The six branches of Charter Bank are expected to re-open Monday after the Santa Fe bank was taken over this weekend by the Federal Deposit Insurance Corp.

The Office of Thrift Supervision on Friday evening shut down the bank, which in addition to two Santa Fe offices also has three branches in Albuquerque and one in Rio Rancho.

Charter has been known for its support of affordable housing but has been under scrutiny for apparent problems with its commercial loans.

An announcement said the FDIC, which was appointed as receiver, has entered into a purchase and assumption agreement with Charter Bank of Albuquerque, a newly chartered federal savings bank and a subsidiary of Beal Financial Corp. of Plano, Texas.

The FDIC said borrowers and depositors should not experience any interruption in service or access to funds. Checks drawn on the bank will continue to be honored, loan customers should continue making their payments as usual and deposits will remain insured by the FDIC, the statement said.

The bank's ATM and debit cards will continue to work normally, the FDIC said.

"In addition to assuming all of the deposits of the failed bank, (the Beal corporation) agreed to purchase essentially all of the assets," the FDIC statement said.

The take-over eliminated the previous owners' interest in the family-run institution, over which Glenn Wertheim has served as president and chief executive officer since 2001.

The FDIC agreed to a loss-share transaction on $805 million of Charter Bank's assets. The FDIC estimates that the cost to the fund that insures deposits will be $201.9 million.

As of Sept. 30, Charter Bank had about $1.2 billion in total assets and $851.5 million in total deposits.

Charter Bank is the seventh FDIC-insured institution to fail in the nation this year, and the first in New Mexico. The last FDIC-insured institution closed in the state was Zia New Mexico Bank in Tucumcari, on April 23, 1999.

The closing of the Santa Fe bank might create opportunities for other area financial institutions.

Bryan "Chip" Chippeaux, chairman of Century Bank, said Saturday that the new operators are likely to examine the interest rates paid to depositors and possibly lower them.

He also said it appeared that the bank's capital fell below regulatory standards and that regulators apparently felt there were enough bad loans that the bank would not be able to recover.

Chippeaux cited the bank's work on helping to finance lower-priced home projects and said "hopefully the new bank will take the same interests."

"We are all saddened," he said, "but depositors won't be out."

The Office of Thrift Supervision was reported to have recently ordered the bank to raise new capital to prevent failure or face closure.

Late last year, Charter Bank of Santa Fe received an order to "cease and desist" from certain practices from the Office of Thrift Supervision.

Among other claims, the agency determined that Charter failed to classify assets and establish allowances in accordance with generally accepted accounting principles and failed to properly administer commercial real estate loans.

In a statement to The New Mexican in December, a bank spokesman said, "Charter Bank, like many other banks, has experienced challenges caused by the economic downturn and the effect the economic crisis has had on many of our customers."

In addition, last month's statement said, "Charter is working intently to meet new, more stringent federal government regulatory requirements and to ensure the integrity and viability of our operations."