8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) May 7, 2015

Stewardship Financial Corporation

(Exact Name of Registrant as Specified in its Charter)

New Jersey	1-33377	22-3351447
(State or Other Jurisdiction of	(Commission	(IRS Employer
Incorporation)	File Number)	Identification No.)
630 Godwin Avenue, Midland Park,  NJ		07432
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (201) 444-7100

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On May 7, 2015, Stewardship Financial Corporation (the "Corporation") issued a press release, furnished as Exhibit 99.1 and incorporated in this Item 2.02 by reference, announcing the Corporation’s financial results for the quarter ended March 31, 2015.

The information contained in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished, and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into any registration statement filed by the Corporation under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Report is not intended to, and does not, constitute a determination or admission by the Corporation that the information in this Report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Corporation.

Item 9.01. Financial Statements and Exhibits

(d) The following exhibit is furnished pursuant to Item 2.02 and shall not be deemed to be “filed”:

Exhibit No.	Description
Exhibit 99.1	Press Release dated May 7, 2015

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	May 8, 2015	Stewardship Financial Corporation
		/s/ Claire M. Chadwick
		Claire M. Chadwick
		Executive Vice President and
		Chief Financial Officer

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EX-99.1

EXHIBIT 99.1

For Immediate Release
Contact:	Claire M. Chadwick
	EVP and Chief Financial Officer
	630 Godwin Avenue
	Midland Park, NJ 07432
	201- 444-7100

PRESS RELEASE

Stewardship Financial Corporation Announces Improved Earnings

For First Quarter of 2015

Midland Park, NJ – May 7, 2015 – Stewardship Financial Corporation (NASDAQ:SSFN), parent of Atlantic Stewardship Bank, announced net income for the three months ended March 31, 2015 of $917,000 as compared to net income of $506,000 for the three months ended March 31, 2014. After dividends on preferred stock, net income available to common shareholders was $746,000, or $0.12 per common share, for the current 2015 period compared to $335,000, or $0.06 per common share, for the equivalent period of 2014.

Paul Van Ostenbridge, Stewardship Financial Corporation’s President and Chief Executive Officer, commented, “We are very pleased to report significant year-over-year improvement in the Corporation’s earnings. In addition, we are pleased to show strong loan growth of $12.8 million for the three months ended March 31, 2015, which equates to an 11% annual rate of growth. The Corporation continues to demonstrate the ability to produce increasing results.”

Operating Results

Net interest income was $5.4 million for the first quarter of 2015 compared to $5.3 million a year earlier. Interest income from loans increased $286,000 when compared to the three months ended March 31, 2014 due to the $53.1 million of growth in the average loan portfolio. The Corporation reported a net

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Press Release - Midland Park NJ
Stewardship Financial Corporation continued	May 7, 2015

interest margin of 3.41% for the three months ended March 31, 2015, showing slight contraction when compared to 3.44% for the comparable period in 2014. “Like all financial institutions, the Corporation’s net interest margin is reflective of lower yields on assets due to the low interest rate environment in which we continue to operate,” said Van Ostenbridge.

The Corporation reported noninterest income of $918,000 for the three months ended March 31, 2015 compared to $399,000 for the equivalent prior year period. The current year reflects a $58,000 increase in fees and service charges as well as gains of $152,000 from the sale of available for sale securities and $53,000 from the sale of other real estate owned. The prior year period included a loss of $241,000 from the sale of nonperforming loans.

Total noninterest expenses were $5.0 million for the three months ended March 31, 2015 – comparable to $5.1 million incurred in the prior year period. The Corporation remains committed to controlling expenses even with significant costs associated with regulatory compliance and expense incurred that supports the offering of today’s required electronic services to customers.

Asset Quality

Results for the three months ended March 31, 2015 were positively impacted by the Corporation recording a negative provision for loan losses of $100,000 as compared to no provision for loan losses for the three months ended March 31, 2014. For the three months ended March 31, 2015, the Corporation recorded a $98,000 net recovery of previously charged off loan balances. In addition, nonperforming loans continue to decline and were $2.8 million, or 0.57% of total loans at March 31, 2015 compared to $3.6 million, or 0.76%, at December 31, 2014 and $5.1 million, or 1.20%, a year earlier. Total nonperforming assets of $3.1 million, which includes other real estate owned, also showed continued improvement and represented just 0.45% of total assets at March 31, 2015 compared to 0.71% and 1.02% at December 31, 2014 and March 31, 2014, respectively.

