The decision reflects the banks' different strategies.

U.S. Bank believes it can use the branches to expand its operations in Nevada, said Charles Stroup, the U.S. Bank executive vice president for in-store branches.

U.S. Bank also expects to increase its presence in Utah with the assumption of leases on 21 grocery store branches from Zions Bank, a Nevada State affiliate. Stroup acknowledges that other banks have been anxious to turn over their grocery store branches to U.S. Bank in recent years.

Nevada State has operated branches in grocery stores for about 20 years, but the bank decided it was time for a change.

Nevada State decided to rely mostly on freestanding branches now that many customers bank online. In addition, many businesses use equipment that lets them deposit checks electronically, Nevada State Bank Chief Executive Officer and Chairman Dallas Haun said.

Haun said the bank didn't decide to relinquish the branches in an effort to cut costs, although he declined to disclose how much savings would result. Haun added that the decision to drop most of the bank's grocery store branches didn't relate to his plans to expand Nevada State's private banking, the personalized services that it offers to its wealthiest and most profitable customers.

"We find that our ability to serve all the financial needs of our clients is much more conducive to the quiet of our freestanding facilities," Haun said.

U.S. Bank takes a different view. Grocery store branches are cheaper to operate and customers like the convenience, Stroup said.

"We think that the customers in in-store branches are looking for the convenience of banking where they shop," Stroup said. "We do everything in our in-store branches that we do in our traditional branches."

Stroup acknowledged, though, that the average deposit balances tend to be lower at grocery store branches than at traditional branches.

U.S. Bank has worked aggressively to open its own grocery store branches and acquire those of other banks.

U.S. Bank has 554 in-store branches out of 2,542 branches. The Smith's locations will increase U.S. Bank's branch network to 80 locations in Nevada.

U.S. Bank expects to grow in both Nevada and Utah with the new branches, Stroup said.

Nevada State Bank is growing in different ways.

Haun said his bank's recent transaction with the Federal Deposit Insurance Corp. complements the bank's move to eliminate many of its supermarket branches.

Earlier this month, the FDIC allowed Nevada State to purchase $650 million in deposits from failed Silver State Bank of Henderson for a 1.3 percent premium. Nevada State has an option to buy 11 of Silver State's freestanding branches, Haun said. The other two are leased branches.

Nevada State has 40 freestanding branches in Nevada, having spent $43 million building 10 of them over the last five years. Nevada State will keep Smith's branches in Mesquite, Wendover and Elko. It also will continue operating a branch inside a Vons supermarket in Boulder City.

Three out of three customers of Nevada State Bank's location at 850 S. Rancho Drive on Monday said they will stay with Nevada State.

"This is my home," said J.L. Jones said after transacting business at the branch. "They treat me well (while) we have had our ups and downs. I'm going to stay with (Nevada State)."

Said Haun: "We're optimistic, and we anticipate retaining all of our clients."

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.