $1.3 million, respectively.   In the third quarter of 1996,
the Company reserved approximately $2.4 million related to the exit costs of
NPA, including  $1.3 million for customer refunds and $1.1 million related to
asset write-offs,  terminations of  3 employees and other exit costs.  The
expense related to this reserve is reflected in the Company's statement of
operations as a restructuring and impairment charge.  The reserve balance was
approximately $2.0 million at September 30, 1996.


NOTE 8 - SUBSEQUENT EVENTS:

     On October 18, 1996, the Company signed a letter of intent to sell Corbel
& Co., a wholly owned subsidiary ("Corbel"),  subject to satisfactory
completion of due diligence, regulatory approval, board approval from both
companies and negotiation of a definitive stock purchase agreement.  Corbel's
revenues (excluding its subsidiary Corbel/NPA) for the nine months ended
September 30, 1996 were $15.1 million, generating income before taxes of $2.5
million.  The sale is expected to be completed in November 1996.



                                     - 8 -

<PAGE>   9




                            BROADWAY & SEYMOUR, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



OVERVIEW

     During the second half of 1995, the Company implemented a new operating
model called Futures '96.  As part of Futures '96, the Company made significant
changes in senior management, re-engineered its internal project management and
accounting processes and revamped its compensation program. Operations were
reorganized to integrate independent business units into a competency-based
matrix model with team delivery of both products and services which enables
employees at all skill levels to be rapidly deployed as required to meet client
needs and the Company's internal productivity goals.  The Company's strategic
direction was refocused on core operations and internal product development
rather than growth through product acquisitions.  As a part of its focus on
core operations, the Company initiated a plan to sell or discontiue certain
non-strategic business units.

     On October 18, 1996, the Company signed a letter of intent to sell Corbel
& Co., a wholly owned subsidiary ("Corbel"), subject to satisfactory
completion of due diligence, regulatory approval, board approval from both
companies and negotiation of a definitive stock purchase agreement.  Excluding
Corbel/NPA, as discussed below, Corbel's revenues for the nine months ended
September 30, 1996 were $15.1 million, generating income before taxes of $2.5
million.

     In August 1996, the Company developed a plan to close National Pension
Alliance ("NPA"), a joint venture partnership of which Corbel/NPA, Inc.
("Corbel/NPA"), a wholly owned subsidiary of Corbel, is a 75% general partner.
Following a transition period for NPA customers, the operations of NPA will
cease.  For the quarter ended September 30, 1996 and 1995, Corbel/NPA had
revenues of $.2 million and $.1million, respectively, and a net loss before
taxes of $.7 million and $.7 million, respectively.   For the nine months ended
September 30, 1996 and 1995, Corbel/NPA had revenues of $.4 million and $.7
million, respectively, and a loss before restructuring charges of $1.9 million
and $1.3 million, respectively.   In the third quarter of 1996, the Company
reserved approximately $2.4 million related to the exit costs of NPA, including
$1.3 million for customer refunds and $1.1 million related to asset
write-offs,  terminations of 3 employees and other costs.  The expense related
to this reserve is reflected in the Company's statement of operations as a
restructuring and impairment charge.  The reserve balance was approximately
$2.0 million at September 30, 1996.

     On May 15, 1996, the Company sold substantially all the assets, subject
to certain related liabilities, of its asset management business, including the
Company's AMtrust and TrustProcessor software products, to Fidelity Investments
Institutional Services Company, Inc. ("Fidelity"), pursuant to an Asset
Purchase Agreement.  In connection therewith,  the Company and Fidelity entered
into various ancillary agreements which relate to the Company licensing to
Fidelity certain other software, the Company providing to Fidelity certain
software maintenance and transition services and Fidelity contracting with the
Company for certain minimum systems integration work in the twenty-four months
following the closing.  The aggregate consideration to be paid to the Company
in connection with these transactions is approximately $29.0 million, of which
approximately $23.5 million was paid at closing for the net assets and
licensing of certain software and approximately $5.5 million is scheduled to be
paid over the twenty-four months following the closing for certain software
maintenance, training, and transition services and professional services.   The
Company's asset management business contributed approximately $5.8 million and
$12.6 million of revenue for the year to date period ended on the date of sale
and the nine months ended September 30, 1995, respectively.  Losses before
income taxes from the asset management business were $2.8 million and $2.2
million for the year to date period ended on the date of sale and the nine
months ended September 30, 1995, respectively.  For the nine months ended
September 30, 1996, the gain on the sale of the business was $7.8 million.