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Press Release - Midland Park NJ
Stewardship Financial Corporation continued	May 7, 2015

Balance Sheet / Financial Condition

Total assets at March 31, 2015 were $685.8 million, which reflected a slight decrease from assets of $693.6 million at December 31, 2014. A $12.8 million increase in gross loans during the first three months of 2015 was the result of new loan originations, partially offset by normal principal amortization. Van Ostenbridge noted, “We continue to make progress on our strategy to shift the balance sheet from investment securities into higher-yielding loans.” During the three months ended March 31, 2015, the Corporation identified and sold approximately $27.8 million of available for sale securities with higher price volatility thus providing a portion of the funding for the loan growth while still continuing to manage overall asset growth.

Total deposits were $566.3 million at March 31, 2015, reflecting $9.8 million of growth when compared to deposits of $556.5 million at December 31, 2014. At March 31, 2015 noninterest bearing deposits now represent one-fourth of total deposits – a very strong percentage which benefits the Corporation as these core deposits represent a consistent and lower cost source of funding.

Other borrowings decreased $16.7 million to $50.0 million at March 31, 2015. The decrease in other borrowings was partially the result of above discussed increase in deposits. In general, other borrowings enable the Corporation to deal with temporary deposit outflows and can assist in managing against rising interest rates through the extension of liabilities.

At March 31, 2015, the Corporation’s leverage, common equity tier 1 and total risk based capital ratios were 9.83%, 8.93% and 14.46% percent, respectively. These ratios, calculated under the new Basel III guidelines, are all above the respective 6.5%, 5% and 10% levels required to be considered a “well capitalized” institution under regulatory guidelines.

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Press Release - Midland Park NJ
Stewardship Financial Corporation continued	May 7, 2015

About Stewardship Financial Corporation

Stewardship Financial Corporation’s subsidiary, the Atlantic Stewardship Bank, has 12 banking offices in Midland Park, Hawthorne (2), Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2),Westwood and Wyckoff, New Jersey. The bank is known for tithing 10% of its pre-tax profits to Christian and local charities. To date, the Bank’s tithe donations total $8.1 million.

We invite you to visit our website at www.asbnow.com for additional information.

The information disclosed in this document contains certain “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” and “potential.” Examples of forward looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Corporation that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include: changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects the Corporation’s interest rate spread or other income anticipated from operations and investments.

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Stewardship Financial Corporation

Selected Consolidated Financial Information

(dollars in thousands, except per share amounts)

(unaudited)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2015			2014			2014			2014			2014
Selected Financial Condition Data:
Cash and cash equivalents	$	21,035		$	10,086		$	10,850		$	14,630		$	27,176
Securities available for sale		94,553			124,918			138,255			144,459			171,692
Securities held to maturity		55,811			55,097			54,234			54,225			24,685
FHLB Stock		3,026			3,777			2,882			2,429			2,133
Loans receivable:
Loans receivable, gross		490,087			477,320			443,006			433,198			423,471
Allowance for loan losses		(9,600	)		(9,602	)		(10,094	)		(9,825	)		(9,792	)
Other, net		(7	)		(19	)		(17	)		40			105
Loans receivable, net		480,480			467,699			432,895			423,413			413,784
Loans held for sale		798			—			364			259			186
Other assets		30,114			31,974			33,072			32,107			32,947
Total assets	$	685,817		$	693,551		$	672,552		$	671,522		$	672,603
Noninterest-bearing deposits	$	141,406		$	136,721		$	140,345		$	143,711		$	137,687
Interest-bearing deposits		424,916			419,755			416,666			422,669			437,729
Total deposits		566,322			556,476			557,011			566,380			575,416
Other borrowings		50,000			66,700			46,800			31,000			25,000
Securities sold under agreements to repurchase		—			—			100			7,601			7,601
Subordinated debentures		7,217			7,217			7,217			7,217			7,217
Other liabilities		2,166			4,189			4,166			2,329			2,209
Total liabilities		625,705			634,582			615,294			614,527			617,443
Shareholders' equity		60,112			58,969			57,258			56,995			55,160
Total liabilities and shareholders' equity	$	685,817		$	693,551		$	672,552		$	671,522		$	672,603
Book value per common share	$	6.98		$	6.98		$	6.98		$	6.98		$	6.98
Gross loans to deposits		86.54%			85.78%			79.53%			76.49%			73.59%
Equity to assets		8.77%			8.50%			8.51%			8.49%			8.20%
Asset Quality Data:
Nonaccrual loans	$	2,798		$	3,628		$	4,434		$	4,875		$	5,073
Loans past due 90 days or more and accruing		—			—			—			—			—
Total nonperforming loans		2,798			3,628			4,434			4,875			5,073
Other real estate owned		320			1,308			2,090			1,225			1,789
Total nonperforming assets	$	3,118		$	4,936		$	6,524		$	6,100		$	6,862
Nonperforming loans to total loans		0.57%			0.76%			1.00%			1.13%			1.20%
Nonperforming assets to total assets		0.45%			0.71%			0.97%			0.91%			1.02%
Allowance for loan losses to nonperforming loans		343.10%			264.66%			227.65%			201.54%			193.02%
Allowance for loan losses to total gross loans		1.96%			2.01%			2.28%			2.27%			2.31%

