The deal, slated to close in the second half of this year, would provide Capital with the $548 million-asset Integrated's Windsor Advantage, a Small Business Administration and U.S. Department of Agriculture loan origination and servicing business. It has serviced more than $2 billion of loans.

Integrated's "expertise originating and servicing USDA and SBA loans fits well with our strategic objectives and will allow us to serve a market with substantial need and growth potential," Ed Barry, CEO of the $2.2 billion-asset Capital, said in a release announcing the acquisition on Thursday.

The seller is also the parent of West Town Bank & Trust, an Illinois state-chartered bank that operates in Greater Chicago.

Integrated has been on the hunt for a buyer to gain scale and resources in order to further build out its national lending lines. It had inked a deal to sell to MVB Financial in Fairmont, West Virginia, but the companies called off that transaction last year in the aftermath of regional bank failures and heavy pressure on financial stocks.

MVB had agreed to buy Integrated for $98 million in stock to accelerate the growth of its government-guaranteed lending business. But its shares slumped along with much of the sector last spring after the failures of Silicon Valley Bank and Signature Bank in March and the collapse of First Republic Bank in May. 

The failures compounded challenges caused by inflation and spiking interest rates. When the deal was called off last May, MVB's shares were down more than 30% from early March, prior to the initial failures. The slump would have slashed the $98 million price tag roughly in half had it closed in the first half of last year as planned, given MVB was using its stock as currency to buy Integrated.

In an interview at the time, MVB CEO Larry Mazza said the seller did not find the lower price palatable, and MVB also did not like the idea of effectively using its stock at a depressed price due to industry factors, not its own performance.

"The economics just didn't work," Mazza said.

It was among several deals called off last year.

Since then, however, bank stocks have recovered much of the ground they lost following the failures, and analysts anticipate more dealmaking ahead.

Piper Sandler analysts said in a report Thursday that the failure fallout is largely behind the industry, though high interest rates remain a big "hindrance" to dealmaking. This is because they make it difficult to understand sellers' funding costs as well as credit quality, given that high rates drive up deposit expenses and create greater risk of floating-rate loan defaults. But, citing Federal Reserve commentary following policymakers' March meeting, the Piper analysts said banks now expect rate cuts in the second half of this year, and deal talks are picking up as a result.

Integrated Chairman and CEO Marc McConnell said in the release that, by merging now with Capital, it will gain the heft needed to compete with larger lenders. "With a larger balance sheet and our combined lending and deposit-gathering capabilities, we believe that we can secure and grow our position as a leader in nationwide government guaranteed lending," he said.

Capital said the deal was expected to produce 17% earnings per share accretion in 2025. It expects to earn back tangible book value dilution of 5% inside two years.

As part of the deal, McConnell would join the board of Capital and its bank unit. Riddick Skinner, executive vice president of government-guaranteed lending at Integrated, would lead the same business line at Capital Bank. 

Mike Breckheimer, chief strategy officer at Integrated, would join Capital Bank as head of Windsor Advantage. Melissa Marsal, chief operating officer of Integrated, would also join Capital Bank in a leadership role.