     On September 1, 1995, the Company transferred a contract for services
provided to International Business Machines Corporation ("IBM") to another
services provider. Prior to transfer, services provided under this contract
contributed approximately $1.9 million of revenue and incurred costs of $1.6
million.


                                     - 9 -
<PAGE>   10



     On June 30, 1995, the Company transferred certain assets, subject to
certain related liabilities, of its community banking business, to a newly
formed subsidiary, Liberty Software, Inc. ("Liberty"), and simultaneously
therewith sold the common stock of Liberty to Jack Henry & Associates, Inc.
("Jack Henry").  In connection with the sale, the Company agreed to provide
certain services and license certain software to Liberty.  For the three month
and nine month periods ended September 30, 1995, Liberty contributed revenue of
$5.5 million and $19.6 million, respectively.  All of the $5.5 million of
revenue contributed in the third quarter of 1995 and $4.0 million of revenue
contributed in the first half of 1995 is software license revenue as part of
the sale to Jack Henry against which the Company incurred no significant
expense.  During the first six months of 1996, the Company recognized
approximately $.5 million of revenue related to the completion of support and
maintenance of software services against which the Company incurred no
significant expense.

     Under the maintenance provisions of a Software License Agreement executed
with Medaphis Corporation ("Medaphis"), on December 30, 1994, Medaphis paid
$6.8 million to the Company.  The Company recognized $3.0 million and $3.8
million received under this agreement as revenue for the three months ended
March 31, 1995 and June 30, 1995, respectively.  The Company incurred no
significant expenses associated with such maintenance services.


QUARTER ENDED SEPTEMBER 30, 1996 COMPARED TO
     QUARTER ENDED SEPTEMBER 30, 1995

     The results of operations for the third quarter of 1996 and 1995 include
revenue and expenses from operations which have been sold as described above.

                    CONSOLIDATED REVENUE AND COST OF REVENUE
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                           QUARTER                QUARTER             
                                           ENDED                  ENDED               
                                           09/30/96               09/30/95
                                           --------               --------
<S>                                         <C>                    <C>           
Revenue:                                                                         
    Services                                $14,034                $18,036       
    Products                                                                     
         Software licenses                    3,806                 13,115       
         Hardware and other                   1,639                  1,098       
         Sale of Services Contract                -                    902       
                                            -------                -------
        Net Revenue                         $19,479                $33,151       
                                            -------                -------
                                                                                 
Cost of revenue:                                                                 
    Services                                $14,768                $17,530
    Products                                                                     
         Software licenses                    1,369                  1,826       
         Hardware and other                   1,504                    664       
                                            -------                -------
            Total cost of revenue           $17,641                $20,020       
                                            -------                -------
</TABLE>  


     Each of the comparative revenue and cost of revenue amounts discussed
below excludes the effect of non-recurring revenue and expenses associated with
Liberty and the IBM services contract that were sold during 1995.

     Services revenue decreased from $17.7 million to $14.0 million, or 21%, in
the third quarter of 1996 compared to the same period last year.  Services
revenue for the third quarter of 1995 includes $5.4 million of revenue
associated with the

                                     - 10 -

<PAGE>   11


Company's AMtrust product subsequently sold to Fidelity on May 15, 1996.
Excluding the effect of AMtrust's operations, services revenue increased $1.7
million, or 14%, in the third quarter of 1996 compared to the same period last
year.  This increase relates principally to $1.9 million of temporary
professional services provided to Fidelity.  Other significant changes include
$2.0 million in increased integration service revenue related to the Company's
Millennium, call center, VisualImpact and BANCStar products.  There was no
significant Millennium or VisualImpact related revenue in the third quarter of
1995.   Due to delays in completing necessary product modifications, revenue
from integration services related to the Company's Crisp product decreased
approximately $.7 million in the third quarter of 1996 as compared to the same
period of 1995.  In addition, lower pension document processing volumes at
Corbel and the sale of the Company's educational training group in the third
quarter of 1996 resulted in decreased revenue of $.5 million and $.4 million,
respectively.

     Product revenue decreased from $8.9 million to $5.4 million, or 39%, in
the third quarter of 1996 compared to the same period last year.  Software
license revenue in connection with sales of the Company's Elite legal product
suite decreased $3.0 million due to lower volume resulting from competitive
pressures in the marketplace.  The Company's product revenue related to its
banking products and third-party software and hardware sales decreased
approximately $1.0 million.  Also contributing to the decrease is a $1.0
million decrease in software license revenue due to the sale of the Company's
AMtrust product to Fidelity.  Offsetting these decreases is a $.4 million
increase in Corbel's software license revenue, a $.3 million increase in
Millennium hardware revenue and a $.5 million increase in hardware revenue
associated with the Company's Elite legal product suite.

