After six acquisitions in eight years, Computer Services, Inc. is poised for its next phase of growth.

The Paducah-based bank data processing firm, first established in 1965, has expanded into new markets along the way, and 37 percent of its $164 million in annual revenue comes from services other than bank data processing.

“We’ve been gearing up for the next wave of growth,” said Steven Powless, CSI’s chief executive officer.

“Our clientèle has grown from banks only that we did processing for, to a real broad segment in the financial services industry. We want to be a financial solutions provider as opposed to being just a bank data processor.”

When Powless became CEO in 1999, the Paducah company had already laid out focused, aggressive expansion goals.

Just a year after CSI moved into its $10 million headquarters, visible from Interstate 24 near Exit 4, in 1997, the company had $42 million in annual sales and 400 employees, including about 200 in Paducah.

Powless was tasked to lead the company’s quest to become a $100 million-a-year company.

Along with far exceeding the annual sales goal, CSI has grown to 1,000 employees, including about 250 in Paducah, as of this month, Powless said.

The company has its roots in being at the forefront of technological advances that benefit banks.

The past

In the mid-1960s, three Paducah bankers searched for a way to streamline the 50,000 checks and deposit slips their banks processed each day. They decided to pool resources and buy a $321,000 computer that could process 50,000 items in three hours and nearly 3,000 statements in an hour.

John A. Williams, fresh out of the University of Kentucky, was hired as executive director of the new company incorporated in March 1965.

In its initial year, CSI employed six and serviced three customers: Peoples Bank & Trust, Paducah Bank and Citizens Bank.

The present

The company’s more recent growth has come about in traditional CSI fashion with a twist: through technological advancements but through acquisitions utilizing entrepreneurs around the country.

“We’ve basically brought entrepreneurs to our staff,” Powless said. The businesses CSI has acquired were typically started by entrepreneurs who had built to a point and were ready for more capital and infrastructure to take it to the next level, Powell said.

Four of the recent acquisitions have moved CSI into new markets.

• ATTUS Technologies, based in Charlotte, N.C., an industry leader in software and services for regulatory compliance, security and fraud prevention.

Operating as a wholly-owned subsidiary of CSI, ATTUS serves 4,500 clients ranging from financial institutions to non-profit organizations. One such client is LinkedIn Corp., the company behind the largest website for professional networking. Powless said LinkedIn, and companies like it, must check members’ names against lists maintained by various security and regulatory agencies, and the computer services through ATTUS help them do that.

• Summit Financial Solutions, Inc. in Jefferson City, Mo. This moved CSI into the payments processing market since Summit Financial specializes in check imaging for payments processing.

• Myriad Systems Inc., a provider of print and mail, bank marketing and online banking services out of Oklahoma City, Okla.

• HEIT, a Fort Collins, Colo.,-based provider of cloud-based managed compliance, security and IT services.

HEIT is the most recent acquisition, joining the CSI fold in August, and the move into cloud-based services is one toward an area ready to grow, Powless said.

“We think our timing is right on spot with being able to get into this industry,” Powless said. It takes some explaining to describe cloud-based services, and like much of CSI’s high-tech financial work, most locals don’t fully grasp the details involved.

Powless said cloud-based managed services enable clients to access on-demand technology and IT services without having to purchase, build and integrate expensive data centers, networks and servers. Through the cloud, a company such as HEIT can meet the IT demands of clients without having to be in the same place as the client.

Dan Holt, HEIT’s founder, said the company incorporated in 2003 and began serving banks in 2006.

Holt grew the company to employ 100 and service 400 clients, all but one being clients that didn’t overlap with CSI.

“I’d known about CSI for a while,” Holt said by phone last week. “They are one of the five major core service providers in the U.S., and our whole idea was we wanted to partner with a core provider.”

Holt said CSI’s reputation helped him decide to join the company.

“CSI has an outstanding reputation in the industry,” Hold said. “They are known for how they treat their employees, how they treat their clients. We wanted to make sure we joined somebody who has that.”

After the acquisition, Holt became general manager of CSI’s Managed Services Division.

