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NEW YORK ( TheStreet) -- First Republic Bank ( FRC), was already one of the best bank growth stories out there, but its recent agreement to acquire Luminous Capital will further improve its earnings and revenue mix, according to Jefferies analyst Casey Haire.

After being acquired by Bank of America ( BAC) as part of that company's purchase of Merrill Lynch in January 2009, First Republic was sold in July 2010 for $1.86 billion to an investor group that included Colony Financial ( CLNY) and General Atlantic LLC, and was led by First Republic's original management team. First Republic completed a public offering of common shares in December of 2010.

First Republic is headquartered in San Francisco and had $32.6 billion in total assets as of Sept. 30, with offices in with offices in California, Oregon, Connecticut, Massachusetts and New York, focusing on private banking and jumbo mortgage lending.

The Bank on Nov. 2 announced a deal to acquire Luminous Capital of Los Angeles, which is an investment advisor with $5.5 billion in assets under management. The cost of the deal was not disclosed, but the bank made clear that Luminous team would stay in place, saying that "the six partners of the firm will sign long-term employment contracts as part of the transaction," which is expected to close by the end of the year.

Haire on Tuesday upgraded First Republic to a "Buy" rating from a "Hold" rating, while increasing his price target for the shares to $39 from $35, saying that the "the addition of Luminous is not only accretive to EPS (2% in our view) but also boosts FRC's fee contribution into the mid-teens (vs. 12% in 2011), & thus decreases the company's reliance on spread income."

While many of the largest U.S. banks -- especially Bank of America and Citigroup ( C) -- have touted cross-selling opportunities when making transformative acquisitions, with some very disappointing results, First Republic has a specialized focus on high-net-worth clients, with a reputation for excellent customer service, that Haire expects to lead to a successful integration with Luminous.

Haire said that "on the Luminous side, the firm can now recommend banking products to its clientele without worrying about tarnishing its brand due to poor service quality. For FRC, the addition of Luminous provides the company with a reputable & established team to extract more wealth management business from its borrower base, which is under-penetrated from a wealth management perspective (only 25% of FRC clients participate)."

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