     Cost of revenue related to services decreased $2.4 million, or 14%, in the
third quarter of 1996 to $14.8 million compared to $17.2 million in the third
quarter of 1995.  A $4.4 million decrease in salaries, contract labor and
other costs relates to the Company's AMtrust product that was sold to Fidelity
on May 15, 1996.  This decrease was offset, in part, by  $1.3 million of costs
of transition services billed to Fidelity in the third quarter of 1996.
Excluding costs related to AMtrust and the Fidelity transition services, cost
of revenue related to services increased $.9 million.  This increase
principally relates to a $1.1 million increase in cost of services at Elite,
due primarily to increased contract-specific installation and implementation
requirements.

     Cost of revenue related to products increased 16%, or $.4 million, to $2.9
million in the third quarter of 1996 compared to $2.5 million in the same
period last year.  This increase is primarily due to a $1.0 million increase in
costs  related to third party hardware.  This increase was offset by a $.2
million decrease due to the sale of  the AMtrust product to Fidelity on May 15,
1996, a $.2 million decrease in amortization as a result of the write-down of
certain software in December 1995 and a $.2 million decrease in purchased
software costs related to a call center project.

     Research and development expenses decreased slightly when comparing the
third quarter of 1996 with the same period in the prior year.  Research and
development expenses in the third quarter of 1996 and 1995 were net of $.5
million and $.2 million of capitalized software development costs,
respectively.  Including capitalized costs, research and development
expenditures were $1.9 million in the third quarter of 1996 compared to $2.1
million in the third quarter of 1995.  Research and development expenditures
were attributable to development and enhancement of Millennium, CRISP, Elite,
Quantech, AutoDoc, NPA, VisualImpact and BANCStar software.  Research and
development costs capitalized in the third quarter of 1996 related to
development and enhancement of Millennium, Quantech and Elite software.

     Sales and marketing expenses decreased $.9 million to $2.5 million in the
third quarter of 1996 from $3.4 million in 1995.  Of this decrease, $.7
million is due to the sale of the asset management business to Fidelity in May
1996 and the remainder of the decrease is due principally to lower payroll and
commissions that resulted from lower sales of the Company's Elite legal product
suite.

     General and administrative expenses decreased to $2.4 million in the third
quarter of 1996 from $3.1 million in the same period last year.  This decrease
is principally due to a $.3 million decline in professional fees.







                                     - 11 -

<PAGE>   12





NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO
     NINE MONTHS ENDED SEPTEMBER 30, 1995


     The results of operations for the nine months ended September 30, 1996 and
1995 include revenue and expenses from operations that have been sold as
described above.

                    CONSOLIDATED REVENUE AND COST OF REVENUE
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                           NINE MONTHS           NINE MONTHS         
                                           ENDED                 ENDED               
                                           09/30/96              09/30/95       
                                           -----------           -----------
<S>                                         <C>                    <C>           
Revenue:                                                                         
    Services                                $46,434                $60,860       
    Products                                                                     
         Software licenses                   18,072                 29,730       
         Hardware and other                   3,330                  6,861       
         Sale of Services Contract                -                    902       
                                            -------                -------
        Net Revenue                         $67,836                $98,353       
                                            -------                -------
                                                                                 
Cost of revenue:                                                                 
    Services                                $47,002                $53,016
    Products                                                                    
         Software licenses                    4,610                  5,912       
         Hardware and other                   2,996                  5,044       
                                            -------                -------
            Total cost of revenue           $54,608                $63,972
                                            -------                -------
</TABLE>          



     Each of the comparative revenue and cost of revenue amounts discussed
below excludes the effect of non-recurring revenue and expenses associated with
Liberty and the IBM services contract which were sold during 1995.

