Custer Federal was founded by Wm. C. Schaper, a Broken Bow lawyer, to provide people in the surrounding area affordable home loans and a safe place for savings. Custer Federal opened for business March 25, 1925, as the Broken Bow Building and Loan Association. Business was conducted from a desk in the back of the A. F. Mackey grocery store north of the railroad tracks on North 10th Avenue. In 1927, Custer Federal moved to the front part of the present Schaper and White Law Office on South 10th Avenue. A federal mutual charter was granted in 1934 and the operation became known as Custer Federal Savings and Loan Association of Broken Bow.
In 1965, Custer Federal remodeled what was then the Jack & Jill grocery store, and conducted business in what is now the south half of its present building. In 1980, the north half of the building was added. In October of 1990, Custer Federal was converted to a stock federal savings and loan association. Custer Federal is owned by area business people and looks forward to continuing to serve the financial needs of the fine people in central Nebraska.
In June 2013, Custer Federal transitioned from a Savings & Loan to a State institution. Our name was changed to Custer Federal State Bank but we are still the same great faces.