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Stewardship Financial Corporation

Selected Consolidated Financial Information

(dollars in thousands, except per share amounts)

(unaudited)

	For the three months ended
	March 31,
	2015			2014
Selected Operating Data:
Interest income	$	6,194		$	6,145
Interest expense		793			839
Net interest and dividend income		5,401			5,306
Provision for loan losses		(100	)		—
Net interest and dividend income
after provision for loan losses		5,501			5,306
Noninterest income:
Fees and service charges		479			421
Bank owned life insurance		96			96
Gain on calls and sales of securities		152			—
Gain on sales of mortgage loans		10			12
Loss on sales of loans		—			(241	)
Gain on sales of other real estate owned		53			—
Other		128			111
Total noninterest income		918			399
Noninterest expenses:
Salaries and employee benefits		2,708			2,678
Occupancy, net		467			555
Equipment		156			188
Data processing		453			387
FDIC insurance premium		113			211
Other		1,152			1,075
Total noninterest expenses		5,049			5,094
Income before income tax expense		1,370			611
Income tax expense		453			105
Net income		917			506
Dividends on preferred stock		171			171
Net income available to common shareholders	$	746		$	335
Weighted avg. no. of diluted common shares		6,045,683			5,956,887
Diluted earnings per common share	$	0.12		$	0.06
Return on average common equity		6.77%			3.41%
Return on average assets		0.54%			0.31%
Yield on average interest-earning assets		3.90%			3.97%
Cost of average interest-bearing liabilities		0.67%			0.71%
Net interest rate spread		3.23%			3.26%

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Stewardship Financial Corporation

Selected Consolidated Financial Information

(dollars in thousands, except per share amounts)

(unaudited)

	For the three months ended
	March 31,			December 31,			September 30,		June 30,		March 31,
	2015			2014			2014		2014		2014
Selected Operating Data:
Interest income	$	6,194		$	6,534		$	6,069	$	6,186	$	6,145
Interest expense		793			767			791		810		839
Net interest and dividend income		5,401			5,767			5,278		5,376		5,306
Provision for loan losses		(100	)		(300	)		250		—		—
Net interest and dividend income
after provision for loan losses		5,501			6,067			5,028		5,376		5,306
Noninterest income:
Fees and service charges		479			568			510		504		421
Bank owned life insurance		96			103			100		106		96
Gain on calls and sales of securities		152			165			—		—		—
Gain on sales of mortgage loans		10			26			32		2		12
Loss on sales of loans		—			—			—		—		(241	)
Gain on sales of other real estate owned		53			9			—		54		—
Other		128			119			122		141		111
Total noninterest income		918			990			764		807		399
Noninterest expenses:
Salaries and employee benefits		2,708			2,738			2,624		2,557		2,678
Occupancy, net		467			420			439		520		555
Equipment		156			157			167		175		188
Data processing		453			447			433		435		387
FDIC insurance premium		113			103			133		133		211
Other		1,152			1,179			1,193		1,286		1,075
Total noninterest expenses		5,049			5,044			4,989		5,106		5,094
Income before income tax expense		1,370			2,013			803		1,077		611
Income tax expense		453			712			251		351		105
Net income		917			1,301			552		726		506
Dividends on preferred stock		171			171			170		171		171
Net income available to common shareholders	$	746		$	1,130		$	382	$	555	$	335
Weighted avg. no. of diluted common shares		6,045,683			6,030,561			6,026,848		5,999,897		5,956,887
Diluted earnings per common share	$	0.12		$	0.19		$	0.06	$	0.09	$	0.06
Return on average common equity		6.77%			10.41%			3.58%		5.41%		3.41%
Return on average assets		0.54%			0.75%			0.33%		0.44%		0.31%
Yield on average interest-earning assets		3.90%			4.04%			3.85%		4.03%		3.97%
Cost of average interest-bearing liabilities		0.67%			0.64%			0.68%		0.70%		0.71%
Net interest rate spread		3.23%			3.40%			3.17%		3.33%		3.26%
Net interest margin		3.41%			3.57%			3.36%		3.51%		3.44%

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