     Services revenue decreased from $52.9 million to $45.9 million, or 13%, in
the nine months ended September 30, 1996 compared to the same period last year.
Services revenue for the 1995 nine months period includes $6.8 million of
non-recurring software maintenance revenue related to a 1994 contract with
Medaphis Corporation.  The Company incurred no significant expenses associated
with such maintenance services.  Excluding the effect of AMtrust's operations
and the Medaphis contract, services revenue increased $5.4 million, or 13%, in
the nine months ended September 30, 1996 compared to the same period last year.
Services revenue related to certain of the Company's products, including
VisualImpact, BANCStar, Millennium and call center, contributed approximately
$5.3 million of the increase.  Approximately $1.6 million of the increase is
due to revenue from temporary services provided to Fidelity as part of the sale
on May 15, 1996.  Approximately $1.2 million of the increase is related to the
acquisition of The MiniComputer Company of Maryland, Inc. ("TMC") in June 1995.
Also contributing to the increase in service revenue is $1.3 million of
incremental software maintenance revenue from the Company's Elite legal product
suite, related to an increase in client installations, and $.8 million of the
increase is due to services revenue from transitional services related to the
Fidelity transaction.  Corbel's services revenue declined $2.1 million due to
increased revenue in the first nine months of 1995 related to a first quarter
1995 legal deadline for restatement of certain pension plan documents.  Due to
necessary product modifications, revenue from systems integration services
related to the Company's Crisp product decreased approximately 


                                     - 12 -

<PAGE>   13


$1.4 million for the nine months ended 1996 as compared to the same period of
1995.  The educational training group contributed approximately  $.9 million of
the decrease in services revenue.  The educational group was sold during the
third quarter of 1996.

     Product revenue decreased $1.6 million, or 7%, during the nine months
ended September 30, 1996 compared to the same period last year.  During the
first quarter of 1996, the Company recorded software license revenue of $4.0
million in connection with a single contract against which the Company recorded
substantially no associated expense.  During the  first nine months of 1996,
the Company recorded $4.0 million in product revenue from a software license
agreement with Fidelity for Corbel's Quantech pension administration software,
against which the Company recorded substantially no expense.  The Company had a
$5.4 million decrease in product revenue in connection with decreased
installations of the Elite legal product suite.  Excluding the $4.0 million
software license contract, the Company's product revenue related to its banking
products and third-party software and hardware sales, decreased approximately
$4.8 million, offset by $1.5 million in product revenue related to the
Company's Millennium product.  Excluding the $4.0 million in product revenue
from the Fidelity contract for Quantech, Corbel's product revenue declined $.5
million due to a decline in new product sales and conversions.

     Cost of  revenue related to services decreased $.7 million to $46.9
million for the nine months ended September 30, 1996, compared to $47.6 million
for the same period in 1995.  A decrease of  $4.1 million in cost of services
revenue was due to the sale of  the AMtrust product to Fidelity in May 1996 and
a $.8 million decrease in costs of services at Corbel, related principally to a
first quarter 1995 legal deadline for restatement of certain pension plan
documents, which increased revenue and expenses in that period.  These
decreases were offset, in part, by $1.2 million of incremental cost of services
related to TMC, acquired in June 1995.   Also, a $3.2 million increase in
contract labor and payroll costs is attributable to  the Company's Elite legal
product suite.  This increase was due to more contract-specific installation
and implementation requirements as well as incremental costs associated with
increased staffing levels.

     Overall, cost of revenue related to products remained relatively flat,
decreasing $.1 million to $7.8 million, or 37% of product revenue, in the nine
months ended  September 30, 1996 compared to $7.9 million, or  33% of product
revenue for the same period last year.  Software license cost of revenue
decreased  $.8 million, offset by a $.7 million increase in hardware and other
cost of revenue in thenine months ended September 30, 1996 compared to 1995.

     Software license costs increased $.5 million as a result of third party
software purchased for a Millennium project.  This increase in software
license costs was offset by a $.5 million decrease in amortization of developed
software, principally due to the write-down of certain software in December
1995, and a $.7 million decrease in developed software royalties at Elite as a
result of decreased sales.

     The $.7 million increase in hardware and other cost of revenue is due to
increased volume of hardware installations for the Company's Elite legal
product suite, representing a $1 million increase in hardware costs from 1995
to 1996, a $1 million decrease in third party hardware costs related to call
center projects and a $.7 million increase in hardware costs related to
VisualImpact projects.

     Research and development expenses for the 1996 and 1995 nine month periods
were net of $1.1 million and $1.7 million of capitalized software development
costs, respectively.  Including capitalized costs, research and development
expenditures increased to $6 million for the nine months ended September 30,
1996  compared to $5.8 million for the same period in 1995.  Research and
development expenditures were attributable to development  and enhancement of
Millennium, CRISP, Elite, Quantech, AutoDoc, NPA, VisualImpact and BANCStar
software.  Research and development costs capitalized in 1996 related to
development and enhancement of Millennium, Quantech and Elite software.