Bringing new markets, and up-and-coming entrepreneurs, into the CSI family has kept the job challenging, said Richard Wynn, senior vice president and chief technology officer.

Wynn is an example of the CSI’s Paducah history as a long-time local employer.

Wynn joined the company 35 years ago running a check sorter, an entry-level position.

He moved up through operations and programming development, and said keeping up with changing technologies in a company that invests in its operations and employees has kept him at CSI for so many years.

Powless said CSI invests between $8 million and $11 million each year in new capital, ranging from main frame servers to work stations to telecommunications technologies.

He said for a technology company, investment each year to keep up with new software and products is paramount, and one reason the company has invested $40 million back into the business over the last five years.

Wynn said the company spends about $3.5 million on main frame servers alone each year.

The future

The increase in financial regulations is only increasing for financial institutions and related companies. That will likely be a source of business and growth for CSI, which will continue to provide services, and look for acquisitions, to better help clients cope with increased regulations.

CSI added two senior level positions to better focus on future acquisitions and marketing, as the company grows into its role as one servicing clients in all 50 states and overseas.

Paul Koziarz was named chief development officer and Kedran Whitten is the new chief marketing officer.

In the last 10 years, CSI recorded a 9.9 percent increase in revenue growth, and Powless said the company hopes to build on its ability to diversify among its customers. As of this year, no single customer represented greater than 2 percent of revenues.

Quick CSI Timeline

1965 — Computer Services, Inc. was incorporated and John A. Williams was hired as executive director. Operations began with six

employees and three Paducah customers: Peoples Bank & Trust Company, Paducah Bank and Citizens Bank.

1970 — CSI had opened its first remote service center, the first in a network of service centers.

1988 — The company hired its first telecommunications employee to address the need for a secure telecommunications network.

That department has become the backbone of CSI’s infrastructure, allowing it to move huge amounts of data between locations.

1997 — Moved into a new corporate headquarters at 3901 Technology Drive; a 75,000-square-foot building.

2011 — Acquires HEIT, a Fort Collins, Colo.,-based provider of cloud-based managed compliance, security and IT services. The

acquisition marked the sixth in eight years.

Acquisition Timeline

1992 — Indiana Information Controls, Inc., a sister bank processing company in

northern Indiana.

1998 — Computer Bank, Inc., which expanded CSI’s presence into Texas, Arkansas

and Louisiana.

2000 — First Commerce Technologies, which moved CSI westward into Kansas,

Colorado, Wyoming, Iowa, New Mexico, Nebraska and to the east in Florida.

2003 — ATTUS Technologies, Inc., based in Charlotte, N.C., an industry leader in

software and services for regulatory compliance, security and fraud prevention.

2005 — Heartland Communications Internet Services, formerly a Paducah-based

telecommunication services provider.

2005 — McCoy Myers & Associates, provider of in-house and service bureau processing

systems.

2007 — Summit Financial Solutions in Jefferson City, Mo., which moved CSI into

the payments processing market.

2009 — Myriad Systems Inc., a provider of print and mail, bank marketing and online

banking services out of Oklahoma City, Okla.

2011 — HEIT, the most recent acquisition joining the CSI fold in August, moved the

company into cloud-based services.

The story of the Burroughs B300

CSI’s penchant for being in the forefront of banking technology is rooted in its first computer purchase in its earliest days in the mid-1960s.

The Burroughs B300, which remains on the ground floor of the company’s Paducah headquarters, allowed local bankers, for the first time, to streamline processing of checks and deposit slips. The Burroughs’ features are a testament to how far computer technology has come.

The original cost of the Burroughs B300 was $321,400, and it could process 50,000 items in three hours along with nearly 3,000 statements in an hour.

Other features:

• It featured no screen or monitor as the operator used lights to determine the status of the system.

• It came with 9,600 bytes of memory and later upgraded to 19,200 bytes. For comparison, the iPhone has up to 32 gigabytes of memory, or 32 billion bytes, and costs a couple hundred dollars.

• No disk drive, all data storage on tapes.

• Operated a 1,565 DPM sorter for capturing check information.

• De-installed from use in 1978.