Recipe from Ree Drummond, Food Network. I watched her prepare this dish to take to a Church potluck and was impressed that it did not include canned soup and that it also used fresh green beans vs. canned.
Cut the green beans in half if you like the pieces to be a little smaller. Blanch the green beans; drop them into lightly salted boiling water and allow the green beans to cook for 3-4 minutes. Remove them from the boiling water with a slotted spoon and immediately plunge into a bowl of ice cold water to stop the cooking process. Drain the beans once they are cool and set aside.
Add the bacon pieces to a skillet over medium heat. Cook the bacon for 2 minutes, and then add the peppers, garlic and onions, and continue cooking until the bacon is done (but not crisp) and the onions are golden brown, 3-5 minutes. Remove from heat and set aside.
In a separate saucepan, melt the butter over medium heat. Sprinkle the flour into the pan and whisk immediately to evenly mix it into the butter. Cook for a minute or two, and then pour in the milk and half and half. continue cooking, whisking constantly, while the sauce thickens, about 2 minutes. Add 1 1/2 teaspoons salt, some black pepper and the cayenne, and then add the grated cheese. Stir while the cheese melts. Turn off the heat.
Add the bacon/onion mixture and stir to combine. Add the green beans and stir gently to combine. Pour into a baking dish and top with the panko. Bake until the sauce is bubbly and the panko is golden, about 30 minutes.