     Sales and marketing expenses for the nine month period ended September 30,
1996 decreased  $1.1 million from $10.1 million for the nine months ended
September 30, 1995 to $9 million for the same period in the current year.  Of
this decrease, $.2 million is due to the sale of the Company's AMtrust product
in May 1996.  Additionally, sales and marketing expenses at Elite decreased $.8
million, principally due to lower payroll and commission costs caused by lower
product sales.

     General and administrative expenses for the nine month period decreased
2.9% to $7.5 million for 1996 from $7.7 million in 1995, due principally to
decreased professional fees in the period.

     Restructuring and impairment charges for the nine months ended September
30, 1996 include a $2.4 million charge related to the Company's planned
shut-down of NPA described above.  Further, during the fourth quarter of 1995,
the


                                     - 13 -

<PAGE>   14


Company had recorded a restructuring accrual of approximately $1.5 million that
consisted of approximately $1.0 million for consolidation of certain facilities
expected to be subleased and approximately $.5 million for employee severance
costs.  During the first quarter of 1996, the Company revised its estimate of
the remaining costs to complete the restructuring downward by $.2 million.  In
1996, the Company utilized cash of approximately $.9 million to satisfy
obligations related to the 1995 restructuring reserve.  The 1995 restructuring
reserve balance was approximately $.5 million at September 30, 1996.

     Income for the nine months ended September 30, 1996 includes a $7.8
million gain, principally from the sale of the Company's asset management
business to Fidelity.


INCOME TAXES

The Company's effective tax rate for the nine months ended September 30, 1996
and 1995 was 28.8% and 46%, respectively.  The 1996 effective rate reflects the
difference between book and tax basis for the net assets sold as part of the
Fidelity transaction and other differences between book and taxable income.



LIQUIDITY AND CAPITAL RESOURCES

     On September 30, 1996 the Company had cash and cash equivalents of
approximately $2.6 million and working capital of approximately $4.1 million.
The Company currently has invested available cash in various overnight deposits
earning between 5% and 5.5% per annum in interest.

     As part of Futures '96, the Company focused on core operations and
evaluatee opportunities for divesting non-strategic lines of business.   On
October 18, 1996, the Company announced that it had signed a letter of intent
to sell Corbel & Co., a wholly owned subsidiary, subject to satisfactory
completion of due diligence, regulatory approval, board approval from both
companies and negotiation of a definitive stock purchase agreement.  Proceeds
from the sale of this subsidiary or other sources of capital will be necessary
to fund future growth and working capital requirements.

     The Company used a portion of the proceeds from the Fidelity transaction
to pay off its revolving credit facility, which expired in May 1996, and
certain other debt.  The Company has reviewed its liquidity and capital
requirements for the remainder of 1996 and the near term and is in negotiation
for  a bank line of credit.

     The Company believes that the remaining proceeds from the Fidelity
transaction, cash flow from operations and the issuance of stock pursuant to
its employee stock purchase and stock option plans, combined with proceeds from
the sale of Corbel and/or a line of credit will be sufficient to fund its
working capital requirements through 1996 and the near term.

OTHER

     The Company's revenue derives primarily from the performance of consulting
services related to information technology solutions and the sale of related
products under specific engagements with its customers.  In addition, the
Company's historic, acquisition-oriented growth strategy broadened its product
and service offerings and enabled the Company to successfully compete for
large-scale projects.  However, such projects have typically had a longer sales
cycle and inherent volatility in the rate that revenue and related cost was
generated and recognized which has produced significant variations in quarterly
and annual results.

     The Company continually monitors conditions that may affect the carrying
value of its software costs and intangible assets.  Under the principles of
Statement of Financial Accounting Standards No. 86 ("SFAS 86"), "Accounting for
the Costs of Computer Software to be Sold, Leased or Otherwise Marketed" and,
effective January 1, 1996, Statement of Financial Accounting Standards No. 121
("SFAS 121"), "Accounting for the Impairment of Long-



                                     - 14 -
<PAGE>   15


lived Assets and Long-lived Assets to be Disposed Of", the Company records
impairment losses and/or accelerated amortization of software costs and
intangible assets when analysis indicates that an asset is not recoverable.  The
Company operates in markets characterized by innovation and rapid technological
advances and no assurance can be given that future changes in the marketplace
would not impair the value of the Company's software costs and other intangible
assets.


                                     - 15 -
<PAGE>   16





                                   SIGNATURE

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

                                BROADWAY & SEYMOUR, INC.




Date:  December 12, 1996   By:  /s/ David A. Finley
       -----------------        ---------------------------------------------
                                David A. Finley, Executive Vice President and
                                Chief Financial Officer






                                     - 16 -