In a Dutch oven, saute onion and peppers in oil until tender. Add garlic; cook 1 minute longer.
Stir in the beans, broth, tomatoes and chopped green chilies. Bring to a boil. Reduce heat; simmer, uncovered, for 25 minutes. Add sherry and cilantro; cook 5 minutes longer.
Remove from the heat; cool slightly. Place half of soup in a blender; cover and process until pureed. Return to the pan and heat through. Top each serving with 2 teaspoons sour cream and 1 teaspoon cheese. Yield: 12 servings (3/4 cup each).