While federally chartered thrifts have fled the Office of Thrift Supervision in droves to avoid overregulation, First Essex Bancorp has bucked the trend by joining up.

Nine months ago, the $705 million-asset thrift, based in Lawrence, Mass., traded in its state charter for a federal one.

The reason is unusual, too: It wanted to convert its troubled New Hampshire subsidiary, Fortune Guarantee Bank of Windham, into a branch.

Federally chartered thrifts are allowed to branch across state lines without restrictions, thanks to the Home Owners' Loan Act and a May 1992 ruling by the thrift agency. But most state-chartered thrifts are prohibited from doing so.

Several analysts, however, say it's still rare for a state-chartered thrift to take a federal charter.

"I'm not familiar with others changing their charter for that specific reason," said Gerard Cassidy, an analyst at Tucker Anthony's Hancock Institutional Equity Services. "I doubt there are a lot of them."

William Fullwider, spokesman for the Office of Thrift Supervision, said several institutions have converted to take advantage of branching opportunities, but he didn't know exactly how many.

"A number of federally chartered thrifts with locations in multiple states have been looking at

In fact, in recent years, thrifts have left the agency complaining its examination fees are too high and examiners unrealistic in their approach to regulation.

But so far, First Essex officials say, their move has been a success.

"Our situation just happened to be perfect, and that's why we elected to do it," said Leonard A. Wilson, president and CEO of First Essex, noting that Lawrence is on the New Hampshire border. "It clearly has been a boon to clients, and the efficiency has exceeded our estimates. It's much simpler running one bank across two states than running two banks."

First Essex recently announced the closure of Fortune's branch in Portsmouth, and the bank plans to open a new branch in another location, said senior vice president William F. Burke.

In 1989, First Essex, with $600 million of assets at the time, bought Fortune, a $50 million-asset, state-chartered thrift, with a second branch in Portsmouth.

But since they were in different states, "we needed to keep two separate franchises" with separate reculatory exams, said Mr. Wilson.

"It made less efficient our ability to serve the market," he said, noting that customers in one state couldn't bank at the branches in the other state, except through automated teller machines.

First Essex began looking at the charter switch in the summer of 1993 but delayed because of speculation that interstate branching would pass Congress that year.

However, "as we began to grow into autumn and winter, it was apparent that it wasn't going to happen for a year or two," Mr. Wilson said. And since it already had a bank across the border, First Essex couldn't afford to wait, he said.

Mr. Wilson said First Essex plans to continue expansion in Massachusetts and New Hampshire.

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