**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)
            October
                24, 2006








Stewardship
                Financial Corporation(Exact
                Name of Registrant as Specified in its Charter)





New
                Jersey
            
            0-21855
            
            22-3351447(State
                or Other Jurisdiction of
            
            (Commission
            
            (IRS
                EmployerIncorporation)
            
            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
      1.01 Entry into a Material Definitive Agreement**





On
      October 27, 2006, Stewardship Financial Corporation issued a press release
      announcing that its wholly owned subsidiary, Atlantic Stewardship Bank (the
      “Bank”) has entered into an agreement with Elan Financial Services (“Elan”), a
      national credit card issuer. Under this agreement, Elan has agreed to purchase
      the Bank’s existing credit card portfolio, and subsequently will issue credit
      cards for the Bank under the name of Atlantic Stewardship Bank. It is
      anticipated that the settlement of the sale will occur in late October 2006
      or
      early November 2006.





As
      of
      September 30, 2006, the Bank held approximately $3.5 million in credit card
      receivables. Although the estimate is preliminary in nature and may be subject
      to adjustment following the closing of the transaction, the Corporation
      anticipates that it will recognize a gain for the fourth quarter of 2006, net
      of
      income taxes, of approximately $400,000 to $500,000 as a result of the sale
      to
      Elan. In addition, the Bank will continue to earn certain fees from ongoing
      portfolio activity. A copy of the press release announcing the formation of
      a
      new relationship with Elan is attached hereto as Exhibit 99.1.





**Item
      2.01. Completion of Acquisition or Disposition of Assets**





On
      October 24, 2006, Stewardship Financial Corporation sold $17.3 million of
      available for sale securities that were yielding less than 5 percent, resulting
      in an after-tax charge of approximately $380,000.  The
      proceeds were used to purchase higher yielding securities and to fund loan
      growth. The Corporation anticipates that the transaction will reduce exposure
      to
      future interest rate risk and enhance long-term financial performance. A copy
      of
      the press release announcing the disposition of such assets is attached thereto
      as Exhibit 99.1.




**Item
      2.02. Results of Operations and Financial Condition**





On
      October 27, 2006, Stewardship Financial Corporation issued a press release
      announcing its unaudited results for the quarter ended September 30, 2006.
      A
      copy of the press release is attached hereto as Exhibit 99.1.







**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.
                
                DescriptionExhibit
                    99.1
                
                Press
                    Release dated October 27,
                    2006








**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:
              October
                  30, 2006
              
              Stewardship
                  Financial Corporation/s/
                  Julie E. HollandJulie E. HollandVice President and Treasurer