Customers Bancorp in Wyomissing, Pa., has agreed to buy the disbursements business of Higher One Holdings in New Haven, Conn.

The $7.6 billion-asset Customers said in a press release that it will pay $42 million in cash for the business. Higher One said in a separate press release that it will also receive a portion of the operation's revenue from 2017 to 2019 if the business tops $75 million in revenue during any fiscal year. The deal is expected to close in the second quarter.

The disbursements business includes a service that streamlines the financial aid refund disbursement process for more than 800 college and university campuses. The sale also includes Higher One's OneAccount, an FDIC-insured checking account; Customers has been a provider of that account since 2013. The deal does not include Higher One's eRefund and payments businesses.

Customers said it expects the business to add $65 million to $75 million in annual income, mostly from interchange fees. The company also said it expects to add about $250 million of core demand deposits from students who are using Higher One disbursement-related accounts at other banks. Roughly 2 million students have deposit accounts with Higher One's partner; more than 500,000 student accounts are opened each year.

The broader plan is to link the acquired business to Customers' BankMobile platform.

The acquisition "is a wonderful strategic transaction for Customers and will greatly accelerate the development and profitability of our BankMobile product offering," Jay Sidhu, Customers' chairman and chief executive, said in his company's release. "This transaction, combined with our plans to combine BankMobile with the disbursements business and charge students no or low fees to use the student deposit product, is uniquely structured to address consumer and banking compliance issues that have challenged this business for the past half-decade."

Customer said it plans to hire about 225 Higher One employees.

Customers noted that it will not assume any regulatory compliance related liabilities for any possible violations of laws or regulations by Higher One identified prior to the closing date. The company also said it should have ample time to make sure its compliance and risk management functions and processes are strong and systems are fully compliant with new Department of Education rules.

Wiggin and Dana provided legal counsel to Higher One, while Cleary Gottlieb Steen & Hamilton advised the company’s board. Stradley Ronon served as legal counsel to Customers.